TEST BANK FOR Intermediate Accounting, 11th Edition by David Spiceland ( All Chapters Covered) Latest 2026

TEST BANK FOR
Intermediate Accounting

by David Spiceland, Mark W. Nelson
11th Edition

,Chapter 1 Environment and Theoretical Structure of Financial Accounting

True/False Questions

1. The Primary Function Of Financial Accounting Is To Provide Relevant Financial
Information To Parties External To Business Enterprises.

Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-01
Topic Area: Environment Of Financial Accounting And Reporting
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking


2. Accrual Accounting Attempts To Measure Revenues And Expenses That Occurred
During Accounting Periods So They Equal Net Operating Cash Flow.

Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-02
Topic Area: Cash Versus Accrual Accounting Blooms:
Understand
AACSB: Reflective Thinking
AICPA: FN Measurement


3. The FASB Is Currently The Public-Sector Organization Responsible For Setting
Accounting Standards In The United States.

Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-03
Topic Area: Development Of Accounting And Reporting
Standards Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal


4. The FASB’s Due Process Invites Various Interested Parties To Indicate Their Opinions
About Whether Financial Accounting Standards Should Be Changed.

Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-04
Topic Area: GAAP—Standard-Setting Process
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal


5. Accounting For Stock-Based Compensation Is An Area In Which The FASB Has
Received Little Political Interference.

,Chapter 1 Environment and Theoretical Structure of Financial Accounting

Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-04
Topic Area: GAAP—Standard-Setting Process
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal


6. The Public Reform And Investor Protection Act Of 2002 (Sarbanes-Oxley) Changed The
Entity Responsible For Setting Auditing Standards In The United States.

Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting Blooms:
Remember
AACSB: Reflective Thinking
AICPA: BB Legal


7. A Rules-Based Approach To Standard-Setting Stresses Professional Judgment As
Opposed To Following A List Of Rules.

Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting Blooms:
Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking


8. Under Federal Securities Laws, The SEC Has The Authority To Set Accounting
Standards In The United States.

Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-03
Topic Area: Development Of Accounting And Reporting
Standards Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Legal


9. The Primary Responsibility For Properly Applying GAAP When Communicating With
Investors And Creditors Through Financial Statements Lies With A Firm's Auditors.

Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting

, Chapter 1 Environment and Theoretical Structure of Financial Accounting
Blooms: Remember
AACSB: Reflective
Thinking
AICPA: BB Critical Thinking


10. Auditors Play An Important Role In The Resource Allocation Process By Adding
Credibility To Financial Statements.

Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-05
Topic Area: Encouraging High-Quality Financial Reporting Blooms:
Understand
AACSB: Reflective Thinking
AICPA: BB Critical Thinking


11. The Purpose Of The Conceptual Framework Is To Provide A Structure And
Framework For A Consistent Set Of GAAP.

Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-06
Topic Area: Conceptual Framework—Purpose
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking


12. In The United States The Conceptual Framework Indicates GAAP When A More
Specific Accounting Standard Does Not Apply.

Answer: False
Level Of Learning: 1 Easy
Learning Objective: 01-06
Topic Area: Conceptual Framework—Purpose
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking


13. Materiality Can Be Affected By The Dollar Amount Of An Item, The Nature Of The Item, Or Both.

Answer: True
Level Of Learning: 1 Easy
Learning Objective: 01-07
Topic Area: Concepts—Qualitative Characteristics
Blooms: Remember
AACSB: Reflective Thinking
AICPA: BB Critical Thinking
AICPA: FN Measurement