Financial Reporting and Analysis, 8e Revsine (Test Bank All Chapters,
100% Original Verified, A+ Grade) Answers At The End Of Each
Chapter
chapter 1
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The role of financial accounting information is to facilitate economic transactions and to
foster efficient allocation of resources among businesses and individuals.
⊚ true
⊚ false
2) Financial reports provide information that can reduce investors’ uncertainty about the
company’s opportunities and risks, thereby raising the company’s cost of capital.
⊚ true
⊚ false
3) Comparability across companies allows analysts to identify real economic similarities in
and differences between underlying economic events because those similarities or differences are
not obscured by accounting methods or disclosure practices.
⊚ true
⊚ false
4) Executive compensation contracts seldom contain annual bonus and longer term pay
components tied to financial statement results, but instead usually rely on stock options as a
means to reward managers in a manner that is less subject to manipulation by management.
⊚ true
⊚ false
5) Congress stipulated that the SEC develop rules for companies to disclose information on
use of “conflict minerals.”
⊚ true
⊚ false
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,6) The public and private sector regulatory agencies establish and enforce financial
reporting requirements designed to ensure that companies meet certain minimum levels of
financial disclosure.
⊚ true
⊚ false
7) Although the SEC has the ultimate legal authority to set accounting principles in the U.S.,
it has looked to private-sector organizations (e.g., the FASB) to establish and enforce these
principles.
⊚ true
⊚ false
8) Management has considerable discretion over the particular accounting procedures used
in the financial statements and over the details contained in related note disclosures.
⊚ true
⊚ false
9) Accounting standard-setting in the U.S. is a technical process and thus little affected by
political considerations.
⊚ true
⊚ false
10) Government regulation provides the primary motivation for firms to disclose
sustainability-related information.
⊚ true
⊚ false
11) While an increasing percentage of companies report on sustainability, consistency in
reporting continues to provide challenges for information users.
⊚ true
⊚ false
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,12) The IASB and FASB have worked together to develop a single set of high-quality,
understandable, enforceable and globally accepted international financial reporting standards.
⊚ true
⊚ false
13) Foreign companies registered with the SEC that use IFRS no longer have to reconcile
their financial statements to U.S. GAAP.
⊚ true
⊚ false
14) U.S. GAAP has been criticized as being too "rules-based" thus allowing managers to
invent "loopholes" that conform to the letter of a standard but simultaneously violate its spirit.
⊚ true
⊚ false
15) The goal of the movement toward international convergence of accounting standards is a
single set of accounting standards accepted worldwide and superior to the choices presently
available.
⊚ true
⊚ false
16) Regulators of industries granted monopoly privileges use financial statement data in
setting the rates companies are permitted to charge for the services these industries provide.
⊚ true
⊚ false
17) Owners and managers have an economic incentive to supply the amount and type of
financial information that will enable the company to raise capital at the lowest cost.
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, ⊚ true
⊚ false
18) Financial statement information can help customers monitor a supplier’s manufacturing
processes and thus evaluate the quality of its products.
⊚ true
⊚ false
19) The conceptual framework for financial reporting includes the standards of GAAP.
⊚ true
⊚ false
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
20) A company’s financial statements reflect information about:
A) future projections of sales, expenses, and other future economic events.
B) product information and competitive positions.
C) the general economy of the industry in which the company operates.
D) economic events that affect a company that can be translated into accounting
numbers.
21) All financial statements:
A) provide a picture of the company at a moment in time.
B) describe changes that took place over a period of time.
C) help to evaluate what happened in the past.
D) contain the most up to date information about the company.
22) A firm’s financial statements contain trends that give users insight into the firm’s:
Version 1 4
100% Original Verified, A+ Grade) Answers At The End Of Each
Chapter
chapter 1
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The role of financial accounting information is to facilitate economic transactions and to
foster efficient allocation of resources among businesses and individuals.
⊚ true
⊚ false
2) Financial reports provide information that can reduce investors’ uncertainty about the
company’s opportunities and risks, thereby raising the company’s cost of capital.
⊚ true
⊚ false
3) Comparability across companies allows analysts to identify real economic similarities in
and differences between underlying economic events because those similarities or differences are
not obscured by accounting methods or disclosure practices.
⊚ true
⊚ false
4) Executive compensation contracts seldom contain annual bonus and longer term pay
components tied to financial statement results, but instead usually rely on stock options as a
means to reward managers in a manner that is less subject to manipulation by management.
⊚ true
⊚ false
5) Congress stipulated that the SEC develop rules for companies to disclose information on
use of “conflict minerals.”
⊚ true
⊚ false
Version 1 1
,6) The public and private sector regulatory agencies establish and enforce financial
reporting requirements designed to ensure that companies meet certain minimum levels of
financial disclosure.
⊚ true
⊚ false
7) Although the SEC has the ultimate legal authority to set accounting principles in the U.S.,
it has looked to private-sector organizations (e.g., the FASB) to establish and enforce these
principles.
⊚ true
⊚ false
8) Management has considerable discretion over the particular accounting procedures used
in the financial statements and over the details contained in related note disclosures.
⊚ true
⊚ false
9) Accounting standard-setting in the U.S. is a technical process and thus little affected by
political considerations.
⊚ true
⊚ false
10) Government regulation provides the primary motivation for firms to disclose
sustainability-related information.
⊚ true
⊚ false
11) While an increasing percentage of companies report on sustainability, consistency in
reporting continues to provide challenges for information users.
⊚ true
⊚ false
Version 1 2
,12) The IASB and FASB have worked together to develop a single set of high-quality,
understandable, enforceable and globally accepted international financial reporting standards.
⊚ true
⊚ false
13) Foreign companies registered with the SEC that use IFRS no longer have to reconcile
their financial statements to U.S. GAAP.
⊚ true
⊚ false
14) U.S. GAAP has been criticized as being too "rules-based" thus allowing managers to
invent "loopholes" that conform to the letter of a standard but simultaneously violate its spirit.
⊚ true
⊚ false
15) The goal of the movement toward international convergence of accounting standards is a
single set of accounting standards accepted worldwide and superior to the choices presently
available.
⊚ true
⊚ false
16) Regulators of industries granted monopoly privileges use financial statement data in
setting the rates companies are permitted to charge for the services these industries provide.
⊚ true
⊚ false
17) Owners and managers have an economic incentive to supply the amount and type of
financial information that will enable the company to raise capital at the lowest cost.
Version 1 3
, ⊚ true
⊚ false
18) Financial statement information can help customers monitor a supplier’s manufacturing
processes and thus evaluate the quality of its products.
⊚ true
⊚ false
19) The conceptual framework for financial reporting includes the standards of GAAP.
⊚ true
⊚ false
MULTIPLE CHOICE - Choose the one alternative that best completes the statement or
answers the question.
20) A company’s financial statements reflect information about:
A) future projections of sales, expenses, and other future economic events.
B) product information and competitive positions.
C) the general economy of the industry in which the company operates.
D) economic events that affect a company that can be translated into accounting
numbers.
21) All financial statements:
A) provide a picture of the company at a moment in time.
B) describe changes that took place over a period of time.
C) help to evaluate what happened in the past.
D) contain the most up to date information about the company.
22) A firm’s financial statements contain trends that give users insight into the firm’s:
Version 1 4
