INTERMEDIATE ACCOUNTING QUESTIONS AND
ANSWERS. REVISION MATERIAL. 2024 UPDATE
WITH RESEARCHED ANSWERS
1. Which party involved in the financial reporting process
provides assurance that the financial statements prepared by
management fairly present the financial position and
performance of the company? External auditors
2) Which of the following types of information would be
categorized as financial information?
A) Asset values governed by accounting standards
B) Footnote disclosures in annual reports
C) Auditor's report
D) all of the above: D
3. What group or organization both protects investors and
oversees the accounting standard-setting process in the United
States? United States Security and Exchange Commission
4) Which of the following statements correctly identifies
accounting standard setters?
A) The AICPA promulgates accounting standards in the U.S.
and the 'FRS issues international accounting standards. B)
The AICPA promulgates accounting standards in the U.S. and
the IASB issues international accounting standards. C) The
FASB promulgates accounting standards in the U.S. and the
'FRS issues international accounting standards.
D) The FASB promulgates accounting standards in the U.S. and
the IASB issues international accounting standards.: D: The
FASB promulgates accounting standards in the U.S. and the
IASB issues international accounting standards.
5. What is the definition of fair value? The amount at which an
asset could be bought or sold in a current transaction between
willing parties.
6.
, INTERMEDIATE ACCOUNTING QUESTIONS AND
ANSWERS. REVISION MATERIAL. 2024 UPDATE
WITH RESEARCHED ANSWERS
indicates whether financial information depicts an
economic event in a way that is complete, neutral, and free from
error.: Faithful Representation
7. Under U.S. GAAP, is an example of a period-
of-time element and appears on the .: sales revenue;
income statement
8. The process of reporting an economic event in the financial
statements is known as .: recognition
9. Shadow's Cleaning Service provides weekly cleaning
services for $41 per week. In January, they collected payments
from 60 customers for 3 months (12 weeks) of service each. For
the month of January, they will recognize of revenue
under the cash basis, and under the accrual basis.:
$29,520; $9,840
10. If a company is facing a bankruptcy from which it is quite
doubtful that the firm may ever recover, which underlying
assumption would not be valid?
A) going concern concept
B) periodicity assumption
C) economic entity concept
D) monetary unit assumption: A) going concern concept
1 1. Which underlying assumption presumes that the owner's
personal residence should not be included as an asset on the
company balance sheet? economic entity concept
12. Which attribute of a fundamental characteristic makes
explicit the assumption of the full disclosure principle?
completeness
1 3. occurs when managers manipulate financial
information and misrepresent the firm's financial position and
performance.: Earnings management
ANSWERS. REVISION MATERIAL. 2024 UPDATE
WITH RESEARCHED ANSWERS
1. Which party involved in the financial reporting process
provides assurance that the financial statements prepared by
management fairly present the financial position and
performance of the company? External auditors
2) Which of the following types of information would be
categorized as financial information?
A) Asset values governed by accounting standards
B) Footnote disclosures in annual reports
C) Auditor's report
D) all of the above: D
3. What group or organization both protects investors and
oversees the accounting standard-setting process in the United
States? United States Security and Exchange Commission
4) Which of the following statements correctly identifies
accounting standard setters?
A) The AICPA promulgates accounting standards in the U.S.
and the 'FRS issues international accounting standards. B)
The AICPA promulgates accounting standards in the U.S. and
the IASB issues international accounting standards. C) The
FASB promulgates accounting standards in the U.S. and the
'FRS issues international accounting standards.
D) The FASB promulgates accounting standards in the U.S. and
the IASB issues international accounting standards.: D: The
FASB promulgates accounting standards in the U.S. and the
IASB issues international accounting standards.
5. What is the definition of fair value? The amount at which an
asset could be bought or sold in a current transaction between
willing parties.
6.
, INTERMEDIATE ACCOUNTING QUESTIONS AND
ANSWERS. REVISION MATERIAL. 2024 UPDATE
WITH RESEARCHED ANSWERS
indicates whether financial information depicts an
economic event in a way that is complete, neutral, and free from
error.: Faithful Representation
7. Under U.S. GAAP, is an example of a period-
of-time element and appears on the .: sales revenue;
income statement
8. The process of reporting an economic event in the financial
statements is known as .: recognition
9. Shadow's Cleaning Service provides weekly cleaning
services for $41 per week. In January, they collected payments
from 60 customers for 3 months (12 weeks) of service each. For
the month of January, they will recognize of revenue
under the cash basis, and under the accrual basis.:
$29,520; $9,840
10. If a company is facing a bankruptcy from which it is quite
doubtful that the firm may ever recover, which underlying
assumption would not be valid?
A) going concern concept
B) periodicity assumption
C) economic entity concept
D) monetary unit assumption: A) going concern concept
1 1. Which underlying assumption presumes that the owner's
personal residence should not be included as an asset on the
company balance sheet? economic entity concept
12. Which attribute of a fundamental characteristic makes
explicit the assumption of the full disclosure principle?
completeness
1 3. occurs when managers manipulate financial
information and misrepresent the firm's financial position and
performance.: Earnings management
