Intermediate Accounting 1 Exam Questions with Verified Answers Latest update 2024 Already Passed
Which of the following organizations has legal authority to prescribe accounting principles and reporting
practices for all corporations issuing publicly traded securities within the U.S. capital markets? - Answers
Securities and Exchange Commission
Which of the following statements regarding Standards contained in the FASB Accounting Standards
Codification (ASC) is true? - Answers They apply to financial reporting by all U.S. companies
Prior to 2009, which of the following types of FASB Pronouncements carried the highest authority within
GAAP by establishing the methods and procedures required on specific? - Answers Statement of
Financial Accounting Standards
A member should be free form conflicts of interest and be objective. A member should be free of bias
and provide auditing and attestation services in an independent manner. - Answers Objective and
Independence
A member is public practice should always consider the Code of Professional Conduct in determining the
nature and scope of services which they have been asked to provide. - Answers Scope and Nature of
Service
Member should perform all of their professional activities with the highest sense of integrity possible.
This maintains and broadens public confidence in the profession. - Answers Integrity
Members should act in a way that demonstrates professionalism and honors public trust. - Answers The
Public Interest
As a member, one should continually strive to improve competence and the quality of services to the
best of their ability. - Answers Due Care
Members should exercise sensitive professional and moral judgments in when carrying of their activities
as a professional. - Answers Responsibilities
Which qualitative characteristic is an ingredient of relevance? - Answers Materiality
What is the ultimate objective of accounting information? - Answers Decision usefulness
A constraint mentioned by GAAP on qualitative characteristics is - Answers benefits greater than costs
Understandability is a characteristic that is - Answers an enhancing quality
The materiality on an item of financial information refers to the likelihood that is omission of
misstatement would affect the decisions of those relying on that information and thus make differing
choices if the information had been presented. This concept most closely relates to the - Answers
financial magnitude of the item
A company records sales on account when providing a service - Answers recognition
, A company recognizes as expense the portion of its prepaid rent that has expired - Answers matching
principle
A company purchased land in 1990 for $500,000 and reports the land at the same amount on its 2016
balance sheet - Answers historical cost principle
A company reports its inventories on the balance sheet at the lower of cost or market - Answers
conservatism
An entity is preparing its five-year strategic plan - Answers going-concern assumption
A company amortizes its patent, an intangible asset, over its useful life - Answers matching principle
All financial statements are prepared without the assumption of inflation - Answers monetary-unit
assumption
The financial statements of the company are prepared separate form the owners - Answers reporting
entity assumption
Revenue is recognized at the time the product is sold, shipped, or delivered - Answers realization
Which one of the following assumptions or principles most logically supports the preparation of a single
set of consolidated financial statements that combines the financial information of several wholly
owned but separately identifiable businesses? - Answers reporting entity
In terms of debits and credits, which types of accounts have the same (debit or credit) normal balances?
- Answers dividends, expenses, assets
Information related to the Berkley Company for the calendar year 2015 follows:
Liabilities, December 31, 2015 $400
Assets, December 31, 2015 700
Dividends Distributed during 2015 90
Liabilities, December 31, 2014 250
Assets, December 31, 2014 350
Assuming NO capital stock was issued during 2015, the net income earned by the Berkley company
during 2015 was - Answers Beg RE 100
+Net income X
-Dividends 90
=End RE 300
Which of the following organizations has legal authority to prescribe accounting principles and reporting
practices for all corporations issuing publicly traded securities within the U.S. capital markets? - Answers
Securities and Exchange Commission
Which of the following statements regarding Standards contained in the FASB Accounting Standards
Codification (ASC) is true? - Answers They apply to financial reporting by all U.S. companies
Prior to 2009, which of the following types of FASB Pronouncements carried the highest authority within
GAAP by establishing the methods and procedures required on specific? - Answers Statement of
Financial Accounting Standards
A member should be free form conflicts of interest and be objective. A member should be free of bias
and provide auditing and attestation services in an independent manner. - Answers Objective and
Independence
A member is public practice should always consider the Code of Professional Conduct in determining the
nature and scope of services which they have been asked to provide. - Answers Scope and Nature of
Service
Member should perform all of their professional activities with the highest sense of integrity possible.
This maintains and broadens public confidence in the profession. - Answers Integrity
Members should act in a way that demonstrates professionalism and honors public trust. - Answers The
Public Interest
As a member, one should continually strive to improve competence and the quality of services to the
best of their ability. - Answers Due Care
Members should exercise sensitive professional and moral judgments in when carrying of their activities
as a professional. - Answers Responsibilities
Which qualitative characteristic is an ingredient of relevance? - Answers Materiality
What is the ultimate objective of accounting information? - Answers Decision usefulness
A constraint mentioned by GAAP on qualitative characteristics is - Answers benefits greater than costs
Understandability is a characteristic that is - Answers an enhancing quality
The materiality on an item of financial information refers to the likelihood that is omission of
misstatement would affect the decisions of those relying on that information and thus make differing
choices if the information had been presented. This concept most closely relates to the - Answers
financial magnitude of the item
A company records sales on account when providing a service - Answers recognition
, A company recognizes as expense the portion of its prepaid rent that has expired - Answers matching
principle
A company purchased land in 1990 for $500,000 and reports the land at the same amount on its 2016
balance sheet - Answers historical cost principle
A company reports its inventories on the balance sheet at the lower of cost or market - Answers
conservatism
An entity is preparing its five-year strategic plan - Answers going-concern assumption
A company amortizes its patent, an intangible asset, over its useful life - Answers matching principle
All financial statements are prepared without the assumption of inflation - Answers monetary-unit
assumption
The financial statements of the company are prepared separate form the owners - Answers reporting
entity assumption
Revenue is recognized at the time the product is sold, shipped, or delivered - Answers realization
Which one of the following assumptions or principles most logically supports the preparation of a single
set of consolidated financial statements that combines the financial information of several wholly
owned but separately identifiable businesses? - Answers reporting entity
In terms of debits and credits, which types of accounts have the same (debit or credit) normal balances?
- Answers dividends, expenses, assets
Information related to the Berkley Company for the calendar year 2015 follows:
Liabilities, December 31, 2015 $400
Assets, December 31, 2015 700
Dividends Distributed during 2015 90
Liabilities, December 31, 2014 250
Assets, December 31, 2014 350
Assuming NO capital stock was issued during 2015, the net income earned by the Berkley company
during 2015 was - Answers Beg RE 100
+Net income X
-Dividends 90
=End RE 300
