Test Bank to accompany Intermediate Accounting IFRS Edition

CHAPTER 1 n




FINANCIAL ACCOUNTING AND
n n n



ACCOUNTING STANDARDS n




CHAPTER LEARNING OBJECTIVES
n n



1. Identifynthenmajornfinancialnstatementsnandnothernmeansnofnfinancialnreporting.
2. Explainnhownaccountingnassistsninnthenefficientnusenofnscarcenresources.
3. Explainnthenneednfornhigh-qualitynstandards.
4. Identifynthenobjectivesnofnfinancialnreporting.
5. Identifynthenmajornpolicy-settingnbodiesnandntheirnroleninnthenstandard-settingnprocess.
6. ExplainnthenmeaningnofnIFRS.
7. Describenthenchallengesnfacingnfinancialnreporting.
*8. IdentitynthenmajornU.S.npolicy-settingnbodiesnandntheirnroleninnthenstandard-settingnprocess.
*nThisnmaterialncannbenfoundninnthenAppendixntonthenchapter

,1n-n2 TestnBanknfornIntermediatenAccounting:nIFRSnEdition

TRUE-FALSE—Conceptual
1. Financialnaccountingnisnthenprocessnofnidentifying,nmeasuring,nanalyzing,nandncommunicatingnf
inancialninformationnneedednbynmanagementntonplan,nevaluate,nandncontrolnannorganiza-
ntion'snoperations.




2. Financialnstatementsnarenthenprincipalnmeansnthroughnwhichnfinancialninformationnisncommuni
catedntonthosenoutsidenannenterprise.

3. ThenmajornfinancialnstatementsnusednundernInternationalnFinancialnReportingnStandardsn(IFR
S)nincludenthenstatementnofnchangesninnfinancialnpositionnandnthenstatementnofnstockholders’ne
quity.

4. Innorderntonprovideninformationnthatnisnusefulninndecisionnmakingnandncapitalnallocation,nthenInt
ernationalnFinancialnReportingnStandardsn(IFRS)nrequiresnallncompaniesntonusenancommonncur
rency.

5. Usersnofnthenfinancialninformationnprovidednbynancompanynusenthatninformationntonmakencapita
lnallocationndecisions.

6. Anneffectivenprocessnofncapitalnallocationnpromotesnproductivitynandnprovidesnannefficientnmar
ketnfornbuyingnandnsellingnsecuritiesnandnobtainingnandngrantingncredit.

7. Overn115ncountriesnrequirenornpermitnusenofnInternationalnFinancialnReportingnStandardsn(IFR
S).

8. Whilenobjectivesnfornfinancialnreportingnexistnonnanninformalnbasis,nnonformalnobjectivesnhaven
beennadopted.

9. Onen weaknessn ofn accrualn accountingn isn thatn itn doesn notn providen an goodn indicationn ofn then
enterprise'snpresentnandncontinuingnabilityntongeneratenfavorablencashnflows.

10. ThenpassagenofnannewnFASBnStandardsnStatementnrequiresnthensupportnofnfivenofnthensevenn
boardnmembers.

11. InternationalnFinancialnReportingnStandardsnprecedednInternationalnAccountingnStandards.

12. Thenstandard-
settingnstructurenusednbynthenInternationalnAccountingnStandardsnBoardnisnverynsimilarntonthatn
usednbynthenFinancialnAccountingnStandardsnBoard.

13. Then rules-basedn standardsn ofn IASBn aren moren detailedn thann then simpler,n principles-
basednstandardsnofnU.S.nGAAP.

14. Then Internationaln AccountingnStandardsnBoardnissuesnInternationalnFinancialnReportingnSta
ndards.

15. InternationalnAccountingnStandardsnarennonlongernconsiderednapplicablenbecausentheynhaven
beennreplacednbynInternationalnFinancialnReportingnStandards.

,Full file at http://testbankinstant.CH/Test-Bank-for-Intermediate-
n n n


Accounting-Volume-1-IFRS-1E--Kieso--
n

16. Thenstandardsnissuednbynvariousnstandard-
settingnorganizationsnaroundnthenworldnincludenstandardsnthatnarenprofit-
orientednandninvestor-focused.
17. Thentwonmajornstandard-
settingnorganizationsninnthenworldnarenthenInternationalnAccountingnStandardsnBoardn(IASB)na
ndnInternationalnOrganizationnofnSecuritiesnCommissionn(IOSCO).

18. IFRSnisnconsiderednmorencomprehensiventhannU.S.nGAAPnandnthenstandardsncontainnmoreni
mplementationnguidancenthannU.S.nGAAP.

19. ThenInternationalnOrganizationnofnSecuritiesnCommissionsn(IOSCO)nsetsnaccountingnstandardsnf
ornthosencountriesnwhichnhavennotnyetnadoptednIFRS.

20. ThenInternationalnAccountingnStandardsnBoardn(IASB)nfollowsnspecificnstepsninndevelopingnInt
ernationalnFinancialnReportingnStandardsn(IFRS);nthenfirstnstepninnthenprocessnisnholdingnanpu
blicnhearing.

21. AnunanimousnvotenbynallnBoardnmembersnisnneededntonissuenannewnInternationalnFinancialnRe
portingnStandardn(IFRS).

22. Then Internationaln Accountingn Standardsn Boardn (IASB)n hasn 14n membersn andn eachn membern
ofnthenIASBnmustncomenfromnandifferentncountry.

23. InterpretationsnissuednbynIFRICnarenmorenauthoritativenthannIASBnStandardsnandnInterpretati
ons.

24. ThenInternationalnAccountingnStandardsnBoardn(IASB)nisnanregulatorynagencynwithnenforceme
ntnpowersnfornitsnInternationalnFinancialnReportingnStandardsn(IFRS).

25. Internationalnfinancialnreportingninterpretationsn(issuednbynthenInternationalnAccountingnStand
ardsnBoard)narenconsiderednauthoritativenandnmustnbenfollowed.

26. Financialnreportsninnthenearlyn21stncenturyndidnnotnprovidenanyninformationnaboutnancompany’
snsoftnassets.

27. Accountingnstandardsnarennownlessnlikelyntonrequirenthenrecordingnorndisclosurenofnfairnvaluenin
formationnduentonitsninherentnsubjectivity.

28. IFRSnarenanproductnofncarefulnlogicnornempiricalnfindingsnandnarennotninfluencednbynpoliticalnac
tion.

29. Thenexpectationsngapnisncausednbynwhatnthenpublicnthinksnaccountantsnshouldnbendoingnandn
whatnaccountantsnthinkntheyncanndo.

30. EthicalnissuesninnfinancialnaccountingnarengovernednbynthenAICPA.

31. PoliticsnandnpoliticalnpressureninnestablishingnIFRSnisnannegativenforce.

32. Significantnfinancialnreportingnissuesnfacingnglobalnfinancialnreportingnandnefficientncapitalnallo
cationnincludenhowntonprovidenbackward-lookingninformation.


downloadnfullnfilenatnhttp://testbankinstant.com

, 1n-n4 TestnBanknfornIntermediatenAccounting:nIFRSnEdition

33. ThenNorwalknAgreementn formalizedn then FASB’sn andn IASB’sn commitmentnton convergencen of
U.S.nGAAPnandninternationalnstandards.