Test Bank - Intermediate Accounting 18th Edition 18e by Donald E. Kieso Terry D. Warfield All Chapters Complete Guide A+

CHAPTER 1 g




FINANCIAL ACCOUNTING AND
g g g

ACCOUNTING STANDARDS g




CHAPTERgLEARNINGgOBJECTIVES
1. Identifygthegmajorgfinancialgstatementsgandgothergmeansgofgfinancialgreporting.
2. Explainghowgaccountinggassistsgingthegefficientgusegofgscarcegresources.
3. Explaingthegneedgforghigh-qualitygstandards.
4. Identifygthegobjectivesgofgfinancialgreporting.
5. Identifygthegmajorgpolicy-settinggbodiesgandgtheirgrolegingthegstandard-settinggprocess.
6. ExplaingthegmeaninggofgIFRS.
7. Describegthegchallengesgfacinggfinancialgreporting.
*8. IdentitygthegmajorgU.S.gpolicy-settinggbodiesgandgtheirgrolegingthegstandard-settinggprocess.
*gThisgmaterialgcangbegfoundgingthegAppendixgtogthegchapter

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n
TRUE-FALSE—Conceptual
1. Financialgaccountinggisgthegprocessgofgidentifying,gmeasuring,ganalyzing,gandgcommunicati
nggfinancialginformationgneededgbygmanagementgtogplan,gevaluate,gandgcontrolgangorganiza
-gtion'sgoperations.

2. Financialgstatementsgaregthegprincipalgmeansgthroughgwhichgfinancialginformationgisgcomm
unicatedgtogthosegoutsidegangenterprise.

3. ThegmajorgfinancialgstatementsgusedgundergInternationalgFinancialgReportinggStandardsg(IF
RS)gincludegthegstatementgofgchangesgingfinancialgpositiongandgthegstatementgofgstockhold
ers’gequity.

4. Ingordergtogprovideginformationgthatgisgusefulgingdecisiongmakinggandgcapitalgallocation,gtheg
InternationalgFinancialgReportinggStandardsg(IFRS)grequiresgallgcompaniesgtogusegagcomm
ongcurrency.

5. Usersgofgthegfinancialginformationgprovidedgbygagcompanygusegthatginformationgtogmakegca
pitalgallocationgdecisions.

6. Angeffectivegprocessgofgcapitalgallocationgpromotesgproductivitygandgprovidesgangefficientgm
arketgforgbuyinggandgsellinggsecuritiesgandgobtaininggandggrantinggcredit.

7. Overg115gcountriesgrequiregorgpermitgusegofgInternationalgFinancialgReportinggStandardsg(I
FRS).

8. Whilegobjectivesgforgfinancialgreportinggexistgonganginformalgbasis,gnogformalgobjectivesgha
vegbeengadopted.

9. Oneg weaknessg ofg accrualg accountingg isg thatg itg doesg notg provideg ag goodg indicationg ofg t
hegenterprise'sgpresentgandgcontinuinggabilitygtoggenerategfavorablegcashgflows.

10. ThegpassagegofgagnewgFASBgStandardsgStatementgrequiresgthegsupportgofgfivegofgthegsev
engboardgmembers.

11. InternationalgFinancialgReportinggStandardsgprecededgInternationalgAccountinggStandards.

12. Thegstandard-
settinggstructuregusedgbygthegInternationalgAccountinggStandardsgBoardgisgverygsimilargtogth
atgusedgbygthegFinancialgAccountinggStandardsgBoard.

13. Theg rules-basedg standardsg ofg IASBg areg moreg detailedg thang theg simpler,g principles-
basedgstandardsgofgU.S.gGAAP.

14. Theg Internationalg AccountinggStandardsgBoardgissuesgInternationalgFinancialgReportinggSt
andards.

15. InternationalgAccountinggStandardsgaregnoglongergconsideredgapplicablegbecausegtheygha
vegbeengreplacedgbygInternationalgFinancialgReportinggStandards.

,Fullgfilegatghttp://testbankinstant.CH/Test-Bank-for-Intermediate-
Accounting-Volume-1-IFRS-1E--Kieso--
g
16. Thegstandardsgissuedgbygvariousgstandard-
settinggorganizationsgaroundgthegworldgincludegstandardsgthatgaregprofit-
orientedgandginvestor-focused.
17. Thegtwogmajorgstandard-
settinggorganizationsgingthegworldgaregthegInternationalgAccountinggStandardsgBoardg(IASB
)gandgInternationalgOrganizationgofgSecuritiesgCommissiong(IOSCO).

18. IFRSgisgconsideredgmoregcomprehensivegthangU.S.gGAAPgandgthegstandardsgcontaingmor
egimplementationgguidancegthangU.S.gGAAP.

19. ThegInternationalgOrganizationgofgSecuritiesgCommissionsg(IOSCO)gsetsgaccountinggstandar
dsgforgthosegcountriesgwhichghavegnotgyetgadoptedgIFRS.

20. ThegInternationalgAccountinggStandardsgBoardg(IASB)gfollowsgspecificgstepsgingdevelopingg
InternationalgFinancialgReportinggStandardsg(IFRS);gthegfirstgstepgingthegprocessgisgholding
gagpublicghearing.


21. AgunanimousgvotegbygallgBoardgmembersgisgneededgtogissuegagnewgInternationalgFinancial
gReportinggStandardg(IFRS).


22. Theg Internationalg Accountingg Standardsg Boardg (IASB)g hasg 14g membersg andg eachg memb
ergofgthegIASBgmustgcomegfromgagdifferentgcountry.

23. InterpretationsgissuedgbygIFRICgaregmoregauthoritativegthangIASBgStandardsgandgInterpret
ations.

24. ThegInternationalgAccountinggStandardsgBoardg(IASB)gisgagregulatorygagencygwithgenforce
mentgpowersgforgitsgInternationalgFinancialgReportinggStandardsg(IFRS).

25. Internationalgfinancialgreportingginterpretationsg(issuedgbygthegInternationalgAccountinggSta
ndardsgBoard)garegconsideredgauthoritativegandgmustgbegfollowed.

26. Financialgreportsgingthegearlyg21stgcenturygdidgnotgprovideganyginformationgaboutgagcompa
ny’sgsoftgassets.

27. Accountinggstandardsgaregnowglessglikelygtogrequiregthegrecordinggorgdisclosuregofgfairgvalu
eginformationgduegtogitsginherentgsubjectivity.

28. IFRSgaregagproductgofgcarefulglogicgorgempiricalgfindingsgandgaregnotginfluencedgbygpolitica
lgaction.

29. Thegexpectationsggapgisgcausedgbygwhatgthegpublicgthinksgaccountantsgshouldgbegdoingga
ndgwhatgaccountantsgthinkgtheygcangdo.

30. EthicalgissuesgingfinancialgaccountinggareggovernedgbygthegAICPA.

31. PoliticsgandgpoliticalgpressuregingestablishinggIFRSgisgagnegativegforce.

32. Significantgfinancialgreportinggissuesgfacinggglobalgfinancialgreportinggandgefficientgcapitalgal
locationgincludeghowgtogprovidegbackward-lookingginformation.


downloadgfullgfilegatghttp://testbankinstant.co
m

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33. ThegNorwalkgAgreementg formalizedg theg FASB’sg andg IASB’sg commitmentg tog convergenceg o
f
U.S.gGAAPgandginternationalgstandards.