Financial Accounting & Standards Test Bank

CHAPTER 1
FINANCIAL ACCOUNTING AND
ACCOUNTING STANDARDS
IFRS questions are available at te en! o" tis #a$ter%


TRUE&FALSE'Con#e$tual
Ans(er No% Des#ri$tion
F 1. Definition of financial accounting.
T 2. Purpose of financial statements.
T 3. Definition of financial accounting.
T 4. Capital allocation process.
F 5. Objective of financial reporting.
T . Decision!"sefulness approac#.
T $. "sers of financial statements.
F %. Committee on &ccounting Proce'ure.
F (. Passage of ne) F&*+ statement.
T 1,. *tatements of Financial &ccounting Concepts.
T 11. Creation of &ccounting Principles +oar'.
F 12. F&*+ Co'ification.
T 13. Co'e of Professional Con'uct.
F 14. -&&P an' political action.
T 15. Public Compan &ccounting Oversig#t +oar'.
T 1. /0pectations gap.
F 1$. Financial reports.
F 1%. Fair value information.
F 1(. nternational Financial eporting *tan'ar's.
F 2,. /t#ical issues.

)ULTIPLE CHOICE'Con#e$tual
Ans(er No% Des#ri$tion
a 21. Financial accounting.
' 22. "sers of financial reports.
' 23. 'entif t#e major financial statements.
a 24. Financial reporting entit.
' 25. Differences bet)een financial an' managerial accounting.
b 2. Financial reporting communication.
b 2$. anagerial accounting.
a 2%. Capital allocation process.
' 2(. /fficient use of resources.
' 3,. Capital allocation process.
c 31. Financial statement information.
c 32. &ccounting profession c#allenge.
c 33. Financial reporting objective.
' 34. Financial statements primar users.

,1&/ Test *an+ "or Inter,e!iate A##ountin-. Fi"teent E!ition

c 35. nvestors 'ecision maing.
)ULTIPLE CHOICE'Con#e$tual 6cont.7
Ans(er No% Des#ri$tion
b 3. &ccrual accounting.
c 3$. /ntit perspective.
c 3%. eaning of 8generall accepte'.9
b 3(. Common set of stan'ar's an' proce'ures.
a 4,. :imitation of general purpose financial statements.
c 41. *ecurities an' /0c#ange Commission an' accounting stan'ar' setting.
' 42. Due process in F&*+ stan'ar' setting.
' 43. Organi;ations responsible for setting accounting stan'ar's.
b 44. eason for &ccounting Principles +oar' creation
b 45. Organi;ation issuing &ccounting esearc# +ulletins.
a 4. C#aracteristic of -&&P.
c 4$. C#aracteristics of -&&P.
' 4%. F&*+ accounting stan'ar's.
c 4(. F&*+ stan'ar' passage.
b 5,. Purpose of /merging ssues Tas Force.
a 51. &CP& role in stan'ar' setting.
c 52. ole of */C.
c 53. Po)ers of t#e */C.
' 54. */C enforcement.
' 55. Creation of F&*+.
' 5. &ppointment of F&*+ members.
a 5$. Purpose of t#e Financial &ccounting Foun'ation.
b 5%. C#aracteristics of F&*+.
b 5(. F&*+ an' <'ue process< sstem.
b ,. Publications of F&*+.
c 1. Purpose of F&*+ Tec#nical +ulletins.
' 2. Purpose of /merging ssues Tas Force.
b 3. ole of t#e &CP&.
b 4. Pronouncement issue' b t#e &P+.
c 5. *tan'ar' setting organi;ations.
' . 'entification of stan'ar' setting organi;ations.
c $. *tatements of financial accounting concepts.
P
' %. F&*+ members.
P
' (. F&*+ statement process.
' $,. =ature of -&&P.
' $1. +o' )#ic# promulgates -&&P.
' $2. Publications )#ic# are not -&&P.
' $3. Publications )#ic# are not -&&P.
b $4. Co'e for Professional Con'uct ule 2,3.
c $5. Purpose of F&*+ staff position.
c $. Components of -&&P.
a $$. Political environment of stan'ar' setting.
c $%. nternational &ccounting *tan'ar's +oar'.

, Financial &ccounting an' &ccounting *tan'ar's 1&3

)ULTIPLE CHOICE'Con#e$tual 6cont.7
Ans(er No% Des#ri$tion
' $(. *tan'ar' setting process pressure.
a %,. Danger of politics in stan'ar' setting
c %1. Definition of <e0pectation gap<.
b %2. eason accounting stan'ar's 'iffer across countries.
' %3. &'vantage of countries a'opting same accounting stan'ar's.
a %4. /t#ical concern of accountants.

P
=ote> t#ese ?uestions also appear in t#e Problem!*olving *urvival -ui'e.



E0ERCISES
Ite,
Des#ri$tion
/1!%5 Objectives of financial reporting.
/1!% Development of accounting principles.
/1!%$ Publications an' organi;ations.
/1!%% F&*+.
/1!%( /volution of a statement of financial accounting stan'ar's.




CHAPTER LEARNING O*ECTI2ES
1. 'entif t#e major financial statements an' ot#er means of financial reporting.
2. /0plain #o) accounting assists in t#e efficient use of scarce resources.
3. 'entif t#e objective of financial reporting.
4. /0plain t#e nee' for accounting stan'ar's.
5. 'entif t#e major polic!setting bo'ies an' t#eir role in t#e stan'ar'!setting process.
. /0plain t#e meaning of generall accepte' accounting principles 6-&&P7 an' t#e role of t#e
Co'ification for -&&P.
$. Describe t#e impact of user groups on t#e rule!maing process.
%. Describe some of t#e c#allenges facing financial reporting.
(. "n'erstan' issues relate' to et#ics an' financial accounting.
1,. Compare t#e proce'ures relate' to financial accounting an' accounting stan'ar's un'er
-&&P an' F*.