Franklyn A Plus Pass
TEST BANK for Intermediate Accounting 3rd Edition, by
Elizabeth Gordon, Jana Raedy, Alexander Sannella
All Chapters Covered 1-22| 100% Verified Questions &
Accurate Solutions| Exam Preparation Q&As| A+ PASS
ASSURED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Franklyn A Plus Pass
Chapter 1 The Financial Reporting Environment
1.1 Overview of Financial Reporting
1) The financial reporting process generates three basic financial statements. Correct Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
2) The demand for financial information is based on market participant demand. Correct Answer: TRUE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
3) Managers of economic entities are best considered to be users of financial information. Correct
Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
Fr
an
4) Managers of economic entities are best considered to be preparers of financial information. Correct
Answer: TRUE
kl
Diff: 1
yn
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
e
A
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly traded
pl
companies.
us
Correct Answer: TRUE
Diff: 2
Pa
Page | 2
ss
, Franklyn A Plus Pass
Objective: 1.1 IFRS/GAAP: GAAP
AACSB: Application of knowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded companies. Correct
Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP
AACSB: Application of knowledge
7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards and
oversees the audits of public companies in the United States.
Correct Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP
AACSB: Application of knowledge
8) Financial accounting standards influence the behavior of managers and other internal users. Correct
Answer: TRUE
Fr
Diff: 2
an
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
kl
yn
9) Theories and procedures that evolve as a result of lobbying from various groups are examples of
e
proactive factors within the legal, economic, political, and social environment.
A
Correct Answer: FALSE
Diff: 1
pl
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
us
AACSB: Application of knowledge
Pa
Page | 3
ss
, Franklyn A Plus Pass
10) Financial information includes information that is not governed by rules set forth by the accounting
standard-setting bodies.
Correct Answer: TRUE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
11) What is the term that describes the process of identifying, measuring, and communicating financial
information about an economic entity to various user groups?
A) financial reporting
B) accounting standard setting
C) financial statement
D) financial accounting Correct Answer: D
Diff: 2
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
12) Which element of financial accounting involves identifying the individuals who demand financial
Fr
information?
an
A) financial information
B) economic entity
kl
C) user groups
yn
D) legal, economic, political, and social environment Correct Answer: C
e
Diff: 1
A
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
pl
AACSB: Application of knowledge
us
Pa
Page | 4
ss
TEST BANK for Intermediate Accounting 3rd Edition, by
Elizabeth Gordon, Jana Raedy, Alexander Sannella
All Chapters Covered 1-22| 100% Verified Questions &
Accurate Solutions| Exam Preparation Q&As| A+ PASS
ASSURED
Fr
an
kl
yn
e
A
pl
us
Pa
Page | 1
ss
, Franklyn A Plus Pass
Chapter 1 The Financial Reporting Environment
1.1 Overview of Financial Reporting
1) The financial reporting process generates three basic financial statements. Correct Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
2) The demand for financial information is based on market participant demand. Correct Answer: TRUE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
3) Managers of economic entities are best considered to be users of financial information. Correct
Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
Fr
an
4) Managers of economic entities are best considered to be preparers of financial information. Correct
Answer: TRUE
kl
Diff: 1
yn
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
e
A
5) The Securities and Exchange Commission (SEC) regulates financial reporting for publicly traded
pl
companies.
us
Correct Answer: TRUE
Diff: 2
Pa
Page | 2
ss
, Franklyn A Plus Pass
Objective: 1.1 IFRS/GAAP: GAAP
AACSB: Application of knowledge
6) The FASB gives the SEC authority to regulate accounting for publicly traded companies. Correct
Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP
AACSB: Application of knowledge
7) The Public Company Accounting Oversight Board (PCAOB) sets financial accounting standards and
oversees the audits of public companies in the United States.
Correct Answer: FALSE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP
AACSB: Application of knowledge
8) Financial accounting standards influence the behavior of managers and other internal users. Correct
Answer: TRUE
Fr
Diff: 2
an
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
kl
yn
9) Theories and procedures that evolve as a result of lobbying from various groups are examples of
e
proactive factors within the legal, economic, political, and social environment.
A
Correct Answer: FALSE
Diff: 1
pl
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
us
AACSB: Application of knowledge
Pa
Page | 3
ss
, Franklyn A Plus Pass
10) Financial information includes information that is not governed by rules set forth by the accounting
standard-setting bodies.
Correct Answer: TRUE
Diff: 1
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
11) What is the term that describes the process of identifying, measuring, and communicating financial
information about an economic entity to various user groups?
A) financial reporting
B) accounting standard setting
C) financial statement
D) financial accounting Correct Answer: D
Diff: 2
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
AACSB: Application of knowledge
12) Which element of financial accounting involves identifying the individuals who demand financial
Fr
information?
an
A) financial information
B) economic entity
kl
C) user groups
yn
D) legal, economic, political, and social environment Correct Answer: C
e
Diff: 1
A
Objective: 1.1 IFRS/GAAP: GAAP/IFRS
pl
AACSB: Application of knowledge
us
Pa
Page | 4
ss
