TEST BANK For Intermediate Accounting, 11th Edition by David Spiceland, Mark Nelson, Wayne Thomas, Jennifer. All Chapters 1-21.

Test Bank For Intermediate Accounting,
n n n n n




11th Edition
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by David Spiceland, Mark Nelson, Wayne Thomas, Jennifer
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Version 1n 1

,Answer Key n




Test name: chapter 1
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1)
n




TERM PHRASE Term number n




that matches
n n




the phrase.
n n




1. Predictive va lue
n n Information is useful in n n n 1
projecting cash flows. n n




2. Relevance
n Pertinent to the decision at n n n n 2
hand.
3. Distribution
n to Information is available prior n n n 5
owners to the decision.
n n




4. Confirmatory
n Decrease in equity due to n n n n 3
value transfers to owners.
n n n




5. Timeliness
n Information confirms n 4
expectations.
2)
TERM PHRASE Term number n




that matches
n n




the phrase.
n




1. Gain
n Along with relevance, a
n n n 5
fundamental decision-specific n




quality.
n




2. Materiality
n
Results if an asset is sold
n n n n n for 1
more than book value.
n n n




3. Completeness
n Contains all information n n 3
necessary for faithful n n




representation.
4. Comprehensive
n The change in equity from
n n n n 4
income nonowner transactions. n




Version 1 n 2

, 5. Faithful
n Concerns the decision-making n n 2
representatio
n impact of both the amount and
n n n n n




n nature of an item.
n n n n




3)
TERM PHRASE Term number n




that matches
n n




the phrase.
n n




1. Neutrality Important in analysis between n n n 2
firms.
2. Comparability Accounting information should n n 1
be unbiased.
n




3. Consistency The decision to include an
n n n n 5
amount in the financial
n n n




statements.
n




4. Cost-effectiveness n Applying the same accounting n n n 3
practices over time. n n




5. Recognition Considers the value of using n n n n 4
information relative to cost of n n n n




providing it.
n n




4)
TERM PHRASE Term number n




that matches
n n




the phrase.
n n




1. Monetary unitn Implies consensus among n n 2
assumption
n different observers. n




2. Verifiability Assumes all transactions can be
n n n n 3
identified with a particular n n n




entity.
n




3. Economic entity
n Assumes an entity will continue
n n n n 4
assumption
n to operate indefinitely.
n n




4. Going concern
n Requires reporting the n n 5
assumption
n financial life of an entity in n n n n n




discrete time frames.
n n n




5. Periodicity Ignores the possibility of n n n 1
assumption
n inflation.
5)
TERM PHRASE Term number n




that matches n




the phrase.
n




1. Historical
n cost Basis of measurement for fixed
n n n n 1

Version 1 n 3

, assets.
2. Materiality Discounts future cash flows. n n n 5
3. Revenue Occurs when goods or services n n n n 3
recognitio
n are transferred to the
n n n




n customer.
n




4. Full disclosure
n Reporting of all information n n n 4
that could affect decisions.
n n n




5. Present value n Application of GAAP sometimes n n n 2
avoided under this constraint. n n n




6)
TERM PHRASE Term number n




that matches
n n




the phrase.
n n




1. Financial Undermines representational n 3
Accounting Standards
n n faithfulness by being n n




Board
n inconsistent with neutrality.
n n n




2. Accounting It established GAAP before the
n n n n 2
Principles Board
n n FASB.
3. Conservatism Its EITF Issues are GAAP when
n n n n n 1
entered in the Accounting n n n




Standards Codification.
n n




4. American It has the authority to set U.S.
n n n n n n 5
Institute of CPAs
n n n accounting standards. n




(AICPA)
n




5. Securities and n It is the national organization
n n n n 4
Exchange Commission
n n for CPAs in the United States.
n n n n n




7)
TERM PHRASE Term number n




that matches
n




the phrase.
n




1. Expenses
n Net assets. n 2
2. Equity
n Outflows of resources n n to 1
generate revenues.
n n




3. Distributions to
n Cash dividends. n 3
owners
4. Investments by n Claims of creditors against n n n 5
owners
n the assets of a business.
n n n n




5. Liabilities Transfers of resources in n n n 4
exchange for common and n n n




preferred stock.
n n




Version 1 n 4