TEST BANK
Intermediate Accounting, 18th Edition
by Kieso, Warfield Chapter 1 - 23 Complete
,Table of Contents yt yt
1 The Environment and Conceptual Framework of Financial Reporting
yt yt yt yt yt yt yt yt
2 The Accounting Information System
yt yt yt yt
3 Income Statement, Related Information, and Revenue Recognition
yt yt yt yt yt yt yt
4 Balance Sheet and Statement of Cash Flows
yt yt yt yt yt yt yt
5 Accounting and the Time Value of Money
yt yt yt yt yt yt yt
6 Cash and Receivables
yt yt yt
7 Valuation of Inventories: A Cost-Basis Approach
yt yt yt yt yt yt
8 Inventories: Additional Valuation Issues
yt yt yt yt
9 Acquisition and Disposition of Property, Plant, and Equipment
yt yt yt yt yt yt yt yt
10 Depreciation, Impairments, and Depletion
yt yt yt yt
11 Intangible Assets
yt yt
12 Current Liabilities and Contingencies
yt yt yt yt
13 Long-Term Liabilities
yt yt
14 Stockholders’ Equity
yt yt
15 Dilutive Securities and Earnings per Share
yt yt yt yt yt yt
16 Investments
yt
17 Revenue Recognition
yt yt
18 Accounting for Income Taxes
yt yt yt yt
19 Accounting for Pensions and Postretirement Benefits
yt yt yt yt yt yt
20 Accounting for Leases
yt yt yt
21 Accounting Changes and Error Analysis
yt yt yt yt yt
22 Statement of Cash Flows
yt yt yt yt
23 Full Disclosure in Financial Reporting
yt yt yt yt yt yt
, CHAPTER 1 yt
THE ENVIRONMENT AND CONCEPTUAL FRAMEWORK
yt yt yt yt yt
OF FINANCIAL REPORTING yt yt
IFRS questions are available at the end of this chapter.
yt yt yt yt yt yt yt yt yt
TRUE-FALSE—Conceptual
1. Financial statements are the principal means through which a company communicates its fina
yt yt yt yt yt yt yt yt yt yt yt yt
ncial information to those outside it.
yt yt yt yt yt
Ans:y t T,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytPreparation,ytIFRS:ytNone
2. Users of financial reports of a company use the information provided by these reports
y t y t y t y t y t y t y t y t y t y t y t y t y t y t
to make capital allocation decisions.
yt yt yt yt
Ans:y t T,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytPreparation,ytIFRS:ytNone
3. An effective process of capital allocation provides an efficient market for buying and selling se
yt yt yt yt yt yt yt yt yt yt yt yt yt yt
curities and obtaining and granting credit.
yt yt yt yt yt
Ans:y t T,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytPreparation,ytIFRS:ytNone
4. Investors are interested in financial reporting because it provides information that is useful for
yt yt yt yt yt yt yt yt yt yt yt yt yt yt
making decisions. yt
Ans:y t T,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytPreparation,ytIFRS:ytNone
5. Users of financial accounting statements have both coinciding and conflicting needs
y t y t y t y t y t y t y t y t y t y t y t
for information of various types.
yt yt yt yt
Ans:y t T,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytPreparation,ytIFRS:ytNone
6. Although the FASB has developed a conceptual framework, no Statements of Financial Acco
yt yt yt yt yt yt yt yt yt yt yt yt
unting Concepts have been issued to date.
yt yt yt yt yt yt
Ans:ytF,ytLO:yt1,ytBloom:ytK,ytDifficulty:ytModerate,ytMin:yt1,ytAACSB:ytKnowledge,ytAICPAytBC:ytNone,ytAICPAytAC:ytReporting,ytAICPAytPC:ytNone,ytIMA:ytReportingyt
&y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
7. The passage of a new FASB Accounting Standards Update requires the support of five of the
yt yt yt yt yt yt yt yt yt yt yt yt yt yt y t y
seven board members.
t yt yt
Ans:y t F,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytPreparation,ytIFRS:ytNone
8. Statements of Financial Accounting Concepts set forth fundamental objectives and concepts
yt yt yt yt yt yt yt yt yt y t yt
that are used by the FASB in developing future standards of financial accounting and reportin
yt yt yt yt yt yt yt yt yt yt yt yt yt yt
g.
Ans:y t T,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
9. The FASB’s Codification creates a new set of GAAP.
yt yt yt yt yt yt yt yt
Ans:y t F,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Rep
ortingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
, 1-2
yt yt Test Bank for Intermediate Accounting, Eighteenth Edition
yt yt yt yt yt yt
10. The objective of financial reporting is to report the plans made by a company to improve the pr
yt yt yt yt yt yt yt yt yt yt yt yt yt yt yt yt yt
oductivity of its employees. yt yt yt
Ans:y t F,y t LO:y t 1,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytPreparation,ytIFRS:ytNone
11. A soundly developed conceptual framework enables the FASB to issue more useful a
y t y t y t y t y t y t y t y t y t y t y t y t
nd consistent pronouncements over time.
yt yt yt yt
Ans:y t T,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
12. A conceptual framework is a coherent system of concepts that flow from an objective.
yt yt yt yt yt yt yt yt yt yt yt yt yt
Ans:y t T,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
13. The first level of the conceptual framework identifies the recognition, measurement, a
y t y t y t y t y t y t y t y t y t y t y t
nd disclosure concepts used in establishing accounting standards.
yt yt yt yt yt yt yt
Ans:y t F,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
14. The objective of financial reporting serves as the foundation of the conceptual framework.
yt yt yt yt yt yt yt yt yt yt yt yt
Ans:y t T,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
15. Users of financial statements are assumed to need no knowledge of business and financial ac
yt yt yt yt yt yt yt yt yt yt yt yt yt yt
counting matters to understand the information contained in financial statements.
yt yt yt yt yt yt yt yt yt
Ans:y t F,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
16. Relevance and faithful representation are the two fundamental qualities that
y t y t y t y t y t y t y t y t y t y t
make accounting information useful for decision-making.
yt yt yt yt yt
Ans:y t T,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
17. The idea of consistency does not mean that companies cannot switch from one accounting m
yt yt yt yt yt yt yt yt yt yt yt yt yt yt
ethod to another. yt yt
Ans:ytT,ytLO:yt2,ytBloom:ytC,ytDifficulty:ytModerate,ytMin:yt1,ytAACSB:ytKnowledge,ytAICPAytBC:ytNone,ytAICPAytAC:ytReporting,ytAICPAytPC:ytNone,ytIMA:ytReportingyt&y
t Control:ytFinancial ytStatementytAnalysis,ytIFRS:ytNone
18. Timeliness and neutrality are two ingredients of relevance.
yt yt yt yt yt yt yt
Ans:y t F,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
19. Verifiability and predictive value are two ingredients of faithful representation.
yt yt yt yt yt yt yt yt yt
Ans:y t F,y t LO:y t 2,y t Bloom:y t K,y t Difficulty:y t Easy,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Reporting,y t AICPAy t PC:y t None,y t IMA:y t Report
ingy t &y t Control:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
20. Revenues, gains, and distributions to owners all increase equity.
yt yt yt yt yt yt yt yt
Ans:y t F,y t LO:y t 2,y t Bloom:y t C,y t Difficulty:y t Moderate,y t Min:y t 1,y t AACSB:y t Knowledge,y t AICPAy t BC:y t None,y t AICPAy t AC:y t Measurementy t Analysisy t andy t Interpre
tation,y t AICPAytPC:ytNone,ytIMA:ytReportingyt&ytControl:ytFinancialytStatementytAnalysis,ytIFRS:ytNone
21. Comprehensive income includes all changes in equity during a period except y t y t y t y t y t y t y t y t y t y t y
tthose resulting from investments by owners and distributions to owners.
yt yt yt yt yt yt yt yt yt
Ans:ytT,ytLO:yt2,ytBloom:ytK,ytDifficulty:ytEasy,ytMin:yt1,ytAACSB:ytKnowledge,ytAICPAytBC:ytNone,ytAICPAytAC:ytMeasurementytAnalysisytandytInterpretation,ytAICPA
y t PC:ytNone,ytIMA:yt Reportingyt&ytControl:ytFinancial ytStatementytAnalysis,ytIFRS:ytNone
