Exam (elaborations)
INTERMEDIATE ACCOUNTING EXAM 1 (CH.1-3) QUESTIONS WITH COMPLETE ANSWERS
- Course
- Institution
INTERMEDIATE ACCOUNTING EXAM 1 (CH.1-3) QUESTIONS WITH COMPLETE ANSWERS
[Show more]
Content preview
INTERMEDIATE ACCOUNTING EXAM 1(CH.1-3) QUESTIONS WITH COMPLETE
ANSWERS
The information provided by financial reporting pertains to - Answer-individual business
enterprises, rather than to industries or an economy as a whole or to members of
society as consumers.
a requirement for an accounting principle to be called "generally accepted"? - Answer-
An authoritative accounting rule-making body has established it or it has been accepted
because of its universal application.
What is not due process in the context of standard setting at the FASB? - Answer-No
public hearings are held on proposed accounting standards
Characteristics of generally accepted accounting principles include all of the following
except - Answer-each principle is approved by the SEC.
ach of the following are true of the Securities and Exchange Commission except that -
Answer-the FASB relies on the SEC to develop accounting standards.
erican Institute of Certified Public Accountants (AICPA) continues to be involved in all of
the following except - Answer-developing auditing standards for public companies.
Which of the following is not true of generally accepted accounting principles? - Answer-
GAAP does not have substantial authoritative support.
Financial accounting standard-setting in the United States - Answer-can be described
as a social process which reflects political actions of various interested user groups as
well as a product of research and logic.
The purpose of the International Accounting Standards Board is to - Answer-promote
uniform accounting standards among countries of the world.
What is a possible danger if politics plays too big a role in accounting standard setting?
- Answer-Accounting standards that are not truly generally accepted.
What would be an advantage of having all countries adopt and follow the same
accounting standards? - Answer-Comparability and lower preparation costs.
3 purposes of financial reporting environment - Answer-identification, measurement
about economic entities, and communication
, what is gaap - Answer-Generally Accepted Accounting Principles
what is the role of the codification for gaap - Answer-a one stop shop for comprehensive
accounting guidance
major problems with the financial reporting environment - Answer-GAAP in the political
environment, evoking issue of fair value, and the expectations gap
hich of the following is not a benefit associated with the FASB Conceptual Framework
Project? - Answer-Business entities will need far less assistance from accountants
because the financial reporting process will be quite easy to apply.
The objective of general-purpose financial reporting is? - Answer-to provide financial
information about the reporting entity that is useful to present and potential equity
investors, lenders, and other creditors in making decisions in their capacity as capital
providers
Financial information exhibits the characteristic of consistency when - Answer-a
company applies the same accounting treatment to similar events, from period to
period.
Proponents of historical cost ordinarily maintain that in comparison with all other
valuation alternatives for general purpose financial reporting, statements prepared using
historical costs are more - Answer-verifiable
The measurement principle includes the - Answer-historical cost principle and the fair
value principle.
The accounting principle of expense recognition is best demonstrated by - Answer-
matching effort (expense) with accomplishment (revenue).
Which of the following serves as the justification for the periodic recording of
depreciation expense? - Answer-Systematic and rational allocation of cost over the
periods benefited.
Application of the full disclosure principle - Answer-is demonstrated by the use of
supplementary information explaining the effects of financing arrangements.
Which of the following is an argument against using historical cost in accounting? -
Answer-Fair values are more relevant.
Which of the following is a component of the revenue recognition principle? - Answer-
Recognition occurs when the performance obligation is satisfied.
Which accounting assumption or principle is being violated if a company is a party to
major litigation that it may lose and decides not to include the information in the financial
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller biggdreamer. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
81113 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now