Intermediate Accounting IFRS 4th edition by Donald E. Kieso
Intermediate Accounting IFRS 4th edition by Donald E. Kieso
Intermediate Accounting IFRS 4th edition by Donald E. Kieso
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Test Bank for Intermediate Accounting IFRS, 4th
Edition by Donald E. Kieso, Jerry J. Weygandt,
Terry D. Warfield A+
CHAPTER 1
FINANCIAL REPORTING AND ACCOUNTING STANDARDS
TRUE-FALSE—Conceptual
1. Financial statements are the principal means through which financial information is
communicated to those outside an enterprise.
Ans: T LO: 1.1
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
2. Capital markets are increasingly integrated and companies have greater flexibility in
deciding where to raise capital.
Ans: T LO: 1.1
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
3. The major financial statements used under International Financial Reporting Standards
(IFRS) include the statement of changes in financial position and the statement of stockholders’
equity.
Ans: F LO: 1.1
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
A+ Page 1
,Created By: A Solution
AICPA PC: Problem Solving and Decision-making IMA: None
4. General-purpose financial statements are not considered cost-effective because, while
they provide useful information, the cost to provide the information is quite high.
Ans: F LO: 1.2
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
5. Investors and creditors are considered the primary user group of general-purpose
financial reporting.
Ans: T LO: 1.2
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
6. An effective process of capital allocation promotes productivity and provides an efficient
market for buying and selling securities and obtaining and granting credit.
Ans: T LO: 1.2
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
7. The emphasis on “assessing cash flow prospects” means that the cash basis is preferred
over the accrual basis of accounting.
Ans: F LO: 1.2
A+ Page 2
,Created By: A Solution
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
8. While objectives for financial reporting exist on an informal basis, no formal objectives
have been adopted.
Ans: F LO: 1.2
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
9. One weakness of accrual accounting is that it does not provide a good indication of the
enterprise's present and continuing ability to generate favorable cash flows.
Ans: F LO: 1.2
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
10. The passage of a new International Financial Reporting Standard requires the support of
ten of the thirteen board members.
Ans: F LO: 1.3
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
A+ Page 3
, Created By: A Solution
11. International Financial Reporting Standards preceded International Accounting
Standards. Ans: F
LO: 1.3
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
12. The standard-setting structure includes a Monitoring Board whose purpose is to provide
advice and counsel to the IASB on major policies and technical issues.
Ans: F LO: 1.3
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
13. The overriding requirement of IFRS is that financial statements provide an error-free and
comprehensive presentation of a company’s financial position.
Ans: F LO: 1.3
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making IMA: None
14. The IFRS Foundation appoints members, reviews effectiveness, and helps in the
fundraising efforts of the IASB, IFRS Advisory Council, and IFRS Interpretations Committee.
Ans: T LO: 1.3
Bloom: K Difficulty: Easy Min: 1
AACSB: Analytic
A+ Page 4
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