Financial Accounting Exam 1 Practice Questions And Answers 100% Pass.
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Course
Financial Accounting
Institution
Financial Accounting
Financial Accounting Exam 1 Practice
Questions And Answers 100% Pass.
Financial accounting is the process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, evaluate, and control a company's
operations - answerFalse
Users of financial re...
Financial Accounting Exam 1 Practice
Questions And Answers 100% Pass.
Financial accounting is the process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, evaluate, and control a company's
operations - answer✔False
Users of financial reports of a company use the information provided by these reports to make
their capital allocation decisions - answer✔True
The FASBs Codification creates a net set of GAAP - answer✔False
Discontinued operations, and unusual gains and losses are both reported net of tax in the income
statement - answer✔False
Companies can change principles, but they must demonstrate that the newly adopted principle is
preferable to the old one - answer✔True
A conceptual framework is a coherent system of concepts that flow from an objective -
answer✔True
Relevance and faithful representation are the two fundamental qualities that make accounting
information useful for decision making - answer✔True
Which of the following represents a form of communication through financial reporting but NOT
through financial statements? - answer✔President's letter
Which of the following organizations HAS BEEN responsible for setting US accounting
standards? - answer✔Accounting Principles Board, Committee on Accounting Procedure, and
Financial Accounting Standards Board
Companies that are listed on a stock exchange are required to submit their financial statements to
the - answer✔SEC
The most significant current source of generally accepted accounting principles is the -
answer✔FASB
Which of the following is an ethical concern of accountants? - answer✔Earnings manipulation
The underlying theme of the conceptual framework is - answer✔Decision usefulness
The objective of general-purpose financial reporting is to provide financial information about
reporting entity to each of the following EXCEPT - answer✔Potential equity investors, potential
lenders, and present investors
What is meant by comparability when discussing financial accounting information? -
answer✔Information is measured and reported in a similar fashion across companies
A company issuing its annual financial reports within one month of the end of the year is an
example of which enhancing quality of accounting information? - answer✔Timeliness
Which basic assumption is illustrated when a firm reports financial results on an annual basis? -
answer✔Periodicity assumption
According to the FASB conceptual framework, which of the following elements describes
translations of events that affect a company DURING A PERIOD OF TIME? -
answer✔Expenses
When is revenue generally recognized? - answer✔When the company satisfies the performance
obligation
Recognizing expenses not when a company pays wages, but when the work actually contributes
to revenue in accordance with the - answer✔Expense recognition principle
The income statement reveals - answer✔Net earnings (net income) of a firm for a period of time
The major elements of the income statement are - answer✔Revenues, expenses, gains, and losses
Earnings per share data are required on the face of the - answer✔Income statement
The occurrence that most likely would have NO EFFECT on 2020 net incomes is the -
answer✔Correction of an error in the financial statements of a prior period discovered
subsequent to their issuance
Comprehensive income includes all of the following EXCEPT - answer✔Investments by owners
Current assets are presented in the balance sheet in - answer✔Order of their liquidity
The current assets section of the balance sheet should include - answer✔Inventory
Which item below is NOT a current liability? - answer✔Stock dividends distributable
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