TEST BANK
Intermediate Accounting, 18th Edition
by Kieso, Warfield Chapter 1 - 23 Complete
,Table of Contents
u u
1uTheuEnvironmentuanduConceptualuFrameworkuofuFinancialuReporting
2uTheuAccountinguInformationuSystem
3uIncomeuStatement,uRelateduInformation,uanduRevenueuRecognition
4uBalanceuSheetuanduStatementuofuCashuFlows
5uAccountinguandutheuTimeuValueuofuMoney
6uCashuanduReceivables
7uValuationuofuInventories:uAuCost-BasisuApproach
8uInventories:uAdditionaluValuationuIssues
9uAcquisitionuanduDispositionuofuProperty,uPlant,uanduEquipment
10uDepreciation,uImpairments,uanduDepletion
11uIntangibleuAssets
12uCurrentuLiabilitiesuanduContingencies
13uLong-TermuLiabilities
14uStockholders’uEquity
15uDilutiveuSecuritiesuanduEarningsuperuShare
16uInvestments
17uRevenueuRecognition
18uAccountinguforuIncomeuTaxes
19uAccountinguforuPensionsuanduPostretirementuBenefits
20uAccountinguforuLeases
21uAccountinguChangesuanduErroruAnalysis
22uStatementuofuCashuFlows
23uFulluDisclosureuinuFinancialuReportingu
, CHAPTER 1 u
THE ENVIRONMENT AND CONCEPTUAL FRAMEWORK
u u u u u
OF FINANCIAL REPORTING u u
IFRSuquestionsuareuavailableuatutheuenduofuthisuchapter.
TRUE-FALSE—Conceptual
1. Financialustatementsuareutheuprincipalumeansuthroughuwhichuaucompanyucommunicatesuitsufin
ancialuinformationutouthoseuoutsideuit.
Ans:u T,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuPreparation,uIFRS:uNone
2. Usersu ofu financialu reportsu ofu au companyu useu theu informationu providedu byu theseu reportsu tou
makeucapitaluallocationudecisions.
Ans:u T,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuPreparation,uIFRS:uNone
3. Anueffectiveuprocessuofucapitaluallocationuprovidesuanuefficientumarketuforubuyinguandusellingus
ecuritiesuanduobtaininguandugrantingucredit.
Ans:u T,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuPreparation,uIFRS:uNone
4. Investorsuareuinteresteduinufinancialureportingubecauseuituprovidesuinformationuthatuisuusefulufo
rumakingudecisions.
Ans:u T,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuPreparation,uIFRS:uNone
5. Usersu ofu financialu accountingu statementsu haveu bothu coincidingu andu conflictingu needsu forui
nformationuofuvariousutypes.
Ans:u T,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuPreparation,uIFRS:uNone
6. AlthoughutheuFASBuhasudevelopeduauconceptualuframework,unouStatementsuofuFinancialuAcc
ountinguConceptsuhaveubeenuissuedutoudate.
Ans:uF,uLO:u1,uBloom:uK,uDifficulty:uModerate,uMin:u1,uAACSB:uKnowledge,uAICPAuBC:uNone,uAICPAuAC:uReporting,uAICPAuPC:uNone,uIMA:uReporti
ngu&u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
7. TheupassageuofuaunewuFASBuAccountinguStandardsuUpdateurequiresutheusupportuofufiveuofu th
eusevenuboardumembers.
Ans:u F,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuPreparation,uIFRS:uNone
8. StatementsuofuFinancialuAccountinguConceptsusetuforthufundamentaluobjectivesuandu concepts
uthatuareuusedubyutheuFASBuinudevelopingufutureustandardsuof ufinancialuaccountinguandureporti
ng.
Ans:u T,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
9. TheuFASB’suCodificationucreatesuaunewusetuofuGAAP.
Ans:u F,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Report
ingu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
, 1u-u2 TestuBankuforuIntermediateuAccounting,uEighteenthuEdition
10. Theuobjectiveuofufinancialureportinguisutoureportutheuplansumadeubyuaucompanyutouimproveutheu
productivityuofuitsuemployees.
Ans:u F,u LO:u 1,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuPreparation,uIFRS:uNone
11. Au soundlyu developedu conceptualu frameworku enablesu theu FASBu tou issueu moreu usefulu andu
consistentupronouncementsuoverutime.
Ans:u T,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
12. Auconceptualuframeworkuisuaucoherentusystemuofuconceptsuthatuflowufromuanuobjective.
Ans:u T,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
13. Theu firstu levelu ofu theu conceptualu frameworku identifiesu theu recognition,u measurement,u andu
disclosureuconceptsuuseduinuestablishinguaccountingustandards.
Ans:u F,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
14. Theuobjectiveuofufinancialureportinguservesuasutheufoundationuofutheuconceptualuframework.
Ans:u T,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
15. Usersuofufinancialustatementsuareuassumedutouneedunouknowledgeuofubusinessuandufinancialu
accountingumattersutouunderstandutheuinformationucontaineduinufinancialustatements.
Ans:u F,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
16. Relevanceu andu faithfulu representationu areu theu twou fundamentalu qualitiesu thatu makeua
ccountinguinformationuusefuluforudecision-making.
Ans:u T,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
17. Theuideauofuconsistencyudoesunotumeanuthatucompaniesucannotuswitchufromuoneuaccountingu
methodutouanother.
Ans:uT,uLO:u2,uBloom:uC,uDifficulty:uModerate,uMin:u1,uAACSB:uKnowledge,uAICPAuBC:uNone,uAICPAuAC:uReporting,uAICPAuPC:uNone,uIMA:uReporting
u&u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
18. Timelinessuanduneutralityuareutwouingredientsuofurelevance.
Ans:u F,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
19. Verifiabilityuandupredictiveuvalueuareutwouingredientsuofufaithfulurepresentation.
Ans:u F,u LO:u 2,u Bloom:u K,u Difficulty:u Easy,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Reporting,u AICPAu PC:u None,u IMA:u Reportin
gu &u Control:uFinancialuStatementuAnalysis,uIFRS:uNone
20. Revenues,ugains,uandudistributionsutouownersualluincreaseuequity.
Ans:u F,u LO:u 2,u Bloom:u C,u Difficulty:u Moderate,u Min:u 1,u AACSB:u Knowledge,u AICPAu BC:u None,u AICPAu AC:u Measurementu Analysisu andu Interpretati
on,u AICPAuPC:uNone,uIMA:uReportingu&uControl:uFinancialuStatementuAnalysis,uIFRS:uNone
21. Comprehensiveu incomeu includesu allu changesu inu equityu duringu au periodu exceptu thoseu
resultingufromuinvestmentsubyuownersuandudistributionsutouowners.
Ans:uT,uLO:u2,uBloom:uK,uDifficulty:uEasy,uMin:u1,uAACSB:uKnowledge,uAICPAuBC:uNone,uAICPAuAC:uMeasurementuAnalysisuanduInterpretation,uAIC
PAu PC:uNone,uIMA:uReportingu&uControl:uFinancialuStatementuAnalysis,uIFRS:uNone
