Question 1

Currently, both U.S.GAAP and the International Financial Reporting Standards are acceptable for international use.

Accepted Answer

A) True 
 B)False

Question 2

The SEC relies on the AICPA and FASB to regulate the accounting profession and develop and enforce accounting standards.

Accepted Answer

A) True 
 B)False

Question 3

Financial Accounting Concepts set forth fundamental objectives and concepts that are used in developing future standards of financial accounting and reporting.

Accepted Answer

A) True 
 B)False

Question 4

Financial statements are the principal means through which financial information is communicated to those outside an enterprise.

Accepted Answer

A) True 
 B)False

Question 5

Accounting standards are now less likely to require the recording or disclosure of fair value information due to its inherent subjectivity.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a publication of the FASB?

Accepted Answer

A)  Statements of Financial Accounting Concepts
B)  Accounting Research Bulletins
C)  Interpretations
D)  Technical Bulletins

Question 7

Financial statements in the early 2000s provide information related to

Accepted Answer

A)  non-financial measurements.
B)  forward-looking data.
C)  hard assets (inventory and plant assets) .
D)  none of these.

Question 8

Ethical issues in financial accounting are governed by the AICPA.

Accepted Answer

A) True 
 B)False

Question 9

The financial statements most frequently provided include all of the following except the

Accepted Answer

A)  balance sheet.
B)  income statement.
C)  statement of cash flows.
D)  statement of retained earnings.

Question 10

Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organiza-tion's operations.

Accepted Answer

A) True 
 B)False

Question 11

Users of financial accounting statements have both coinciding and conflicting needs for information of various types.

Accepted Answer

A) True 
 B)False

Question 12

Accrual accounting is used because

Accepted Answer

A)  cash flows are considered less important.
B)  it provides a better indication of ability to generate cash flows than the cash basis.
C)  it recognizes revenues when cash is received and expenses when cash is paid.
D)  none of the above.

Question 13

The AICPA's Code of Professional Conduct requires that members prepare financial statements in accordance with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 14

Members of the Financial Accounting Standards Board are

Accepted Answer

A)  employed by the American Institute of Certified Public Accountants (AICP
A)  .
B)  part-time employees.
C)  required to hold a CPA certificate.
D)  independent of any other organization.

Question 15

The purpose of Statements of Financial Accounting Concepts is to

Accepted Answer

A)  establish GAAP.
B)  modify or extend the existing FASB Standards Statement.
C)  form a conceptual framework for solving existing and emerging problems.
D)  determine the need for FASB involvement in an emerging issue.

Question 16

Some generally accepted accounting principles have simply been accepted as appropriate because of their universal application rather than due to the action of an authoritative accounting rule-making body.

Accepted Answer

A) True 
 B)False

Question 17

The Financial Accounting Standards Board

Accepted Answer

A)  has issued a series of pronouncements entitled Statements on Auditing Standards.
B)  was the forerunner of the current Accounting Principles Board.
C)  is the arm of the Securities and Exchange Commission responsible for setting financial accounting standards.
D)  is appointed by the Financial Accounting Foundation.

Question 18

Which of the following is not a part of generally accepted accounting principles?

Accepted Answer

A)  FASB Interpretations
B)  CAP Accounting Research Bulletins
C)  APB Opinions
D)  All of these are part of generally accepted accounting principles.

Question 19

While objectives for financial reporting exist on an informal basis, no formal objectives have been adopted.

Accepted Answer

A) True 
 B)False

Question 20

The major distinction between the Financial Accounting Standards Board (FASB)  and its predecessor, the Accounting Principles Board (APB) , is

Accepted Answer

A)  the FASB issues exposure drafts of proposed standards.
B)  all members of the FASB are fully remunerated, serve full time, and are independent of any companies or institutions.
C)  all members of the FASB possess extensive experience in financial reporting.
D)  a majority of the members of the FASB are CPAs drawn from public practice.

Exam 1: Financial Accounting and Accounting Standards

The AICPA's Code of Professional Conduct requires that members prepare financial statements in accordance with generally accepted accounting principles.

Correct AnswerverifiedShow Answer

The purpose of Statements of Financial Accounting Concepts is to

Correct AnswerverifiedShow Answer

Financial statements are the principal means through which financial information is communicated to those outside an enterprise.

Correct AnswerverifiedShow Answer

Which of the following is not a part of generally accepted accounting principles?

Correct AnswerverifiedShow Answer

Financial Accounting Concepts set forth fundamental objectives and concepts that are used in developing future standards of financial accounting and reporting.

Correct AnswerverifiedShow Answer

The Financial Accounting Standards Board

Correct AnswerverifiedShow Answer

Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organiza-tion's operations.

Correct AnswerverifiedShow Answer

Members of the Financial Accounting Standards Board are

Correct AnswerverifiedShow Answer

Accounting standards are now less likely to require the recording or disclosure of fair value information due to its inherent subjectivity.

Correct AnswerverifiedShow Answer

Some generally accepted accounting principles have simply been accepted as appropriate because of their universal application rather than due to the action of an authoritative accounting rule-making body.

Correct AnswerverifiedShow Answer

While objectives for financial reporting exist on an informal basis, no formal objectives have been adopted.

Correct AnswerverifiedShow Answer

Currently, both U.S.GAAP and the International Financial Reporting Standards are acceptable for international use.

Correct AnswerverifiedShow Answer

The major distinction between the Financial Accounting Standards Board (FASB) and its predecessor, the Accounting Principles Board (APB) , is

Correct AnswerverifiedShow Answer

Financial statements in the early 2000s provide information related to

Correct AnswerverifiedShow Answer

Which of the following is not a publication of the FASB?

Correct AnswerverifiedShow Answer

Users of financial accounting statements have both coinciding and conflicting needs for information of various types.

Correct AnswerverifiedShow Answer

Ethical issues in financial accounting are governed by the AICPA.

Correct AnswerverifiedShow Answer

The financial statements most frequently provided include all of the following except the

Correct AnswerverifiedShow Answer

The SEC relies on the AICPA and FASB to regulate the accounting profession and develop and enforce accounting standards.

Correct AnswerverifiedShow Answer

Accrual accounting is used because

Correct AnswerverifiedShow Answer

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