Question 1

The two major standard-setting organizations in the world are

Accepted Answer

A)   Financial Accounting Standards Board (FAS
B)   and the International Organization of Securities Commission (IOSCO) .
B)   Financial Accounting Standards Board (FAS
B)   and the International Accounting Standards Board (IAS
B)  .
C)   The International Accounting Standards Board (IAS
B)   and International Organization of Securities Commission (IOSCO) .
D)   The International Accounting Standards Board (IAS
B)   and the Standards Advisory Council (SA
C)  .

Question 2

The International Accounting Standards Board (IASB)  follows specific steps in developing International Financial Reporting Standards (IFRS) . Place the following steps in the correct order:
1)  Research and analysis conducted; preliminary views of pros and cons issued.
2)  Topics identified and placed on the agenda.
3)  Board evaluates responses, final standard issued.
4)  Public hearing on proposed standard
5)  Board evaluates research, issues exposure draft.

Accepted Answer

A)   1, 2, 3, 4, 5
B)   2, 1, 4, 5, 3
C)   1, 2, 5, 4, 3
D)   1, 2, 5, 3, 4

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

International Accounting Standards are no longer considered applicable because they have been replaced by International Financial Reporting Standards.

Accepted Answer

A) True 
 B)False

Question 5

As part of the objective of general-purpose financial reporting, there is an emphasis on "assessing cash flow prospects." Under International Financial Reporting Standards (IFRS)  this is interpreted to mean:

Accepted Answer

A)   Cash basis accounting is preferred over accrual based accounting.
B)   Information about the financial effects of cash receipts and cash payments is generally considered the best indicator of a company's present and continuing ability to generate favorable cash flows.
C)   Over the long run, trends in revenues and expenses are generally more meaningful than trends in cash receipts and disbursements.
D)   All of the choices are correct regarding "assessing cash flow prospects" under IFRS.

Question 6

The international financial reporting environment includes challenges in financial reporting including all of the following except:

Accepted Answer

A)   Political environment.
B)   Expectations gap.
C)   Decision-usefulness.
D)   Ethics.

Question 7

An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

Accepted Answer

A) True 
 B)False

Question 8

The purpose of the International Accounting Standards Board is to

Accepted Answer

A)   issue enforceable standards which regulate the financial accounting and reporting of multinational corporations.
B)   develop a uniform currency in which the financial transactions of companies through-out the world would be measured.
C)   develop a single set of high-quality IFRS.
D)   arbitrate accounting disputes between auditors and international companies.

Question 9

Financial statements in the early 2000s provided information related to

Accepted Answer

A)   nonfinancial measurements.
B)   forward-looking data.
C)   hard assets (inventory and plant assets) .
D)   None of these answers are correct.

Question 10

A unanimous vote by all Board members is needed to issue a new International Financial Reporting Standard (IFRS).

Accepted Answer

A) True 
 B)False

Question 11

International Financial Reporting Standards preceded International Accounting Standards.

Accepted Answer

A) True 
 B)False

Question 12

Interpretations issued by the IFRS Interpretations Committee are more authoritative than IASB Standards and Interpretations.

Accepted Answer

A) True 
 B)False

Question 13

General-purpose financial statements are the product of

Accepted Answer

A)   financial accounting.
B)   managerial accounting.
C)   both financial and managerial accounting.
D)   neither financial nor managerial accounting.

Question 14

The IASB relies primarily on the International Organization of Securities Commissions (IOSCO) for regulation and enforcement of its standards.

Accepted Answer

A) True 
 B)False

Question 15

Users of financial reports include all of the following except:

Accepted Answer

A)   creditors.
B)   government agencies.
C)   unions.
D)   All of these are users.

Question 16

Users of the financial information provided by a company use that information to make capital allocation decisions.

Accepted Answer

A) True 
 B)False

Question 17

What is the major objective of financial reporting?

Accepted Answer

A)   Provide information that is useful to management in making decisions.
B)   Provide information that clearly portray nonfinancial transactions.
C)   Provide information that is useful to present and potential equity investors, lenders, and other creditors in making decisions..
D)   Provide information that excludes claims to the resources.

Question 18

What is "expectation gap"?

Accepted Answer

A)   The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do.
B)   The difference between what the public thinks the accountant should do and what Congress says the accountant should do.
C)   The difference between what the public thinks the accountant should do and what the accountant thinks they can do.
D)   The difference between what the accountant should do and what the Courts say the accountant should be doing.

Question 19

One element of the objective of financial reporting is to provide

Accepted Answer

A)   information about the investors in the business entity.
B)   information about the liquidation values of the resources held by the enterprise.
C)   information that is useful in assessing cash flow prospects.
D)   information that will attract new investors.

Question 20

How does accounting help the capital allocation process attract investment capital?

Accepted Answer

A)   Provides timely, relevant information.
B)   Encourages innovation.
C)   Promotes productivity.
D)   Provides timely, relevant information and encourages innovation.

Exam 1: Financial Reporting and Accounting Standards

General-purpose financial statements are the product of

Correct Answer
verified

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

Correct Answer
verified

What is "expectation gap"?

Correct Answer
verified

A unanimous vote by all Board members is needed to issue a new International Financial Reporting Standard (IFRS).

Correct Answer
verified

Users of the financial information provided by a company use that information to make capital allocation decisions.

Correct Answer
verified

International Accounting Standards are no longer considered applicable because they have been replaced by International Financial Reporting Standards.

Correct Answer
verified

The two major standard-setting organizations in the world are

Correct Answer
verified

One element of the objective of financial reporting is to provide

Correct Answer
verified

What is the major objective of financial reporting?

Correct Answer
verified

How does accounting help the capital allocation process attract investment capital?

Correct Answer
verified

The purpose of the International Accounting Standards Board is to

Correct Answer
verified

Interpretations issued by the IFRS Interpretations Committee are more authoritative than IASB Standards and Interpretations.

Correct Answer
verified

As part of the objective of general-purpose financial reporting, there is an emphasis on "assessing cash flow prospects." Under International Financial Reporting Standards (IFRS) this is interpreted to mean:

Correct Answer
verified

The IASB relies primarily on the International Organization of Securities Commissions (IOSCO) for regulation and enforcement of its standards.

Correct Answer
verified

International Financial Reporting Standards preceded International Accounting Standards.

Correct Answer
verified

Financial statements in the early 2000s provided information related to

Correct Answer
verified

An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

Correct Answer
verified

Users of financial reports include all of the following except:

Correct Answer
verified

Correct Answer
verified

The international financial reporting environment includes challenges in financial reporting including all of the following except:

Correct Answer
verified

Exam 1: Financial Reporting and Accounting Standards

General-purpose financial statements are the product of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is "expectation gap"?

Correct AnswerverifiedShow Answer

A unanimous vote by all Board members is needed to issue a new International Financial Reporting Standard (IFRS).

Correct AnswerverifiedShow Answer

Users of the financial information provided by a company use that information to make capital allocation decisions.

Correct AnswerverifiedShow Answer

International Accounting Standards are no longer considered applicable because they have been replaced by International Financial Reporting Standards.

Correct AnswerverifiedShow Answer

The two major standard-setting organizations in the world are

Correct AnswerverifiedShow Answer

One element of the objective of financial reporting is to provide

Correct AnswerverifiedShow Answer

What is the major objective of financial reporting?

Correct AnswerverifiedShow Answer

How does accounting help the capital allocation process attract investment capital?

Correct AnswerverifiedShow Answer

The purpose of the International Accounting Standards Board is to

Correct AnswerverifiedShow Answer

Interpretations issued by the IFRS Interpretations Committee are more authoritative than IASB Standards and Interpretations.

Correct AnswerverifiedShow Answer

As part of the objective of general-purpose financial reporting, there is an emphasis on "assessing cash flow prospects." Under International Financial Reporting Standards (IFRS) this is interpreted to mean:

Correct AnswerverifiedShow Answer

The IASB relies primarily on the International Organization of Securities Commissions (IOSCO) for regulation and enforcement of its standards.

Correct AnswerverifiedShow Answer

International Financial Reporting Standards preceded International Accounting Standards.

Correct AnswerverifiedShow Answer

Financial statements in the early 2000s provided information related to

Correct AnswerverifiedShow Answer

An effective process of capital allocation promotes productivity and provides an efficient market for buying and selling securities and obtaining and granting credit.

Correct AnswerverifiedShow Answer

Users of financial reports include all of the following except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The international financial reporting environment includes challenges in financial reporting including all of the following except:

Correct AnswerverifiedShow Answer

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