Question 1

Documents issued by the FASB include all of the following except

Accepted Answer

A)   Statements of Financial Accounting Standards.
B)   Interpretations of Statements of Financial Accounting Standards.
C)   Statements of Financial Accounting Concepts.
D)   Financial Reporting Releases.E) A) and C)
F) A) and B)

Question 2

The Financial Accounting Foundation oversees the

Accepted Answer

A)   operations of the AICPA.
B)   operations of the FASB.
C)   AAA.
D)   financial reporting arm of the SEC.E) A) and C)
F) None of the above

Question 3

Accounting for inventories by applying the lower-of-cost-or-market is an example of the application of

Accepted Answer

A)   conservatism.
B)   comparability.
C)   consistency.
D)   materiality.E) A) and D)
F) A) and C)

Question 4

The primary current source of generally accepted accounting principles for governmental operations is the

Accepted Answer

A)   Financial Accounting Standards Board.
B)   Securities and Exchange Commission.
C)   Governmental Accounting Standards Board.
D)   Government Accounting Office.E) B) and D)
F) A) and C)

Question 5

The primary measurement basis currently used to value assets in external financial statements of an enterprise is the

Accepted Answer

A)   current market price if the assets currently held by an enterprise were sold on the open market.
B)   current market price if the assets held by an enterprise were purchased on the open market.
C)   present value of the cash flows the assets are expected to generate over their remaining useful lives.
D)   market price of the assets held by an enterprise at the date the assets were acquired (although some assets may be valued at their current selling price or net realizable value) .E) All of the above
F) A) and D)

Question 6

A conceptual framework of accounting should

Accepted Answer

A)   lead to uniformity of financial statements among companies within the same industry.
B)   eliminate alternative accounting principles and methods.
C)   guide the AICPA in developing generally accepted auditing standards.
D)   define the basic objectives, terms, and concepts of accounting.E) C) and D)
F) None of the above

Question 7

In Statement of Financial Accounting Concepts No. 1, "Objectives of Financial Reporting by Business Enterprises," the Financial Accounting Standards Board presents the objectives of financial reporting.
Required:
Identify the three major objectives of financial reporting and explain the interrelationships that exist between these objectives.

Accepted Answer

The three major objectives of financial ...

Question 8

Pronouncements issued by the SEC include

Accepted Answer

A)   Accounting Research Bulletins.
B)   Statements on Accounting Principles.
C)   Financial Accounting Standards.
D)   Financial Reporting Releases.E) B) and C)
F) All of the above

Question 9

As independent (or external)  auditors, CPAs are primarily responsible for

Accepted Answer

A)   preparing financial statements in conformity with GAAP.
B)   certifying the accuracy of financial statements.
C)   expressing an opinion as to the fairness of financial statements.
D)   filing financial statements with the SEC.E) A) and B)
F) All of the above

Question 10

The primary purpose of the Securities and Exchange Commission is to

Accepted Answer

A)   regulate the issuance and trading of securities.
B)   issue accounting and auditing regulations for publicly held companies.
C)   prevent the trading of speculative securities.
D)   enforce generally accepted accounting principles.E) C) and D)
F) A) and B)

Question 11

According to Statement of Financial Accounting Concepts No. 2, neutrality is an ingredient of
$\text { Relevance } \quad \underline{\text { Reliability }}$
$\begin{array}{ll}
\text { A. Yes } \quad\quad& \text { Yes } \
\text { B. Yes } & \text { No } \
\text { C. No } & \text { No } \
\text { D. No } & \text { Yes }
\end{array}$

Accepted Answer

The answer of According to Statement of Financial Accounting Concepts...

Question 12

The financial statements that are prepared for the business are separate and distinct from the owners according to the

Accepted Answer

A)   going-concern assumption.
B)   matching principle.
C)   economic entity assumption.
D)   full disclosure principle.E) All of the above
F) B) and C)

Question 13

Which of the following qualitative characteristics of financial information requires that information not be biased in favor of one group of users to the detriment of others?

Accepted Answer

A)   Relevance
B)   Reliability
C)   Verifiability
D)   NeutralityE) A) and B)
F) None of the above

Question 14

Which of the following is a characteristic of the Financial Accounting Standards Board?

Accepted Answer

A)   The FASB is composed of five members.
B)   FASB members must come from CPA firms.
C)   FASB members are part-time.
D)   FASB members may retain their positions with previous employers.E) A) and D)
F) All of the above

Question 15

Which is the correct historical sequence of accounting rule-making bodies?

Accepted Answer

A)   CAP, FASB, APB
B)   CAP, APB, FASB
C)   FASB, APB, CAP
D)   APB, CAP, FASBE) B) and D)
F) None of the above

Question 16

The normal order followed by the FASB in publishing its standards is

Accepted Answer

A)   statement, discussion memorandum, opinion.
B)   discussion memorandum, interpretation, exposure draft, statement.
C)   exposure draft, discussion memorandum, statement.
D)   discussion memorandum, exposure draft, statement.E) C) and D)
F) A) and D)

Question 17

The Journal of Accountancy is published by the

Accepted Answer

A)   American Accounting Association.
B)   American Institute of Certified Public Accountants.
C)   Financial Executives Institute.
D)   Financial Accounting Standards Board.E) A) and B)
F) A) and C)

Question 18

According to the FASB's conceptual framework, predictive and feedback values are ingredients of
$\text { Relevance } \quad \underline{\text { Reliability }}$
A. $\quad$Yes $\quad$$\quad$$\quad$$\quad$No
B.$\quad$ Yes$\quad$$\quad$$\quad$$\quad$ Yes
C. $\quad$No$\quad$$\quad$$\quad$$\quad$ Yes
D. $\quad$No$\quad$$\quad$$\quad$$\quad$ No

Accepted Answer

The answer of According to the FASB's conceptual framework, predictive...

Question 19

Users require a variety of information about the financial position and performance of a firm in order to make decisions. Users cannot wait until the life of the business is completed. Accordingly, the accounting period assumption requires that financial reports depicting changes in wealth of an enterprise be prepared periodically.
Required:
Explain the relationship between the accounting period assumption and accrual basis accounting.

Accepted Answer

The accounting period assumption states ...

Question 20

Conservatism is best described as selecting an accounting alternative that

Accepted Answer

A)   understates assets and/or net income.
B)   has the least favorable impact on owners' equity.
C)   overstates, as opposed to understates, liabilities.
D)   is least likely to mislead users of financial information.E) A) and B)
F) None of the above

Exam 1: Financial Reporting

Accounting for inventories by applying the lower-of-cost-or-market is an example of the application of

Correct Answer
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Pronouncements issued by the SEC include

Correct Answer
verified

Which is the correct historical sequence of accounting rule-making bodies?

Correct Answer
verified

Correct Answer
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The financial statements that are prepared for the business are separate and distinct from the owners according to the

Correct Answer
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The primary measurement basis currently used to value assets in external financial statements of an enterprise is the

Correct Answer
verified

Which of the following qualitative characteristics of financial information requires that information not be biased in favor of one group of users to the detriment of others?

Correct Answer
verified

Conservatism is best described as selecting an accounting alternative that

Correct Answer
verified

Which of the following is a characteristic of the Financial Accounting Standards Board?

Correct Answer
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The normal order followed by the FASB in publishing its standards is

Correct Answer
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Documents issued by the FASB include all of the following except

Correct Answer
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The primary current source of generally accepted accounting principles for governmental operations is the

Correct Answer
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The Financial Accounting Foundation oversees the

Correct Answer
verified

Correct Answer
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The three major objectives of financial ...
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Correct Answer
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The accounting period assumption states ...
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The Journal of Accountancy is published by the

Correct Answer
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Correct Answer
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The primary purpose of the Securities and Exchange Commission is to

Correct Answer
verified

As independent (or external) auditors, CPAs are primarily responsible for

Correct Answer
verified

A conceptual framework of accounting should

Correct Answer
verified

Exam 1: Financial Reporting

Accounting for inventories by applying the lower-of-cost-or-market is an example of the application of

Correct AnswerverifiedShow Answer

Pronouncements issued by the SEC include

Correct AnswerverifiedShow Answer

Which is the correct historical sequence of accounting rule-making bodies?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The financial statements that are prepared for the business are separate and distinct from the owners according to the

Correct AnswerverifiedShow Answer

The primary measurement basis currently used to value assets in external financial statements of an enterprise is the

Correct AnswerverifiedShow Answer

Which of the following qualitative characteristics of financial information requires that information not be biased in favor of one group of users to the detriment of others?

Correct AnswerverifiedShow Answer

Conservatism is best described as selecting an accounting alternative that

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of the Financial Accounting Standards Board?

Correct AnswerverifiedShow Answer

The normal order followed by the FASB in publishing its standards is

Correct AnswerverifiedShow Answer

Documents issued by the FASB include all of the following except

Correct AnswerverifiedShow Answer

The primary current source of generally accepted accounting principles for governmental operations is the

Correct AnswerverifiedShow Answer

The Financial Accounting Foundation oversees the

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Correct AnswerverifiedThe three major objectives of financial ...View AnswerShow Answer

Correct AnswerverifiedThe accounting period assumption states ...View AnswerShow Answer

The Journal of Accountancy is published by the

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Correct AnswerverifiedShow Answer

The primary purpose of the Securities and Exchange Commission is to

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As independent (or external) auditors, CPAs are primarily responsible for

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A conceptual framework of accounting should

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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The three major objectives of financial ...
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The accounting period assumption states ...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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