Intermediate Financial Accounting

CHAPTER 1

FINANCIAL ACCOUNTING AND

ACCOUNTING STANDARDS

IFRS questions are available at the end of this chapter.

TRUE-FALSE—Conceptual

Answer No. Description

F 1. Definition of financial accounting.

T 2. Purpose of financial statements.

T 3. Definition of financial accounting.

T 4. Capital allocation process.

F 5. Objective of financial reporting.

T 6. Decision-Usefulness approach.

T 7. Users of financial statements.

F 8. Committee on Accounting Procedure.

F 9. Passage of FASB standards.

T 10. Financial Accounting Concepts.

T 11. Creation of Accounting Principles Board.

F 12. FASB Codification.

T 13. Code of Professional Conduct.

F 14. GAAP and political action.

T 15. Public Company Accounting Oversight Board.

T 16. Expectations gap.

F 17. Financial reports.

F 18. Fair value information.

F 19. International Financial Reporting Standards.

F 20. Ethical issues.

Multiple Choice—Conceptual

Answer No. Description

a 21. Financial accounting.

d 22. Users of financial reports.

d 23. Identify the major financial statements.

a 24. Financial reporting entity.

d 25. Differences between financial and managerial accounting.

b 26. Financial reporting communication.

b 27. Managerial accounting.

a 28. Capital allocation process.

d 29. Efficient use of resources.

d 30. Capital allocation process.

c 31. Financial statement information.

c 32. Accounting profession challenge.

c 33. Financial reporting objective.

d 34. Financial statements primary users.

c 35. Investor’s decision making.

Multiple Choice—Conceptual (cont.)

Answer No. Description

b 36. Accrual accounting.

c 37. Objective of financial reporting perspective.

c 38. Meaning of “generally accepted.”

b 39. Common set of standards and procedures.

a 40. Limitation of general purpose financial statements.

c 41. Securities and Exchange Commission and accounting standard setting.

d 42. Due process in FASB standard...