Question 1

With respect to the financial statements, what is the value of an audit?

Accepted Answer

Outside auditors add credibility to fina...

Question 2

Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow.

Accepted Answer

A) True 
 B)False

Question 3

Of the following, the most important objective for financial reporting is to provide information useful for:

Accepted Answer

A)  Making decisions.
B)  Determining taxable income.
C)  Providing accountability.
D)  Increasing future profits.E) A) and B)
F) A) and C)

Question 4

The funding of the standard-setting bodies that promulgate IFRS is as independent as that underlying U.S. GAAP.

Accepted Answer

A) True 
 B)False

Question 5

The FASB's framework for measuring fair value doesn't change the situations in which fair value is used under current GAAP.

Accepted Answer

A) True 
 B)False

Question 6

Four different competent accountants independently agree on the amount and method of reporting an economic event. The concept demonstrated is:

Accepted Answer

A)  Reliability.
B)  Comparability.
C)  Completeness.
D)  Verifiability.E) None of the above
F) B) and D)

Question 7

Enhancing qualitative characteristics of accounting information include:

Accepted Answer

A)  Relevance and comparability.
B)  Comparability and timeliness.
C)  Understandability and relevance.
D)  Neutrality and consistency.E) A) and B)
F) C) and D)

Question 8

The enhancing qualitative characteristic of understandability means that information should be understood by:

Accepted Answer

A)  Those who are experts in the interpretation of financial information.
B)  Those who have a reasonable understanding of business and economic activities.
C)  Financial analysts.
D)  CPAs.E) A) and B)
F) A) and C)

Question 9

In the United States the conceptual framework indicates GAAP when a more specific accounting standard does not apply.

Accepted Answer

A) True 
 B)False

Question 10

What is the EITF and what is its purpose?

Accepted Answer

The Emerging Issues Task Force (EITF) ac...

Question 11

What provisions did the Public Company Accounting Reform and Investor Protection (Sarbanes-Oxley) Act of 2002 make for performance of nonaudit services by an audit firm?

Accepted Answer

The law makes it unlawful for the audito...

Question 12

Revenues are inflows or other enhancements of assets or settlements of liabilities from activities that constitute the entity's ongoing operations.

Accepted Answer

A) True 
 B)False

Question 13

Gains are:

Accepted Answer

A)  Inflows from selling a product or service to a customer.
B)  Increases in equity resulting from transfers of assets to the company from owners.
C)  Increases in equity from peripheral transactions of an entity.
D)  None of the above is correct.E) B) and C)
F) B) and D)

Question 14

The revenue/expense approach emphasizes:

Accepted Answer

A)  Recognition of revenues (typically applying the realization principle) .
B)  Recognition of expenses (typically applying the matching principle) .
C)  The income statement.
D)  All of the above are correct.E) B) and D)
F) B) and C)

Question 15

Change in equity from nonowner sources is:

Accepted Answer

A)  Comprehensive income.
B)  Revenues.
C)  Expenses.
D)  Gains and losses.E) B) and C)
F) A) and C)

Exam 1: Environment and Theoretical Structure of Financial Accounting

Of the following, the most important objective for financial reporting is to provide information useful for:

Correct Answer
verified

Change in equity from nonowner sources is:

Correct Answer
verified

Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow.

Correct Answer
verified

The revenue/expense approach emphasizes:

Correct Answer
verified

Revenues are inflows or other enhancements of assets or settlements of liabilities from activities that constitute the entity's ongoing operations.

Correct Answer
verified

The funding of the standard-setting bodies that promulgate IFRS is as independent as that underlying U.S. GAAP.

Correct Answer
verified

Enhancing qualitative characteristics of accounting information include:

Correct Answer
verified

Four different competent accountants independently agree on the amount and method of reporting an economic event. The concept demonstrated is:

Correct Answer
verified

What is the EITF and what is its purpose?

Correct Answer
verified
The Emerging Issues Task Force (EITF) ac...
View Answer

With respect to the financial statements, what is the value of an audit?

Correct Answer
verified
Outside auditors add credibility to fina...
View Answer

What provisions did the Public Company Accounting Reform and Investor Protection (Sarbanes-Oxley) Act of 2002 make for performance of nonaudit services by an audit firm?

Correct Answer
verified
The law makes it unlawful for the audito...
View Answer

In the United States the conceptual framework indicates GAAP when a more specific accounting standard does not apply.

Correct Answer
verified

The FASB's framework for measuring fair value doesn't change the situations in which fair value is used under current GAAP.

Correct Answer
verified

The enhancing qualitative characteristic of understandability means that information should be understood by:

Correct Answer
verified

Gains are:

Correct Answer
verified

Exam 1: Environment and Theoretical Structure of Financial Accounting

Of the following, the most important objective for financial reporting is to provide information useful for:

Correct AnswerverifiedShow Answer

Change in equity from nonowner sources is:

Correct AnswerverifiedShow Answer

Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow.

Correct AnswerverifiedShow Answer

The revenue/expense approach emphasizes:

Correct AnswerverifiedShow Answer

Revenues are inflows or other enhancements of assets or settlements of liabilities from activities that constitute the entity's ongoing operations.

Correct AnswerverifiedShow Answer

The funding of the standard-setting bodies that promulgate IFRS is as independent as that underlying U.S. GAAP.

Correct AnswerverifiedShow Answer

Enhancing qualitative characteristics of accounting information include:

Correct AnswerverifiedShow Answer

Four different competent accountants independently agree on the amount and method of reporting an economic event. The concept demonstrated is:

Correct AnswerverifiedShow Answer

What is the EITF and what is its purpose?

Correct AnswerverifiedThe Emerging Issues Task Force (EITF) ac...View AnswerShow Answer

With respect to the financial statements, what is the value of an audit?

Correct AnswerverifiedOutside auditors add credibility to fina...View AnswerShow Answer

What provisions did the Public Company Accounting Reform and Investor Protection (Sarbanes-Oxley) Act of 2002 make for performance of nonaudit services by an audit firm?

Correct AnswerverifiedThe law makes it unlawful for the audito...View AnswerShow Answer

In the United States the conceptual framework indicates GAAP when a more specific accounting standard does not apply.

Correct AnswerverifiedShow Answer

The FASB's framework for measuring fair value doesn't change the situations in which fair value is used under current GAAP.

Correct AnswerverifiedShow Answer

The enhancing qualitative characteristic of understandability means that information should be understood by:

Correct AnswerverifiedShow Answer

Gains are:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The Emerging Issues Task Force (EITF) ac...
View Answer

Correct Answer
verified
Outside auditors add credibility to fina...
View Answer

Correct Answer
verified
The law makes it unlawful for the audito...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified