General-purpose financial statements are the product of
22. Users of financial reports include all of the following except
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b. government agencies.
all Af these are users
23. The financial statements most frequently provided include all of the following except
a. balance sheet.
b. income statement.
c. statement of cash flows.
d. statement of retained earnings.
The Statement of retained earnings
24. The information provided by financial reporting pertains to
Individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers
30. An effective capital allocation process
Promotes productivity encourages innovation and provides an efficient market for buying and selling securities.
32. Which of the following is not a major challenge facing the accounting profession?
c Accounting for hard assets
33. What is the objective of financial reporting?
c to provide Information about the reporting entity that is useful to present and potential equity investors, lenders and other creditors
34. Primary users for general-purpose financial statements include
d) Creditors and investors
35. When making decisions, investors are interested in assessing
c) the company’s ability to generate net cash inflows and the managers’ ability to protect and enhance the capital providers’ investments
36. Accrual accounting is used because
b. it provides a better indication of ability to generate cash flows than the cash basis.
37. Which perspective is adopted as part of the objective of general-purpose financial reporting?
c Entity perspective
39. A common set of accounting standards and procedures are called
b General Accounting Principles (GAAP)
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41. What is the relationship between the Securities and Exchange Commission and accounting standard setting in the United States?
c The SEC has the mandate to establish accounting standards for enterprises under its jurisdiction.
42. What is due process in the context of standard setting at the FASB?
a. FASB operates in full view of the public.
b. Public hearings are held on proposed accounting standards.
c. Interested parties can make their views known.
d. All of the above.
d. all the above
43. Which of the following organizations has been responsible for setting U.S. accounting standards?
Accounting Principles Board.
Committee on Accounting Procedure.
Financial Accounting Standards B
44. Why did the AICPA create the Accounting Principles Board?
The previous standard setting organization did not provide a structured set of accounting principles.
46. A characteristic of generally accepted accounting principles (GAAP) include the following:
a common set of standards and principles
47. Characteristics of generally accepted accounting principles include all of the following except
a. authoritative accounting the rule-making body established a principle of reporting.
b. standards are considered useful by the profession.
c. each principle is approved by the SEC.
d. Practice has become universally accepted over time.
Execpt that each principle is approved by the SEC.
49. The passage of a new FASB Standards Statement requires the support of
c four Board members.
51. Which organization is responsible for issuing Emerging Issues Task Force Statements?
52. The role of the Securities and Exchange Commission (SEC) in the formulation of accounting principles can be best described as
c sometimes primary and sometimes secondary.
53. The body that has the power to prescribe the accounting practices and standards to be employed by companies that fall under its jurisdiction is the