91 Test Bank for Intermediate Accounting 13th Edition
Kieso
True-False Questions
Financial Accounting Concepts set forth fundamental objectives and
concepts that are used in developing future standards of financial accounting
and reporting.
1.

True

2.

False

Ethical issues in financial accounting are governed by the AICPA.
1.

True

2.

False

The standard-setting structure used by the International Accounting
Standards Board is very similar to that used by the Financial Accounting
Standards Board.
1.

True

2.

2.

False

The International Accounting Standards Board issues International Financial
Reporting Standards.
1.

True

2.

False

The AICPA’s Code of Professional Conduct requires that members prepare
financial statements in accordance with generally accepted accounting
principles.
1.

True

2.

False

The Securities and Exchange Commission appointed the Committee on
Accounting Procedure.
1.

True


True

2.

False

The AICPA created the Accounting Principles Board in 1959.
1.

True

2.

False

International Financial Reporting Standards preceded International
Accounting Standards.
1.

True

2.

False


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

principles-based standards of U.S. GAAP.
1.

True

2.

False

Users of the financial information provided by a company use that information
to make capital allocation decisions.
1.

True

2.

False


Financial reports in the early 21st century did not provide any information
about a company’s soft assets.
1.

True

2.

False



While objectives for financial reporting exist on an informal basis, no formal
objectives have been adopted.
1.

True

2.

False


Financial accounting is the process of identifying, measuring, analyzing, and
communicating financial information needed by management to plan,
evaluate, and control an organiza-tion's operations.
1.

True

2.

False

iGAAP includes both International Financial Reporting Standards and
International Accounting Standards.
1.

True

2.


3.

c.competition.

4.

d.all of these.

What is a major objective of financial reporting?
1.

a.Provide information that is useful to the Internal Revenue Service in determining the
amount of federal income taxes payable.

2.

b.Provide information that is useful in assessing the amounts and timing of revenue.

3.

c.Provide information that is comprehensible only by sophisticated investors.

4.

d.Provide information that clearly portrays the economic resources of an enterprise.

Financial statements in the early 2000s provide information related to
1.


d.AICPA.


A common set of accounting standards and procedures are called
1.

a.financial accounting standards.

2.

b.generally accepted accounting principles.

3.

c.objectives of financial reporting.

4.

d.statements of financial accounting concepts.

Which of the following statements is not an objective of financial reporting?
1.

a.Provide information that is useful in investment and credit decisions.

2.

b.Provide information about enterprise resources, claims to those resources, and
changes to them.


a.Accounting Principles Board.

2.

b.Committee on Accounting Procedure.


3.

c.Financial Accounting Standards Board.

4.

d.All of the above.

Which organization is responsible for issuing Emerging Issues Task Force
Statements?
1.

a.FASB

2.

b.CAP

3.

c.APB

4.


2.

b.The SEC coordinates with the AICPA in establishing accounting standards.


3.

c.The SEC has a mandate to establish accounting standards for enterprises under its
jurisdiction.

4.

d.The SEC reviews financial statements for compliance.

Accounting principles are "generally accepted" only when
1.

a.an authoritative accounting rule-making body has established it in an official pronouncement.

2.

b.it has been accepted as appropriate because of its universal application.

3.

c.both a and b.

4.


3.

c.each principle is approved by the SEC.

4.

d.practice has become universally accepted over time.


Why was it believed that accounting standards that were issued by the
Financial Accounting Standards Board would carry more weight?
1.

a.Smaller membership.

2.

b.FASB board members are well-paid.

3.

c.FASB board members must be CPAs.

4.

d.Due process.

An effective capital allocation process
1.



Which of the following represents a form of communication through financial
reporting but not through financial statements?
1.

a.Balance sheet.

2.

b.President's letter.


3.

c.Income statement.

4.

d.Notes to financial statements.

All the following are differences between financial and managerial accounting
in how accounting information is used except to
1.

a.plan and control company's operations.

2.

b.decide whether to invest in the company.


a.common set of standards and principles.

2.

b.standards and principles are based federal statutes.

3.

c.acceptance requires an affirmative vote of Certified Public Accountants.

4.

d.practices that become accepted for at least a year by all industry members.


Accrual accounting is used because
1.

a.cash flows are considered less important.

2.

b.it provides a better indication of ability to generate cash flows than the cash basis.

3.

c.it recognizes revenues when cash is received and expenses when cash is paid.

4.



3.

c.General purpose financial statements are assumed to present fairly the company's
financial operations.

4.

d.None of the above.

The passage of a new FASB Standards Statement requires the support of
1.

a.all Board members.


2.

b.three Board members.

3.

c.four Board members.

4.

d.five Board members.

Users of financial reports include all of the following except
1.

d.information that will attract new investors.

How does accounting help the capital allocation process attract investment
capital?
1.

a.Provides timely, relevant information.

2.

b.Encourages innovation.

3.

c.Promotes productivity.

4.

d.a and b above.


What is the purpose of Emerging Issues Task Force?
1.

a.Provide interpretation of existing standards.

2.

b.Provide a consensus on how to account for new and unusual financial transactions.



a.develop a conceptual framework as a frame of reference for the solution of future
problems.

2.

b.lobby the FASB on issues that affect a particular industry.

3.

c.do research on issues that relate to long-term accounting problems.

4.

d.issue statements which reflect a consensus on how to account for new and unusual
financial transactions that need to be resolved quickly.


What is not a source of pressure that may influence the accounting standard
setting process?
1.

a.Congress.

2.

b.Lobbyist.

3.


a.1, 2, 3.

2.

b.1, 3, 2.

3.

c.2, 3, 1.

4.

d.3, 1, 2.


Which of these statements regarding the iGAAP and U.S. GAAP is correct?
1.

a.U.S. GAAP is considered to be "principles-based" and more detailed than iGAAP.

2.

b.U.S. GAAP is considered to be "rules-based" and less detailed than iGAAP.

3.

c.iGAAP is considered to be "principles-based" and less detailed than U.S. GAAP

4.



b.Securities and Exchange Commission.

3.

c.Financial Accounting Standards Board.

4.

d.All of these have published accounting standards.


Rule 203 of the Code of Professional Conduct address:
1.

a.ethical requirements.

2.

b.financial statements should be based on generally accepted accounting principles.

3.

c.advertising to obtained clients.

4.

d.auditing financial statements.

The IASB's standard-setting structure includes all of the following except

Which of the following organizations has not been instrumental in the
development of financial accounting standards in the United States?
1.

a.AICPA

2.

b.FASB

3.

c.IASB


4.

d.SEC.

Which of the following is not a part of generally accepted accounting
principles?
1.

a.FASB Interpretations

2.

b.CAP Accounting Research Bulletins

3.


2.

b.Widely recognized industry practices.

3.

c.Articles published in CPA journals.

4.

d.AICPA Accounting Interpretations.


Which of the following publications does not qualify as a statement of
generally accepted accounting principles?
1.

a.Statements of financial standards issued by the FASB

2.

b.Accounting interpretations issued by the FASB

3.

c.APB Opinions

4.



3.

c.The difference between what the public thinks the accountant is doing and what the
accountant thinks they can do.

4.

d.The difference between what the accountant is doing and what the Courts say the
accountant should be doing.


The American Institute of Certified Public Accountants (AICPA) continues to
be involved in all of the following except
1.

a.developing and enforcing professional ethics.

2.

b.developing auditing standards.

3.

c.providing professional education programs.

4.

d.all of the above.


c.Provide interpretive guidance.

4.

d.Provide timely guidance on select issues.

Which of the following is not a publication of the FASB?
1.

a.Statements of Financial Accounting Concepts

2.

b.Accounting Research Bulletins


3.

c.Interpretations

4.

d.Technical Bulletins.

What is not a reason that accounting standards may differ across countries?
1.

a.Governments.

2.

principles is the
1.

a.AICPA.

2.

b.SEC.

3.

c.APB.

4.

d.FASB.


Which of the following pronouncements were issued by the Accounting
Principles Board?
1.

a.Accounting Research Bulletins

2.

b. Opinions

3.


application.

2.

b.are influenced by pronouncements of the SEC and IRS.

3.

c.change over time as the nature of the business environment changes.

4.

d.all of these.


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
1.

a.FASB.

2.

b.AICPA.

3.

c.SEC.

4.

3.

c.FASB.

4.

d.SEC.

The Financial Accounting Standards Board (FASB) was proposed by the
1.

a.American Institute of Certified Public Accountants.

2.

b.Accounting Principles Board.


3.

c.Study Group on the Objectives of Financial Statements.

4.

d.Special Study Group on establishment of Accounting Principles (Wheat Committee).

The Financial Accounting Standards Board
1.

a.has issued a series of pronouncements entitled Statements on Auditing Standards.


Which of the following is an ethical concern of accountants?
1.

a.Earnings manipulation.

2.

b.Conservative accounting.

3.

c.Industry practices.

4.

d.None of the above.