1. Which of the following is an internal user of a company's financial information? a company treasurer b. stockholder in the company c. bank lending to the company d Union 2. Which characteristic applies more to financial accounting than to managerial accounting? a primarily segmented reports b. primarily quantitative information c. internal decision focus d. statement format determined by company information needs 3. The organization that presently has the primary responsibility to establish generally accepted accounting principles that are applicable to the financial statements of entities in the private sector of the U.S. is the a. Accounting Principles Board b. Securities and Exchange Commission c. Financial Accounting Standards Board d. Committee on Accounting Procedure + 4. Which pronouncements are not issued by the FASB? a. Statements of Financial Accounting Concepts b. Technical Bulletins c. Opinions d. Interpretations 5. A primary focus of financial reporting about a company's performance during an accounting period is information related to the company's: a. Balance Sheet b. Income Statement c. Comprehensive Income d. Cash Flows 6. Which qualitative characteristic is an ingredient of relevance? a. Verifiability b. Timeliness c. Neutrality d representational faithfulness 7. Which of the following qualitative characteristics may have to be sacrificed in order to achieve timeliness? a. Relevance b. Reliability e. Comparability d. predictive value 8. Which of the following are considered secondary characteristics of accounting information? a verifiability and feedback value b. predictive value and timeliness e comparability and consistency d. representational faithfulness and neutrality 9. The four major financial statements of a corporation consist of the income statement, balance sheet, statement of cash flows and statement of changes in stockholders' equity b. balance sheet, statement of cash flows, statement of retained earnings, and income statement c. income statement, statement of cash flows, statement of owners' equity, and balance sheet d. statement of cash flows, balance sheet, income statement, and statement of capital equity 10. All of the following items are classified as accounting assumptions and conventions except for a. going concern b. Timeliness c. monetary unit d. Entity 11. Under current GAAP, most resources of a business entity are to be valued in its financial statements at a value that is most relevant to the needs of users of the financial statements b. historical cost c. the current cost of replacing the resource d. current appraisal values 12. a. FASB suggests that revenues are considered to be earned: at the point of sale. b. throughout the earnings process when the company is entitled to its benefits. d when cash is received. c. 13. The principle of revenue recognition results in: a. recording revenue in the income statement, b. recording realized revenue when it is earned. c. measuring relevant and reliable information whenever a transaction has occurred. d. assuring the existence of all amounts recorded as net income. 14. Of the following reporting assumptions or reporting principles, the one most widely criticized is the a consistency principle b. full-disclosure principle c. entity assumption d. historical cost principle 15. Expenses are recognized and matched against revenues on the basis of three principles. Which is not one of these principles? a immediate recognition b. associating cash flows c. systematic and rational allocation d. associating cause and effect Below is a list of the qualitative characteristics identified in FASB Statement of Financial Accounting Concepts No. 2. Following the list is a series of descriptive phrases. c. a feedback value b. Relevance decision usefulness d. Reliability e. Comparability f. predictive value 8 h. i. j. k. verifiability consistency representational faithfulness timeliness neutrality 1. When information can make a difference in a decision 2. Making information available when it is needed. 3 When accounting policies and procedures are unchanged from period to period. When information is verifiable and neutral. 4. 5. Occurs when the measurement results can be duplicated. 6. The overall qualitative characteristic accounting information should possess. 7. When information enables decision makers to confirm prior expectations. 8. When accounting information is reported the same way by different companies. Publications and Organizations Significant accounting publications are listed below (1-9). Sources or sponsors of accounting publications are identified next by alphabetical character (a-t), Match the publications with their sources. Publications 1. Accounting Research Bulletins (1953-1959) 2. Statements on Auditing Standards 3. Journal of Accountancy 4. Emerging Issues Task Force Statements 5. Opinions (1962-1973) 6. Technical Bulletins 7. Statements of Financial Accounting Standards 8. Statements of Financial Accounting Concepts 9. Statements of Position (SOPs) Sources/Sponsors a. Auditing Standards Board b. Accounting Standards Executive Committee c. The AICPA d. Committee on Accounting Procedure e Accounting Principles Board f. Financial Accounting Standards Board 1. Which of the following is an internal user of a company's financial information? a company treasurer b. stockholder in the company c. bank lending to the company d Union 2. Which characteristic applies more to financial accounting than to managerial accounting? a primarily segmented reports b. primarily quantitative information c. internal decision focus d. statement format determined by company information needs 3. The organization that presently has the primary responsibility to establish generally accepted accounting principles that are applicable to the financial statements of entities in the private sector of the U.S. is the a. Accounting Principles Board b. Securities and Exchange Commission c. Financial Accounting Standards Board d. Committee on Accounting Procedure + 4. Which pronouncements are not issued by the FASB? a. Statements of Financial Accounting Concepts b. Technical Bulletins c. Opinions d. Interpretations 5. A primary focus of financial reporting about a company's performance during an accounting period is information related to the company's: a. Balance Sheet b. Income Statement c. Comprehensive Income d. Cash Flows 6. Which qualitative characteristic is an ingredient of relevance? a. Verifiability b. Timeliness c. Neutrality d representational faithfulness 7. Which of the following qualitative characteristics may have to be sacrificed in order to achieve timeliness? a. Relevance b. Reliability e. Comparability d. predictive value 8. Which of the following are considered secondary characteristics of accounting information? a verifiability and feedback value b. predictive value and timeliness e comparability and consistency d. representational faithfulness and neutrality 9. The four major financial statements of a corporation consist of the income statement, balance sheet, statement of cash flows and statement of changes in stockholders' equity b. balance sheet, statement of cash flows, statement of retained earnings, and income statement c. income statement, statement of cash flows, statement of owners' equity, and balance sheet d. statement of cash flows, balance sheet, income statement, and statement of capital equity 10. All of the following items are classified as accounting assumptions and conventions except for a. going concern b. Timeliness c. monetary unit d. Entity 11. Under current GAAP, most resources of a business entity are to be valued in its financial statements at a value that is most relevant to the needs of users of the financial statements b. historical cost c. the current cost of replacing the resource d. current appraisal values 12. a. FASB suggests that revenues are considered to be earned: at the point of sale. b. throughout the earnings process when the company is entitled to its benefits. d when cash is received. c. 13. The principle of revenue recognition results in: a. recording revenue in the income statement, b. recording realized revenue when it is earned. c. measuring relevant and reliable information whenever a transaction has occurred. d. assuring the existence of all amounts recorded as net income. 14. Of the following reporting assumptions or reporting principles, the one most widely criticized is the a consistency principle b. full-disclosure principle c. entity assumption d. historical cost principle 15. Expenses are recognized and matched against revenues on the basis of three principles. Which is not one of these principles? a immediate recognition b. associating cash flows c. systematic and rational allocation d. associating cause and effect Below is a list of the qualitative characteristics identified in FASB Statement of Financial Accounting Concepts No. 2. Following the list is a series of descriptive phrases. c. a feedback value b. Relevance decision usefulness d. Reliability e. Comparability f. predictive value 8 h. i. j. k. verifiability consistency representational faithfulness timeliness neutrality 1. When information can make a difference in a decision 2. Making information available when it is needed. 3 When accounting policies and procedures are unchanged from period to period. When information is verifiable and neutral. 4. 5. Occurs when the measurement results can be duplicated. 6. The overall qualitative characteristic accounting information should possess. 7. When information enables decision makers to confirm prior expectations. 8. When accounting information is reported the same way by different companies. Publications and Organizations Significant accounting publications are listed below (1-9). Sources or sponsors of accounting publications are identified next by alphabetical character (a-t), Match the publications with their sources. Publications 1. Accounting Research Bulletins (1953-1959) 2. Statements on Auditing Standards 3. Journal of Accountancy 4. Emerging Issues Task Force Statements 5. Opinions (1962-1973) 6. Technical Bulletins 7. Statements of Financial Accounting Standards 8. Statements of Financial Accounting Concepts 9. Statements of Position (SOPs) Sources/Sponsors a. Auditing Standards Board b. Accounting Standards Executive Committee c. The AICPA d. Committee on Accounting Procedure e Accounting Principles Board f. Financial Accounting Standards Board