[38] The recognition of research and development costs is based on which principle?

A. Associating cause and effect. B. Systematic and rational allocation. C. Immediate recognition. D. Tracing specific costs to specific revenues.

[39] Notes to the financial statements

A. Provide some useful information that cannot be provided in financial statements.

B. Correct improper presentation in the financial statements.

C. Provide recognition of financial amounts.

D. Present managements responses to auditor comments.

[40] Giaconda, Inc., acquires an asset for which it will measure the fair value by discounting future cash flows of the asset. Which of the following terms best describes this fair value measurement approach?

A. Market. B. Income. C. Cost. D. Observable inputs.

[41] The primary current source of generally accepted accounting principles for nongovernmental U.S. entities is the

A. Securities and Exchange Commission.

B. Financial Accounting Foundation.

C. Financial Accounting Standards Board.

D. American Institute of Certified Public Accountants.

[42] Which of the following statements best describes an operating procedure for issuing a new Accounting Standards Update?

A. The Emerging Issues Task Force must approve a discussion paper before it is disseminated to the public.

B. The Exposure Draft is modified per public opinion before issuing a Discussion Paper.

C. A new update is issued only after a majority vote by the members of the FASB.

D. A new FASB statement can be rescinded by a majority vote of the AICPA membership.

[43] Which of the following reports would a company file to meet the U.S. Securities and Exchange Commissions requirements for unaudited, interim financial statements reviewed by an independent accountant?

A. Form 10-Q. B. Form 10-K. C. 14A proxy statement. D. Form S-1.

[44] Which of the following is the annual report that is filed with the United States Securities and Exchange Commission?

A. Form 8-K. B. Form 10-K. C. Form S-1. D. Form 10-Q.