From 1 to 12 is to tell if its true or false. From 13 to 25 is to pick the best answer
1. Financial accounting is the process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control a company's operations. 2. Investors are interested in financial reporting because it provides information that is useful for making decisions. 3. The Securities and Exchange Commission appointed the Committee on Accounting Procedure. 4. The passage of a new FASB Accounting Standards Update requires the support of five of the seven board members. 5. The FASB's Codification creates a new set of GAAP. 6. The AICPA's Code of Professional Conduct requires that members prepare financial statements in accordance with generally accepted accounting principles. 7. The Public Company Accounting Oversight Board. has oversight and enforcement authority and establishes auditing and independence standards and rules. 8. The expectations gap is due to the difference between what the public thinks accountants should do and what accountants think they can do. 9. Accounting standards are now less likely to require the recording or disclosure of fair value information. 10. Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow. 11. The FASB is currently the public sector organization responsible for setting accounting standards in the U.S. 12. The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's auditors. LJU Lieder 13. All the following are ways in which accounting information is used by financial accounting users except to a. buy, sell, hold equity and debt instruments. b. decide whether to invest in the company. c. evaluate borrowing capacity to determine the extent of a loan to grant. d. plan and control company's operations. 14. What is the objective of financial reporting? a. Provide information that is useful to management in making decisions. b. Provide information that clearly portrays nonfinancial transactions c. Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors. d. Provide information that excludes claims to the resources. 15. Which of the following organizations has been responsible for setting U.S. accounting standards? a. The Accounting Principles Board. b. The Committee on Accounting Procedure. c. The Financial Accounting Standards Board. d. All of the answer choices are correct. 16. Why did the AICPA create the Accounting Principles Board? a. The SEC disbanded the previous standard setting organization. b. The previous standard setting organization did not provide a structured set of accounting principles. c. No such organization existed in the past. d. The reason was to revert to the written expression of accounting principles. 17. Each of the following are true of the Securities and Exchange Commission except that a. it is a federal agency. unting standards varies. 17. Each of the following are true of the Securities and Exchange Commission except that a. it is a federal agency. b. the SEC's involvement in the development of accounting standards varies. C. the FASB relies on the SEC to develop accounting standards. d. the SEC requires registrants to adhere to GAAP. 18. The major distinction between the Financial Accounting Standards Board (FASB) and its predecessor, the Accounting Principles Board (APB), is a. the FASB issues exposure drafts of proposed standards. b. all members of the FASB are fully remunerated, serve full time, and are independent of any companies or institutions. All c. all members of the FASB possess extensive experience in financial reporting. d. a majority of the members of the FASB are CPAs who are drawn from public practice. 19. Which of the following is not a publication of the FASB? a. Statements of Financial Accounting Concepts b. Accounting Research Bulletins c. Interpretations d. Technical Bulletins 20. The American Institute of Certified Public Accountants (AICPA) continues to be involved in all of the following except a. developing and enforcing professional ethics. b. developing auditing standards for public companies. c. providing professional education programs. d. grading the CPA exam. 21. Which of the following organizations has not been instrumental in the development of financial accounting standards in the United States? a. AICPA b. FASB c. IASB d. SEC 22. Which of the following organizations has not published accounting standards? a. American Institute of Certified Public Accountants. b. Securities and Exchange Commission. c. Financial Accounting Standards Board. d. American Institute of Certified Private Accountants. 23. The following are part of the "due process" system used by the FASB in the evolution of a typical FASB Accounting Standards Update: 1. Exposure Draft 2. FASB Accounting Standards Update 3. Preliminary Views The chronological order in which these items are released is as follows: a. 1,2,3 b. 1, 3,2 c. 2, 3, 1. d. 3, 1, 2 24. Which of the following is not a part of generally accepted accounting principles? a. FASB Interpretations b. CAP Accounting Research Bulletins C. APB Opinions d. AICPA Research Analysis. 25. Which of the following is a source of pressure that may influence the accounting standard setting process? a. Congress b. Lobbyists C. CPA firms d. All of these answers are correct
