Question 1

What historical evidence of the business operations of the private estate of Apollonius was discovered early inthe20th century?
A)The Iliad
B)HYPERLINK "http://en.wikipedia.org/wiki/Plato" \o "Plato" Plato's HYPERLINK "http://en.wikipedia.org/wiki/The_Republic_(Plato)" \o "The Republic (Plato)" Republic
C)The Zenon papyri
D)Pacioli's work,Summa de Arithmetica Geometria Proportioni et Proportionalita,

Accepted Answer

The Zenon papyri, discovered in the early 20th century, contain detailed records of the business operations of the private estate of Apollonius. The other options are not relevant to this particular historical evidence.

Question 2

Which of the following was not a criticism of the development of accounting standards by the Accounting Principles Board?
A)The independence of the members of the APB.The individuals serving on the board had full-time responsibilities elsewhere that might influence their views of certain issues.
B)The structure of the board.The largest eight public accounting firms at that time)were automatically awarded one member,and there were usually five or six other public accountants on the APB.
C)Harmonization.The accounting standards developed were dissimilar to those developed by the International Accounting Standards Committee.
D)Response time.The emerging accounting problems were not being investigated and solved quickly enough by the part-time members.

Accepted Answer

Harmonization was not a criticism of the development of accounting standards by the Accounting Principles Board. The other options were all criticisms.

Question 3

Which of the following is not a consequence of the standards overload problem to small businesses?
A)If a small business omits a GAAP requirement from audited financial statements,a qualified or adverse opinion may be rendered.
B)Small businesses do not need to keep financial records
C)The cost of complying with GAAP requirements may cause a small business to forgo the development of other,more relevant information.
D)Small CPA firms that audit smaller companies must keep up to date on all the same requirements as large international firms,but they cannot afford the specialists that are available on a centralized basis in the large firms.

Accepted Answer

Small businesses still need to keep financial records regardless of the standards overload problem. Not keeping proper financial records can lead to legal and financial consequences.

Question 4

Which of the following is a source of nonauthoritative accounting guidance and literature?
A)Financial Accounting Standards Board Statements
B)Financial Accounting Standards Board Interpretations
C)Financial Accounting Standards Board Technical Bulletins
D)Practices that are widely recognized and prevalent either generally or in the industry

Accepted Answer

Practices that are widely recognized and prevalent either generally or in the industry are sources of nonauthoritative accounting guidance and literature. FASB Statements, Interpretations, and Technical Bulletins are authoritative accounting guidance.

Question 5

Which of the following types of pronouncements now establishes generally accepted accounting principles?
A)Statements of Concepts
B)Statements of Financial Accounting Standards
C)APB Opinions
D)Accounting Standards Updates

Accepted Answer

Accounting Standards Updates (ASUs) are issued by the Financial Accounting Standards Board (FASB) to amend the Accounting Standards Codification, which is the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities.

Question 6

Discuss the evolution of accounting during the 1930s.

Accepted Answer

The answer of Discuss the evolution of accounting during the...

Question 7

Which of the following companies was involved in an accounting failure that caused the public accounting firm Arthur Andersen to gout of business?
A)Goldman Sachs
B)Wachovia
C)Enron
D)AIG

Accepted Answer

Enron was involved in an accounting failure that led to their bankruptcy and also caused Arthur Andersen, their public accounting firm, to go out of business.

Question 8

Who has been given credit or developing the double-entry system of bookkeeping?
A)Francis Wheat
B)Fra Luca Pacioli
C)A.C.Littleton
D)William Paton

Accepted Answer

Fra Luca Pacioli, an Italian friar and mathematician, is credited with developing the double-entry system of bookkeeping in the late 15th century.

Question 9

What is the difference between normative and positive theory?

Accepted Answer

The answer of What is the difference between normative and...

Question 10

Which of the following bodies has the ultimate authority to issue accounting pronouncements in the United States?
A)Securities and Exchange Commission
B)Financial Accounting Standards Board
C)International Accounting Standards Committee
D)Internal Revenue Service

Accepted Answer

The answer of Which of the following bodies has the...

Question 11

Which of the following is the professional organization of university accounting professors?
A)American Accounting Association
B)American Institute of Certified Public Accountants
C)American Institute of Accountants
D)Financial Executives Institute

Accepted Answer

The American Accounting Association (AAA) is the professional organization of university accounting professors. The American Institute of Certified Public Accountants (AICPA) is the professional organization of certified public accountants, the American Institute of Accountants merged with the AICPA in 1957, and the Financial Executives Institute (FEI) is a professional organization for executives in financial management.

Question 12

Which of the following is a public sector accounting standard setter?
A)FASB
B)SEC
C)APB
D)CAP

Accepted Answer

The SEC (Securities and Exchange Commission) is a public sector entity responsible for enforcing federal securities laws and regulating the securities industry, which includes setting accounting standards indirectly through its authority over publicly traded companies. The FASB (Financial Accounting Standards Board), APB (Accounting Principles Board), and CAP (Committee on Accounting Procedure) are private sector entities involved in the development and establishment of financial accounting and reporting standards, primarily for the private sector.

Question 13

Considering and understanding how business decisions affect the financial statements is
A)The sole responsibility of the Securities and Exchange Commission.
B)Provided in the auditor's report.
C)Referred to as an economic consequence perspective.
D)Interpreted strictly by the company's suppliers.

Accepted Answer

Considering and understanding how business decisions affect the financial statements from an economic consequence perspective is important for the management and shareholders of the company, as it helps them make informed decisions that maximize the value of the company. The Securities and Exchange Commission plays a regulatory role but is not solely responsible for this. The auditor's report provides an independent opinion on the financial statements but may not necessarily provide an understanding of how business decisions affect them. The interpretation of financial statements is not strictly limited to the company's suppliers.

Question 14

Why is the development of a general theory of accounting important

Accepted Answer

The answer of Why is the development of a general...

Question 15

T he impact of accounting reports on various segments of our economic society is the definition of the concept of
A)Standard setting as apolitical process
B)Standards overload
C)Economic consequences
D)The role of ethics in accounting

Accepted Answer

The concept of economic consequences refers to the ripple effect that accounting reports can have on various stakeholders, including investors, creditors, employees, and society as a whole. This concept recognizes that accounting reports are not simply technical documents, but rather have real-world implications that can shape economic behavior and decision-making. Standards overload refers to the challenges that arise when there are too many different accounting standards or regulations to follow, while the role of ethics in accounting pertains to the ethical principles and values that guide the profession. Standard setting as a political process recognizes the fact that accounting standards are developed and implemented within a broader political and economic context, and are subject to various pressures and influences.

Question 16

Which of the following types of pronouncements are intended to establish the objectives and concepts that the FASB will use in developing standards of financial accounting and reporting?
A)Statements of Concepts
B)Statements of Financial Accounting Standards
C)APB Opinions
D)Accounting Standards Updates

Accepted Answer

Statements of Concepts are intended to establish the objectives and concepts that the FASB will use in developing standards of financial accounting and reporting. Statements of Financial Accounting Standards, Accounting Standards Updates, and APB Opinions are actual standards and updates issued by the FASB or the APB.

Question 17

What controversy originally highlighted the need for standard setting groups to have more authority?
A)Accounting for stock options
B)Accounting for derivatives
C)Accounting for marketable securities
D)Accounting for the investment tax credit

Accepted Answer

The answer of What controversy originally highlighted the need for...

Question 18

Which of the following committees recommended abolishing the Accounting Principles Board and replacing it with the Financial Accounting Board ?
A)Wheat
B)Cohen
C)Trueblood
D)Anderson

Accepted Answer

The Wheat Committee recommended abolishing the Accounting Principles Board (APB) and replacing it with the Financial Accounting Standards Board (FASB) to improve the standard-setting process in the United States.

Question 19

Some accountants maintain that accounting standards are as much a product of political action as they are of careful logic or empirical findings.This belief is an example of the concept of
A)Standard setting as apolitical process
B)Standards overload
C)Economic consequences
D)The role of ethics in accounting

Accepted Answer

The statement that accounting standards are influenced by political action suggests the concept of standard setting as a political process, which implies that accounting standards are not solely determined by careful logic or empirical findings, but also by social, economic, and political factors.

Question 20

Discuss the role of ethics in accounting.

Accepted Answer

The answer of Discuss the role of ethics in accounting....

Quiz 1: The Development of Accounting Theory

What historical evidence of the business operations of the private estate of Apollonius was discovered early inthe20th century?

Which of the following was not a criticism of the development of accounting standards by the Accounting Principles Board?

Which of the following is not a consequence of the standards overload problem to small businesses?

Which of the following is a source of nonauthoritative accounting guidance and literature?

Which of the following types of pronouncements now establishes generally accepted accounting principles?

Discuss the evolution of accounting during the 1930s.

Which of the following companies was involved in an accounting failure that caused the public accounting firm Arthur Andersen to gout of business?

Who has been given credit or developing the double-entry system of bookkeeping?

What is the difference between normative and positive theory?

Which of the following bodies has the ultimate authority to issue accounting pronouncements in the United States?

Which of the following is the professional organization of university accounting professors?

Which of the following is a public sector accounting standard setter?

Considering and understanding how business decisions affect the financial statements is

Why is the development of a general theory of accounting important

T he impact of accounting reports on various segments of our economic society is the definition of the concept of

Which of the following types of pronouncements are intended to establish the objectives and concepts that the FASB will use in developing standards of financial accounting and reporting?

What controversy originally highlighted the need for standard setting groups to have more authority?

Which of the following committees recommended abolishing the Accounting Principles Board and replacing it with the Financial Accounting Board ?

Some accountants maintain that accounting standards are as much a product of political action as they are of careful logic or empirical findings.This belief is an example of the concept of

Discuss the role of ethics in accounting.