Deck 10: Financial Accounting Research

Question 1

To assist with citation of the Accounting Standards Codification, the FASB created a numerical system that uses which of the following formats?

A)topics that track Code section numbers
B)standards with heading numbers based on release date
C)topics identified by a three-digit number between 105-999
D)none of these are correct

Answer 1

C

Question 2

Which statement is CORRECT regarding the SEC?

A)It has standards-setting authority over public companies.
B)It is authorized to oversee the functioning of U.S. capital markets.
C)It has issued a number of forms of guidance on accounting principles.
D)All of these are correct.

Answer 2

D

Question 3

Which of the following International Accounting Standards deals with international guidance for accounting for income taxes?

A)IAS 29
B)ASC 740
C)SFAS 109
D)IAS 12

Answer 3

D

Question 4

A position taken in a previously filed return or expected to be taken in a future return is known as:

A)an audit position
B)a tax position
C)an uncertain tax position
D)none of these are correct

Question 5

Most research using the Codification is expected to be performed using the:

A)Browse function
B)Search function
C)Go To function
D)Find function

Question 6

As part of its Checkpoint series, Thomson Reuters offers:

A)Audit and Accounting Disclosure Manual
B)GAAP Practice Manual
C)SEC compliance
D)all of these are correct

Question 7

While browsing through Codification structure, all of the two-digit subtopics and three-digit intersection topics are displayed on the:

A)subsection page
B)general topic landing page
C)search screen
D)none of these are correct

Question 8

Deferred tax assets represent:

A)future deductions
B)contingent assets
C)future includable income
D)unearned revenue

Question 9

Which of the following functions provides a printer-friendly version of a document in the Codification Research System (CRS)?

A)Find function
B)Go To function
C)Search function
D)Print function

Question 10

The Go To function works in a similar fashion to a:

A)Cross-reference function
B)Browse function in a typical tax service
C)Join Sections function in FASB Accounting Standards CRS
D)Search by citation in a typical tax service

Question 11

Which of the following represents the correct Codification structure?

A)Sections-Subsections-Topics-Subtopics
B)Topics-Subtopics-Sections-Subsections
C)Code Sections and FASB Topics
D)none of these are correct

Question 12

Which of the following are missions of the International Accounting Standards Board (IASB)?

A)to contribute to economic efficiency by helping investors to identify opportunities and risks across the world
B)to bring transparency by enhancing the international comparability and quality of financial information
C)to strengthen accounting ability by reducing the information gap between the providers of capital and the people to whom they have entrusted their money
D)all of these are correct

Question 13

Which of the following statements is CORRECT regarding the FASB Accounting Standards Codification Research System (CRS)?

A)Subsections represent a collection of related guidance for a specific area.
B)A no-cost basic version is available that allows the user to browse but not search the Codification.
C)Keyword searching is not available in the Codification Research System.
D)No cross-referencing to older guidance documents is provided.

Question 14

Subsequent to Codification, changes to guidance in the Codification are now made through:

A)accounting standards updates
B)XBRL elements
C)issuance of a new statement of position
D)all of the these are correct

Question 15

Under the FASB Codification, guidance for income taxes is found in:

A)ASC Statement 133
B)ASC 740
C)IAS 12
D)SFAS 109

Question 16

Which statement is CORRECT regarding accounting for income taxes in a financial statement?

A)The income tax provision includes only the taxes paid for that reporting period.
B)Items of income and expense are treated the same for book and tax purposes as reflected in the financial statement.
C)Accounting for income taxes does not incorporate the deferred tax model.
D)Accounting for income taxes must reflect the differences between financial statement and tax return reporting.

Question 17

Accounting Research Manager, an online database to provide accounting, auditing, and other SEC authoritative literature, is a product of:

A)Checkpoint
B)WG&L
C)CCH IntelliConnect
D)Westlaw

Question 18

The main advantage of the FASB Codification is:

A)convergence of national accounting standards and IFRS
B)a shift from national accounting to international accounting
C)a move away from a standards-based model of organization to one based on topical area
D)all of these are correct

Question 19

Pre-codification literature issued by various standard setters includes:

A)Statements of Financial Accounting Standards
B)Derivative Implementation Group Issues
C)Accounting Research Bulletins
D)all of these are correct

Question 20

In the United States, GAAP comes under the purview of the:

A)FINRA
B)IRS
C)Securities and Exchange Commission (SEC)
D)none of these are correct

Question 21

ASC 740 requires taxpayers to examine each and every "tax position" taken.

Question 22

The Codification system provides a cross-referencing system that allows researchers to locate guidance in the Codification using the old guidance or to find the old guidance using the new Codification reference.

Question 23

Exposure drafts issued for proposed updates of accounting standards in the Codification are indexed alphabetically.

Question 24

Even with the Codification, the "Financial Accounting Standards Board (FASB) is not the only standard-setting authority in the United Sates." Explain.

Question 25

How is the Codification Research System's "Join Sections" function useful to tax researchers? Give an example of how it works.

Question 26

What are the principal objectives of the International Accounting Standards Board (IASB)?

Question 27

The application of ASC 740 to an uncertain tax position allows tax benefits to be recognized in financial statements only when it is determined that it is more likely than not that the tax position can be sustained or when the position is ultimately settled via an audit, a negotiation, or a court decision.

Question 28

The FASB Codification "Join Sections" allows the related sections of a topic to be joined into a single document so that the guidance across all sections within a topic can be reviewed at the same time.

Question 29

What is meant by "tax position"? Explain the requirements of ASC 740 for the reporting of tax positions.

Question 30

Which of the following statements is INCORRECT regarding the International Financial Reporting Standards (IFRS)?

A)The standards are promulgated by the International Accounting Standards Board.
B)IFRS takes into account the financial reporting needs of emerging economies and small and medium-sized entities.
C)The United States has adopted IFRS, and U.S. companies are now subject to the international standards.
D)All of the these statements are correct.

Question 31

Using the Codification Research System (CRS), a researcher can join all related sections of a topic into a single document so that the guidance across all sections within a topic can be reviewed at one time.

Question 32

The deferred tax model of taxes applies to all federal, state, foreign and local taxes based on income.

Question 33

The International Accounting Standards Board (IASB) was formed to deal with the proliferation of country- or jurisdiction-specific accounting principles.

Question 34

Generally, nonincome taxes are recognized in the financial statements in the period in which they are incurred.

Question 35

Under both U.S. GAAP and IAS, the amount of tax expense reflected in the financial statements is made up of both current and deferred components.

Question 36

The main difference between U.S. GAAP and IFRS is that IFRS is much lengthier, with over 25,000 pages.

Question 37

The Codification does not include material issued by the SEC applicable to public companies.

Question 38

Accounting Statements of Position (SOPs) were brought into the FASB Accounting Standards Codification (ASC).

Question 39

Prior to the 1970s, accounting standards were promulgated by groups formed under the umbrella of the American Institute of Certified Public Accountants (AICPA).

Question 40

Accounting Research Manager (ARM) is part of the Codification Research System (CRS) offering access to accounting, auditing, governmental, and SEC authoritative literature.

Question 41

Explain the basic principles of accounting for deferred taxes.

Question 42

"A sound understanding of financial accounting is essential for tax professionals." Discuss.