Question 1

What type of FASB Pronouncement were to provide more timely and consistent application guidance and made to narrow and limit revisions of standards?

Accepted Answer

The answer of What type of FASB Pronouncement were to...

Question 2

What is the responsibility of the International Accounting Standards Board?

Accepted Answer

The International Accounting Standards Board's responsibility is to promote uniform accounting standards among international countries. It does not settle accounting disputes or enforce standards through legal channels, nor does it develop a uniform currency for financial transactions.

Question 3

What type of FASB Pronouncement carried the highest authority within GAAP, establishing the methods and procedures required on specific accounting issues?

Accepted Answer

Statements of Financial Accounting Standards (SFAS) carry the highest authority within GAAP as they establish the methods and procedures required on specific accounting issues. SFAS are issued by the Financial Accounting Standards Board (FASB) and are considered primary sources of GAAP. Staff Positions (SP), Technical Bulletins (TB), and Statements of Financial Accounting Concepts (SFAC) are other types of FASB pronouncements that provide guidance and interpretations of GAAP but do not carry the same level of authority as SFAS.

Question 4

Certain U.S. accounting standards have been, and will be, amended to aid in the international convergence process. The process of changing these standards usually involves

Accepted Answer

The process of changing U.S. accounting standards to aid in international convergence typically involves selecting the best standard between existing U.S. and international standards. This process often involves extensive research and analysis to determine which standard is more effective or efficient, and may also involve consultation with international accounting organizations and experts to ensure that the selected standard is compatible with international accounting principles. There is no short deliberation or vote of Congress involved in this process, and rejecting all existing standards to develop a new concept would be a costly and impractical approach. Similarly, while the IRS may play a role in implementing accounting standards, they are not responsible for determining or amending these standards.

Question 5

What type of FASB pronouncements refined GAAP by clarifying conflicting or unclear issues relating to previously issued standards?

Accepted Answer

Interpretations are FASB pronouncements that clarify conflicting or unclear issues relating to previously issued standards, thereby refining GAAP. Staff Positions and Technical Bulletins are also types of FASB pronouncements, but they generally address new or emerging accounting issues rather than refining existing standards. "Other Pronouncements" is too broad and vague to be considered a valid answer.

Question 6

Which of the following documents includes all of the accounting standards?

Accepted Answer

None of these documents individually includes all of the accounting standards. Regulation S-X outlines the form and content of financial statements required by the SEC, the FASB Conceptual Framework provides an underlying structure for the development of accounting standards, and Statements of Financial Accounting Standards (issued by the FASB) are specific standards, but not all encompassing.

Question 7

Assume that authoritative support regarding GAAP for a particular transaction is needed. A correct hierarchy of authority to be followed (highest, second, third) would be

Accepted Answer

The hierarchy of authority for GAAP is as follows: FASB Statements > FASB Technical Bulletins > AICPA Accounting Interpretations. Therefore, the correct order would be FASB Statements, FASB Technical Bulletins, and then AICPA Accounting Interpretations. Choice D is the only answer option with this order.

Question 8

For foreign companies that issue securities in the United States to raise capital, the SEC

Accepted Answer

The answer of For foreign companies that issue securities in...

Question 9

Notes to financial statements provide

Accepted Answer

Notes to financial statements provide further explanation and detail about items shown in the financial statements, such as accounting policies, significant events, and contingencies. They may also provide additional information about the company's operations, investments, and financing. The other choices may also be included in financial statements, but notes typically provide more detailed information.

Question 10

Which of the following is NOT a major standard-setting body responsible for the establishment of U.S. and international GAAP (Generally Accepted Accounting Principles)?

Accepted Answer

The PCAOB is responsible for overseeing and regulating the audit of public companies, but it is not a standard-setting body for accounting principles. The SEC, FASB, and IASB are all major standard-setting bodies for U.S. and international GAAP.

Question 11

The FASB Accounting Standards Codification is expected to provide all of the following benefits except

Accepted Answer

The FASB Accounting Standards Codification does not include results of academic research as authoritative support.

Question 12

Conversion to IFRS reporting by all U.S. companies would be best accomplished with a transition plan for all of the following reasons except

Accepted Answer

Careful planning should not be aimed at manipulating the IFRS for financial benefit, as the purpose of transitioning to IFRS is to improve transparency and comparability in financial reporting. The focus of the transition plan should be on minimizing disruption and cost to companies, while ensuring that the IFRS are implemented accurately and efficiently.

Question 13

The accounting equations is

Accepted Answer

The accounting equation is Assets = Liabilities + Stockholder's Equity. By rearranging this equation, we get Assets - Liabilities = Stockholder's Equity. Therefore, option B is the correct choice.

Question 14

The agreement in 2002 by the FASB and IASB to develop high quality, compatible accounting standards that could be used by both domestic and cross-border financial reporting was called the

Accepted Answer

The agreement in 2002 by the FASB and IASB to develop high quality, compatible accounting standards that could be used by both domestic and cross-border financial reporting was called the Norwalk agreement. The other options are not correct names for this agreement.

Question 15

Which statement measures and reports the financial results of a company's performance for a period of time?

Accepted Answer

The income statement measures and reports the financial results of a company's performance for a period of time, typically a quarter or a year. It shows the company's revenue, expenses, and net income or loss for the period. The balance sheet shows the company's assets, liabilities, and equity as of a specific date, while the statement of cash flows shows the inflows and outflows of cash during a period of time. The statement of financial position is another name for the balance sheet.

Question 16

The four major financial statements of a corporation consist of the

Accepted Answer

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.

Question 17

What financial statement is considered the cornerstone of financial reporting?

Accepted Answer

The balance sheet is considered the cornerstone of financial reporting because it provides a snapshot of the company's financial position at a specific point in time, including its assets, liabilities, and equity. This information is useful for investors, creditors, and other stakeholders in evaluating the company's financial health and making informed decisions. While the other financial statements are also important, they provide more detail about specific aspects of the company's financial performance and are typically analyzed in conjunction with the balance sheet.

Question 18

U.S. companies that have subsidiaries in foreign countries can file their financial statements with the SEC by using?

Accepted Answer

The answer of U.S. companies that have subsidiaries in foreign...

Question 19

The FASB Accounting Standards Codification includes six levels or components which of these is not a level?

Accepted Answer

The six levels or components of the FASB Accounting Standards Codification are: Area, Topic, Subtopic, Section, Paragraph, and Subparagraph. Therefore, option C is not a level/component of the Codification.

Question 20

What is the name of the parent organization to the International Accounting Standards Board?

Accepted Answer

The parent organization to the International Accounting Standards Board is the International Financial Reporting Standards (IFRS) Foundation. The IFRS Foundation is responsible for overseeing the work of the IASB, which develops and publishes IFRS.

Quiz 1: The Demand for and Supply of Financial Accounting Information