Concepts for Analysis 1-1
Presented below are four statements which you are to identify as true or false.
1. GAAP is the term used to indicate the whole body of FASB authoritative literature.
2. Any company claiming compliance with GAAP must comply with most standards and interpretations but does not have to follow the disclosure requirements.
3. The primary governmental body that has influence over the FASB is the SEC.
4. The FASB has a government mandate and therefore does not have to follow due process in issuing a standard.
Concepts for Analysis 1-2
Presented below are four statements which you are to identify as true or false.
1. The objective of financial statements emphasizes a stewardship approach for reporting financial information.
2. The purpose of the objective of financial reporting is to prepare a balance sheet, an income statement, a statement of cash flows, and a statement of owners' or stockholders' equity.
3. Because they are generally shorter, FASB interpretations are subject to less due process, compared to FASB standards.
4. The objective of financial reporting uses an entity rather than a proprietary approach in determining what information to report.
To satisfy the stewardship reporting responsibility of management, companies prepare multiple sets of special-purpose financial statements to meet the information needs of a variety of financial statement users.
True
False
Practice Question 4
Accounting principles are "generally accepted" only when
I. an authoritative accounting rule-making body has established it in an official pronouncement.
II. it has been accepted as appropriate because of its universal application.
I only.
II only.
I or II.
Neither I nor II.
Practice Question 25
The Codification's purpose is to integrate and synthesize existing GAAP?not to create new GAAP.
- All of the following are true regarding the FASB Codification except:
the goal of the Codification was to provide one place where all authoritative literature about financial statement preparation could be found.
the purpose of the Codification is to create new GAAP.
the Codification was created to simplify user access.
the Codification changes the way GAAP is documented, presented, and updated.
- IFRS stands for:
International Federation of Reporting Services.
Independent Financial Reporting Standards.
International Financial Reporting Standards.
Integrated Financial Reporting Services.
- The major key players on the international side are the:
IASB and FASB.
SEC and FASB.
IOSCO and the SEC.
IASB and IOSCO.
- IFRS is comprised of:
International Financial Reporting Standards and FASB Financial Reporting Standards.
International Financial Reporting Standards, International Accounting Standards, and International Accounting Interpretations.
International Accounting Standards and International Accounting Interpretations.
FASB Financial Reporting Standards and International Accounting Standards.
- The authoritative status of the Framework for the Preparation and Presentation of Financial Statements is as follows:
It is used when there is no standard or interpretation related to the reporting issues under consideration.
It is not as authoritative as a standard but takes precedence over any interpretation related to the reporting issue.
It takes precedence over all other authoritative literature.
It has no authoritative status.
- Which of the following statements is true?
The IASB has the same number of members as the FASB.
The IASB structure has both advisory and interpretation functions, but no trustees.
The IASB has been in existence longer than the FASB.
The IASB structure is quite similar to the FASB's, except the IASB has a larger number of board members.