Theory Ex 1

Created by hneagle1 

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A

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

C

What historical evidence of the business operations of the private estate of Apollonius was discovered early inthe20th century?
a. The Iliad
b. Plato's Republic
c. The Zenon papyri
d. Pacioli's work, Summa de Arithmetica Geometria Proportioni et Proportionalita,

B

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

C

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

A

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

D

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

A

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

B

Which of the following is a public sector accounting standard setter?
a. FASB
b. SEC
c. APB
d. CAP

D

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

A

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

B

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.

A

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

C

The 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

C

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

D

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

C

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

Paton

Which early accounting theorist was among the first to express the view that all changes in the value of assets and liabilities should be reflected in the financial statements?

Veblen

Which economist influenced the views of DR Scott

C

Which of the following is not one of the DR's Scott's hierarchy of accounting postulates and principles?
A. Orientation postulate
B. The principles of truth and fairness
C. The materiality principle
D. The principles of adaptability and consistency

AAA

Which organization published the monograph titled "A tentative statement of accounting principles affecting corporate reports"?

AIA

Which organization published the monograph titled "A statement of accounting principles"?

Moonitz

Who was the author of ARS Study no. 1 "The basic postulates of accounting"?

B

Which of the following is not an approaches to accounting theory as stated by STATTA:
A. Classic
B. Neoclassical
C. Decision usefulness
D. Information Economics

relevance

Under SFAC, feedback value is an ingredient of the primary quality of ___

comparability

Under SFAC 2,____ interacts with both relevance and reliability to contribute to the usefulness of information

decision usefulness

What is the most important quality that SFAC no. 2 stated?

A

Which of the following is considered a pervasive constrain by SFAC no. 2?
A. Benefits > costs
B. Conservatism
C. Timeliness
D. Verifiability

materiality

What is the primary quality ingredient of reliability?

Predictive value

What is the primary quality of relevance?

representational faithfulness

___ is the ability through consensus of measures to ensure that information represents what it purports to represent

B

Under SFAC no. 2, which of following relates to both relevance and reliability?
A. Timeliness
B. Materiality
C. Verifiability
D. Neutrality

B

Which of the following is not a qualitative characteristic associated with reliability?
A. Verifiable
B. Conservatism
C. Neutral
D. Faithful representation

C

An item is considered material if:
A. It doesn't cost a lot of money
B. It is of a tangible good
C. It is likely to influence the decision of an investor or creditor
D. The cost of reporting the item is greater than its benefits

C

Which of the following is not an environmental actor that could impact on the development of a country's accounting system?
a. Level of education
b. Political system
c. Geographic location
d. Legal system

A

What is the current acronym for the body most responsible for issuing international accounting standards?
a. IASB
b. SEC
c. FASB
d. IASC

D

How many trustees serve on the IASC Foundation?
a. 14
b. 18
c. 20
d. 22

A

How many members serve on the IASB?
a. 14
b. 18
c. 20
d. 22

D

Which of the following bodies has the responsibility to issue international financial reporting standards (IFRS)
a. The International Financial Reporting Interpretations Committee
b. The International Standards Advisory Council
c. The IASC Foundation
d. The International Accounting Standards Board

B

Which of the following is not a use of international accounting standards?
a. As national requirements.
b. As standards to be violated to improve intercountry comparability..
c. As an international benchmark for those countries that develop their own requirements.
d. By regulatory authorities for domestic and foreign companies

B

How does the IASC enforce its standards?
a. Through , the International Organization of Securities Commission
b. Through the concept of best endeavors
c. Through the Securities and Exchange Commission
d. Through the Financial Accounting Standards Board

A

What is the name given to the agreement between the FASB and IASC to harmonize accounting standards?
a. The Norwalk Agreement
b. The London agreement
c. The Washington D C agreement
d. The Paris Accords

D

What is the title of the form that foreign companies have used to reconcile their financial statements to U. S. GAAP?
a. Form 10-K
b. Form 10-Q
c. Form SX
d. Form20-F

B

Which of the following is not a qualitative characteristic contained in the IASB's Framework for the Preparation of Financial Statements?
a. Understandability
b. Timeliness
c. Relevance
d. Reliability

A

Which of the following is not an element of financial statements contained in the IASB's Framework for the Preparation of Financial Statements?
a. Gain
b. Income
c. Expense
d. Asset

D

Which of the following is seen as a pervasive difference between IASB's and FASB's Conceptual Frameworks?
a. Definition of elements
b. Number of qualitative characteristics
c. Scope of authority
d. Level of detail

B

Which of the following concepts is contained in the FASB's conceptual framework but not in the IASC's
a. Expense
b. Comprehensive income
c. Asset
d. Liability

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