1.
Award: 10.00 points
The primary focus of financial accounting is on the financial information provided to present and potential investors and creditors.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
2.
Award: 10.00 points
3.
Award: 10.00 points
Financial reporting refers to the process of proving information to internal and external users.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
The capital markets provide a mechanism to help our economy allocate resources efficiently and are comprised of all investors and creditors.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
4.
Award: 10.00 points
The rate of return generated on the purchase of stock is calculated as the sum of the dividends and share price appreciation divided by the amount of the
initial investment.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
5.
Award: 10.00 points
Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-02 Explain the difference between cash
and accrual accounting.
6.
Award: 10.00 points
The FASB is currently the public-sector organization responsible for setting accounting standards in the United States.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-03 Define generally accepted accounting
principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and
international standards.
7.
Award: 10.00 points
8.
Award: 10.00 points
The FASB’s due process invites various interested parties to indicate their opinions about whether financial accounting standards should be changed.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-04 Explain why establishing accounting
standards is characterized as a political process.
Accounting for stock-based compensation is an area in which the FASB has received little political interference.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-04 Explain why establishing accounting
standards is characterized as a political process.
9.
Award: 10.00 points
The Public Reform and Investor Protection Act of 2002 (Sarbanes-Oxley) changed the entity responsible for regulating auditors and the types of non-audit
services they furnish to clients.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-05 Explain factors that encourage high-
quality financial reporting.
10.
Award: 10.00 points
A rules-based approach to standard-setting stresses professional judgment as opposed to following a list of rules.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-05 Explain factors that encourage high-
quality financial reporting.
11.
Award: 10.00 points
Under federal securities laws, the SEC has the authority to set accounting standards in the United States.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-03 Define generally accepted accounting
principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and
international standards.
12.
Award: 10.00 points
The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's
auditors.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-05 Explain factors that encourage high-
quality financial reporting.
13.
Award: 10.00 points
14.
Award: 10.00 points
Auditors play an important role in the resource allocation process by adding credibility to financial statements.
True
False
Award: 10.00 points
The primary focus of financial accounting is on the financial information provided to present and potential investors and creditors.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
2.
Award: 10.00 points
3.
Award: 10.00 points
Financial reporting refers to the process of proving information to internal and external users.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
The capital markets provide a mechanism to help our economy allocate resources efficiently and are comprised of all investors and creditors.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
4.
Award: 10.00 points
The rate of return generated on the purchase of stock is calculated as the sum of the dividends and share price appreciation divided by the amount of the
initial investment.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
5.
Award: 10.00 points
Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-02 Explain the difference between cash
and accrual accounting.
6.
Award: 10.00 points
The FASB is currently the public-sector organization responsible for setting accounting standards in the United States.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-03 Define generally accepted accounting
principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and
international standards.
7.
Award: 10.00 points
8.
Award: 10.00 points
The FASB’s due process invites various interested parties to indicate their opinions about whether financial accounting standards should be changed.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-04 Explain why establishing accounting
standards is characterized as a political process.
Accounting for stock-based compensation is an area in which the FASB has received little political interference.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-04 Explain why establishing accounting
standards is characterized as a political process.
9.
Award: 10.00 points
The Public Reform and Investor Protection Act of 2002 (Sarbanes-Oxley) changed the entity responsible for regulating auditors and the types of non-audit
services they furnish to clients.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-05 Explain factors that encourage high-
quality financial reporting.
10.
Award: 10.00 points
A rules-based approach to standard-setting stresses professional judgment as opposed to following a list of rules.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-05 Explain factors that encourage high-
quality financial reporting.
11.
Award: 10.00 points
Under federal securities laws, the SEC has the authority to set accounting standards in the United States.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-03 Define generally accepted accounting
principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and
international standards.
12.
Award: 10.00 points
The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's
auditors.
True
False
References
True / False Difficulty: 1 Easy Learning Objective: 01-05 Explain factors that encourage high-
quality financial reporting.
13.
Award: 10.00 points
14.
Award: 10.00 points
Auditors play an important role in the resource allocation process by adding credibility to financial statements.
True
False