Intermediate Accounting Volume 1, 13th Canadian Edition by Donald E. Kieso Test bank

 
 
22. When people think that no one is watching, they will often shirk their responsibilities. This is known as
a) moral hazard.
b) conservative accounting.
c) adverse selection.
d) an inefficient marketplace.
 
Answer: a
 
Difficulty: Easy
Learning Objective: Understand the financial reporting environment.
Section Reference: Financial Statements and Financial Reporting
CPA: Financial Reporting
Bloomcode: Knowledge
AACSB: Analytic
 
 
23. Conservative accounting refers to
a) a manager’s tendency to shirk his stewardship responsibilities.
b) a manager’s engagement in greater risk taking.
c) a decision to downplay the negative and focus on the positive.
d) a decision to downplay the positive and focus on the negative.
 
Answer: d
 
Full download link: https://gethighmark.com/test-bank-for-intermediate-accounting-volume-1-13th-canadian-edition-by-donald-e-kieso.shtml
 
Difficulty: Easy
Learning Objective: Understand the financial reporting environment.
Section Reference: Financial Statements and Financial Reporting
CPA: Financial Reporting
CPA: Strategy & Governance
Bloomcode: Knowledge
Feedback: a), b), and c) describe aggressive accounting.
AACSB: Analytic
 
 
24. Which of the following stakeholders do NOT typically rely on the financial statements to make resource allocation decisions?
a) investors
B) creditors
C) analysts
D) standard setters
 
Answer: d
 
Difficulty: Easy
Learning Objective: Understand the financial reporting environment.
Section Reference: Financial Statements and Financial Reporting
CPA: Financial Reporting
CPA: Strategy & Governance
Bloomcode: Knowledge
AACSB: Analytic
 
 
25. Which of the following is/are major factors in the rapidly changing financial reporting environment in Canada?
a) increased demand for accountants and the impact of technology
b) globalization and the unethical actions of accountants
c) the growing number of institutional investors who want more information regarding environmental and social issues
d) increased use of the Internet
 
Answer: c
 
Difficulty: Easy
Learning Objective: Understand the financial reporting environment.
Section Reference: Financial Statements and Financial Reporting
Learning Objective: Discuss some of the challenges and opportunities for accounting.
Section Reference: Challenges and Opportunities for the Accounting Profession
CPA: Financial Reporting
Bloomcode: Knowledge
AACSB: Analytic
 
 
26. The problem of information asymmetry can be reduced by
a) aggressive accounting.
b) accounting standards.
c) adverse selection.
d) only focusing on positive events.
 
Answer: b
 
Difficulty: Easy
Learning Objective: Explain the need for accounting standards and identify the major entities that influence standard setting and financial reporting.
Section Reference: Standard Setting
CPA: Financial Reporting
CPA: Strategy & Governance
Bloomcode: Knowledge
AACSB: Analytic
 
 
27. Which of the following sources of generally accepted accounting principles (GAAP) are NOT developed by the Canadian Accounting Standards Board (AcSB)?
a) Accounting Standards for Private Enterprises (ASPE)
b) International Financial Reporting Standards (IFRS)
c) GAAP for pension plans
d) GAAP for not-for-profit entities
 
Answer: b
 
Difficulty: Easy
Learning Objective: Explain the need for accounting standards and identify the major entities that influence standard setting and financial reporting.
Section Reference: Standard Setting
CPA: Financial Reporting
Bloomcode: Knowledge
AACSB: Analytic
 
 
28. Before 1900, which of the following accurately describes financial reports?
a) They emphasized the need for standardized and increased corporate disclosures.
b) They were for widespread use and distribution.
c) They emphasized solvency and liquidity.
d) None of the above accurately describe financial reports pre-1900.
 
Answer: c
 
Difficulty: Easy
Learning Objective: Explain the need for accounting standards and identify the major entities that influence standard setting and financial reporting.
Section Reference: Standard Setting
CPA: Financial Reporting
Bloomcode: Knowledge
AACSB: Analytic