7. F 14. T 21. F 28. F 35. T
Financial Reporting and Accounting Standards
1 - 13
MULTIPLE CHOICE
36. The financial statements most frequently provided include all of the following except the
a. statement of financial position.
b. income statement.
c. statement of cash flows.
d. statement of retained earnings.
Ans: d
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None
37. Which of the following is representative of managerial accounting?
a. Users of the financial information include investors.
b. Management uses the financial information to plan and control a company’s operations.
c. The financial reports are used by both internal and external parties.
d. Government agencies are likely to use the financial information.
Ans: b
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None
38. Which of the following represents a form of communication through financial reporting but
not through financial statements?
a. Statement of financial position.
b. President's letter.
c. Income statement.
d. Notes to financial statements.
Ans: b
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
test bank for Intermediate Accounting: IFRS Edition,4e
1 - 14
IMA: None
P 39.
The process of identifying, measuring, analyzing, and communicating financial information
needed by management to plan, evaluate, and control an organization’s operations is called
a. financial accounting.
b. managerial accounting.
c. tax accounting.
d. auditing.
Ans: b
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None
Financial Reporting and Accounting Standards
1 - 15
40. The major financial statements include all of the following except:
a. Statement of financial position.
b. Statement of changes in financial position.
c. Statement of comprehensive income.
d. Statement of changes in equity.
Ans: b
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None
41. Which of the following statements is true?
a. Over 149 jurisdictions require or permit use of International Financial Reporting
Standards (IFRS).
b. Canada is the most significant holdout from use of International Financial Reporting
Standards (IFRS).
c. Nearly 50% of investors in the United States own foreign securities, either directly or
through funds.
d. To facilitate efficient capital allocation, investors need relevant information stated in a
common currency.
Ans: a
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None
42. How does accounting help the capital allocation process attract investment capital?
a. Provides timely, relevant information.
b. Encourages innovation.
c. Promotes productivity.
d. Fosters changes in equity.
Ans: a
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
test bank for Intermediate Accounting: IFRS Edition,4e
1 - 16
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None
43. An effective capital allocation process
a. promotes productivity.
b. encourages innovation.
c. provides an efficient market for buying and selling securities.
d. All of these answers are correct.
Ans: d
LO:1.1
Bloom: K
Difficulty: Easy
Min: 2-4
AACSB: Analytic
AICPA BB: Strategic/Critical Thinking
AICPA FN: Measurement
AICPA PC: Problem Solving and Decision-making
IMA: None
44. Which of the following are elements of a single, widely accepted set of high-quality
accounting standards?
a. Common delivery systems and common high-quality auditing standards.
b. Common laws and common application of accounting standards.
c. Common boards of directors and common enforcement.