Chapter 1

Question 1

The European Union requires publicly traded member country companies to use

Answer 1

IFRS (International Financial Reporting Standards)

Question 2

International Financial Reporting Standards (IFRS) are issued by the:

Answer 2

IASB (International Accounting Standards Board

Question 3

True or False?

Foreign companies listed on U.S. exchanges are required to issue statements that comply with U.S. GAAP.

Answer 3

False

Question 4

Managerial accounting is the process used to

Answer 4

identify, measure, analyze and communicate financial information needed by management to plan, control and evaluate a company’s operations.

Question 5

Which of the following is the objective of financial reporting?

Answer 5

Providing information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors is the objective of financial reporting.

Question 6

GAAP stands for

Answer 6

Generally Accepted Accounting Principles

Question 7

Expectations gap

Answer 7

exists between what the public thinks accountants should do and what accountants think they should do

Question 8

The conceptual framework is:

Answer 8

foundation for building coherent acctg standards and rules