Chapter 1 practice questions Flashcards
Financial accounting is the area of accounting that emphasizes reporting to
Creditors and Investors
Management accounting is the area of accounting that emphasizes
developing accounting information for use within the company
A major difference between the Financial Accounting Standards Board (FASB) and its predecessor, the Accounting Principles Board (APB), is
all members of the FASB serve full time, are paid a salary, and are independent of any public or private enterprises.
Primary responsibility for GAAP and public reporting currently rests with the
SEC
Who gave the SEC the power to establish accounting principles for corporations whose stock is sold and traded to the general public?
Congress
Once the FASB has established an accounting standard, the
a. standard is continually reviewed to see if modification is necessary.
he International Accounting Standards Board was formed to
develop worldwide accounting standards.
The United States Securities and Exchange Commission
has recognized IASB standards as an acceptable alternative to U.S. GAAP. Has no jurisdiction in the United States over foreign companies listing their shares on U.S. stock exchanges
The assumed continuation of a business entity in the absence of evidence to the contrary is an example of the accounting concept of
going concern
Accountants prepare financial statements at arbitrary points in time during a company’s lifetime in accordance with the accounting concept of
Accounting periods
Primary responsibility for the preparation of financial statements in accordance with generally accepted accounting principles rests with
Management
The singularly unique function performed by certified public accountants in United States is
The attest Function
The singularly unique function performed by certified public accountants in United States is
Board of Directors
The responsibility to review the work of the accountants and issue opinions as to the fairness of the financial statements rests with
The external Auditor
Which of the following is a characteristic of the Financial Accounting Standards Board?
The FASB is composed of 7 full time members
