Intermediate Accounting 9th Edition By Spiceland – Test Bank

Exam Bank For Intermediate Accounting 9th Edition By Spiceland

Chapter 1: Environment and Theoretical Framework of Monetary Accounting
1–1
True/False Questions
1. Providing relevant financial data to external parties is the primary function of financial accounting.
Answer: True
Learning Level: Easy
Learning Objective: 01-01
Topic Area: Financial accounting environment and reporting
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Critical Thinking

2. Accrual accounting aims to measure revenues and expenses occurring in accounting periods to align with net operating cash flow.
Answer: False
Learning Level: Easy
Learning Objective: 01-02
Topic Area: Cash versus accrual accounting
Blooms: Understand
AACSB: Reflective thinking
AICPA: FN Measurement

3. The responsibility of setting accounting standards in the United States lies with the FASB.
Answer: False
Learning Level: Easy
Learning Objective: 01-03
Topic Area: Development of accounting and reporting standards
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Legal

4. The FASB’s due process involves various stakeholders expressing their views on potential changes to financial accounting standards.
Answer: True
Learning Level: Easy
Learning Objective: 01-04
Topic Area: GAAP – Standard-setting process
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Legal

5. The issue of accounting for stock-based compensation has faced significant political influences at the FASB.
Chapter 1: Environment and Theoretical Framework of Monetary Accounting
1–2
Answer: False
Learning Level: Easy
Learning Objective: 01-04
Topic Area: GAAP – Standard-setting process
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Legal

6. The Sarbanes-Oxley Act of 2002 altered the organization responsible for establishing auditing standards in the United States.
Answer: True
Learning Level: Easy
Learning Objective: 01-05
Topic Area: Promoting high-quality financial reporting
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Legal

7. A principles-based approach to standard-setting emphasizes professional judgment over rigid rules.
Answer: False
Learning Level: Easy
Learning Objective: 01-05
Topic Area: Promoting high-quality financial reporting
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Critical Thinking

8. Under federal securities laws, the SEC has the power to establish accounting standards within the United States.
Answer: True
Learning Level: Easy
Learning Objective: 01-03
Topic Area: Development of accounting and reporting standards
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Legal

9. The primary responsibility for applying GAAP when communicating with investors and creditors through financial statements rests with a company’s auditors.
Answer: False
Learning Level: Easy
Learning Objective: 01-05
Topic Area: Promoting high-quality financial reporting
Chapter 1: Environment and Theoretical Framework of Monetary Accounting
1–3
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Critical Thinking

10. Auditors contribute credibility to financial statements, playing a vital role in the resource allocation process.
Answer: True
Learning Level: Easy
Learning Objective: 01-05
Topic Area: Promoting high-quality financial reporting
Blooms: Understand
AACSB: Reflective thinking
AICPA: BB Critical Thinking

11. The conceptual framework aims to establish a consistent set of GAAP by providing a structure and framework.
Answer: True
Learning Level: Easy
Learning Objective: 01-06
Topic Area: Conceptual framework – Purpose
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Critical Thinking

12. In the United States, GAAP is indicated by the conceptual framework when a specific accounting standard is not applicable.
Answer: False
Learning Level: Easy
Learning Objective: 01-06
Topic Area: Conceptual framework – Purpose
Blooms: Recall
AACSB: Reflective thinking
AICPA: BB Critical Thinking

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