pronouncements on accounting practice issued by the Committee on Accounting Procedure between 1939 and 1959; since 1964 they have been recognized as accepted accounting practice unless superseded in part or in whole by an opinion of the APB or an FASB standard
question
Opinions of the accounting principles board
answer
1959 through 1973 and, unless superseded by FASB Statements, are recognized as accepted practice and constitute the requirements to be followed by all business enterprises
question
Statements of the Financial Accounting Standards Board
answer
currently represent the accounting profession's authoritative pronouncements on financial accounting and reporting practices.
question
Accounting standard-setters use the following process in establishing accounting standards:
a. Research, exposure draft, discussion paper, standard.
b. Discussion paper, research, exposure draft, standard.
d. Research, discussion paper, exposure draft, standard.
answer
Research, discussion paper, exposure draft, standard
question
GAAP is comprised of:
a. FASB standards, interpretations, and concepts statements.
b. FASB financial standards.
d. any accounting guidance included in the FASB Codification.
answer
d. any accounting guidance included in the FASB Codification.
question
The authoritative status of the conceptual framework is as follows.
a. It is used when there is no standard or interpretation related to the reporting issues under consideration.
b. It is not as authoritative as a standard but takes precedence over any interpretation related to the reporting issue.
d. It has no authoritative status.
answer
a. It is used when there is no standard or interpretation related to the reporting issues under consideration.
question
The objective of financial reporting places most emphasis on:
a. reporting to capital providers.
b. reporting on stewardship.
c. providing specific guidance related to specific needs.
d. providing information to individuals who are experts in the field.
answer
reporting to capital providers.
question
General-purpose financial statements are prepared primarily for:
a. internal users.
b. external users.
c. auditors.
d. government regulators.
answer
external users.
question
Economic consequences of accounting standard-setting means:
a. standard-setters must give first priority to ensuring that companies do not suffer any adverse effect as a result of a new standard.
c. the objective of financial reporting should be politically motivated to ensure acceptance by the general public.
d. accounting standards can have detrimental impacts on the wealth levels of the providers of financial information.
answer
accounting standards can have detrimental impacts on the wealth levels of the providers of financial information.
question
The expectations gap is:
a. what financial information management provides and what users want.
b. what the public thinks accountants should do and what accountants think they can do.
c. what the governmental agencies want from standard-setting and what the standard-setters provide.
answer
what the public thinks accountants should do and what accountants think they can do.
question
The objective of financial statements
answer
to "provide financial information about the reporting entity that is useful to present and potential equity investors, lenders and creditors in decisions about providing resources to the entity"
question
Quality of information that permits users to identify similarities in and differences between two sets of economic phenomena.
answer
comparability
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