1. A problem arising from equal information is called information asymmetry.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.1 - LO: 1.1
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
2. The demand for relevant and reliable financial information stems from the needs of the internal and external
stakeholders.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.1 - LO: 1.1
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
3. The mission of the Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient
markets, and assist in the formation of capital.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.2 - LO: 1.2
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: RememberingPage 1Chapter 1

4. The SEC uses its authority to establish accounting standards, while also enforcing regulations on companies,
exchanges, and investors.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.2 - LO: 1.2
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
5. The Financial Accounting Standards Board (FASB) began in 1973 after the AICPA phased out the Accounting
Principles Board (APB).
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.3 - LO: 1.3
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
6.
FASB’s Emerging Issues Task Force assists and advises the FASB by identifying and addressing timely but more
narrow and specific standard setting issues.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.3 - LO: 1.3
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: RememberingPage 2Chapter 1

7. The Codification is set up as a system of levels starting with sections, topics, and subtopics.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.4 - LO: 1.4
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
8. The Codification was established to assist in reducing the time necessary to research an accounting issue and improve
the ability to utilize accounting information that conforms with GAAP.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.4 - LO: 1.4
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
9. The convergence project between the IASB and GAAP was initiated in 2002 when the two boards entered into the
“Northward Agreement”.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.5 - LO: 1.5
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: RememberingPage 3Chapter 1

10. A potential issue facing the convergence project is that many companies have entered into contracts based upon U.S.
GAAP financial reporting; many of these contracts will have to be renegotiated using IFRS which potentially could
cause some companies more harm than good.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.5 - LO: 1.5
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
11. The balance sheet is a snapshot of a company’s financial position at a particular date.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.6 - LO: 1.6
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: Remembering
12. The statement of shareholders' equity reports the effects from the recognition or valuation of certain asset or liability
transactions that change Accumulated Other Comprehensive Income.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ACCT.WHAL.16.1.6 - LO: 1.6
NATIONAL STANDARDS: United States - BUSPROG: Reflective Thinking
LOCAL STANDARDS: United States - OH - Default City - AICPA: FN-Decision Modeling
KEYWORDS: Bloom's: RememberingPage 4Chapter 1

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Test Bank For Intermediate Accounting: Reporting and Analysis, 3rd Edition

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