Intermediate Accounting - Assessment 1er Taller

The Accounting Equation is...

• A - L = OE

• A + L = OE

• A = L + OE

• A AND C

Financial accounting is the information accumulation, processing, and communication system designed to meet the decision-making information needs of external users.

• True

• False

Companies are not required to produce which of the following in their annual report?

• the statement of cash flow

• the balance sheet

• the statement of changes in stockholders' equity

• all of the above are required

Materiality is determined:

• by judgment

• as a proportion of net income

• using quantitative guidelines issued by the FASB

• all of the above

The elements of the statement of cash flow are: operating cash flows, investing cash flows, and marketing cash flows.

• True

• False

Financial accounting information is:

• prepared to meet the decision-making information needs of internal users

• presented in published financial statements

• determined on a case-by-case basis by the management of each company

• seldom useful in the decision-making of investors in primary markets.

External users of a company's reports do not include:

• investors

• government regulators

• management

• bank loan officers

Many companies present a statement of changes in stockholder's equity as a major financial statement, in addition to a balance sheet, income statement, and statement of cash flows.

• True

• False

The FASB restricts public input during the development of new accounting standards in order to enhance efficiency and preserve the Board's independence.

• True

• False

The use of the same accounting principle from period to period, such as always using the straight-line method of depreciation, is preferable because of:

• materiality

• verifiability

• neutrality

• consistency