AKM Chapter 1 - FINANCIAL REPORTING AND ACCOUNTING STANDARDS

The financial statements most frequently provided include all of the following except the

• statement of financial position.

• income statement.

• statement of cash flows.

• statement of retained earnings.

Non-financial measurements include all of the following except

• backlog information

• customer satisfaction indexes.

• reject rates on goods purchased

• All of the choices are non-financial measurements

Significant financial reporting issues facing global financial reporting and efficient capital allocation include all of the following except

• How to provide backward-looking information.

• How to report nonfinancial measures such as customer satisfaction.

• How to provide forward-looking information

• How to provide real-time financial statement information

The international financial reporting environment includes challenges in financial reporting including all of the following except

• Political environment.

• Expectations gap.

• Decision-usefulness

• Ethics.

Which of the following is an ethical concern of accountants?

• Earnings manipulation.

• Conservative accounting.

• Industry practices.

• None of the above.

What is "expectation gap"?

• The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do.

• The difference between what the public thinks the accountant should do and what Congress says the accountant should do.

• The difference between what the public thinks the accountant should do and what the accountant thinks they can do.

• The difference between what the accountant should do and what the Courts say the accountant should be doing.

What is a possible danger if politics plays too big a role in developing IFRS?

• Financial reporting standards that are issued that are not truly generally accepted.

• Individuals may influence the standards.

• User groups become active.

• The IASB delegates its authority to elected officials.

Which of the following is not a major challenge facing the accounting profession?

• Nonfinancial measurements.

• Timeliness.

• Accounting for hard assets.

• Forward-looking information.

Which of the following has the highest authoritative support?

• International Financial Reporting Standards.

• International Accounting Standards.

• Interpretations of the IFRIC.

• Framework for Financial Reporting.

Accrual accounting is used because

• cash flows are considered less important.

• it provides a better indication of ability to generate cash flows than the cash basis.

• it recognizes revenues when cash is received and expenses when cash is paid.

• None of these answers are correct