Accounting Final 4

Question 11 / 1 pts Mod 4.3: The purpose of the Conceptual Framework-Joint Project was to: Correct! develop an overall vision of what financial reporting should accomplish. Correct. The objective of the Conceptual Framework-Joint Project was to develop an overall vision of what financial reporting should accomplish and describe its objectives, its limitations, its component pieces to hopefully lead to the development of consistent accounting standards in the future. create taxation standards to be used both in the US and internationally. develop regulatory guidance that regulators, such as the SEC, could use in developing new enforcement standards. create accounting standards to be used both in the US and internationally. Correct. The objective of the Conceptual Framework-Joint Project was to develop an overall vision of what financial reporting should accomplish and describe its objectives, its limitations, its component pieces to hopefully lead to the development of consistent accounting standards in the future. Question 21 / 1 pts Mod 4.3: What are the names of the two standard-setting bodies that worked together for a period of time to develop a conceptual framework to help accounting standard setters? SEC and FASB IASB and SEC Correct! IASB and FASB Correct. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were the two standard-setting bodies that worked together on the joint Conceptual Framework project. The SEC is the Securities and Exchange Commission. It is the top regulatory of public markets in the US. FASB and IFRS Correct. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were the two standard-setting bodies that worked together on the joint Conceptual Framework project. The SEC is the Securities and Exchange Commission. It is the top regulatory of public markets in the US. Question 30 / 1 pts Mod 4.3: After the Conceptual Framework-Joint Project was abandoned, what accounting standard-setter decided to restart work on a conceptual framework without direct assistance from the other? US GAAP Correct Answer IASB You Answered IFRS Incorrect. International Financial Reporting Standards (IFRS) are the official standards issued by the International Accounting Standards Board (IASB), IFRS is not a standard setter, it is a set of standards. The International Accounting Standards Board (IASB) restarted work on the Conceptual Framework in 2012 without the assistance of the FASB. FASB Incorrect. The International Accounting Standards Board (IASB) restarted work on the Conceptual Framework in 2012 without the assistance of the FASB. See additional explanations above as to why your response is incorrect. Question 40 / 1 pts Mod 4.3: ABC Company's 2013 financial statements indicated that it did in fact pay $20 million to settle a lawsuit from the year 2012 for which it had already created a $20 million liability for in the prior year. The 2013 information indicating that the $20 million was in fact paid represents what fundamental aspect of useful financial information? Correct Answer confirmatory value. faithful representation. You Answered verifiability. Incorrect. Although the payment is "verifiable", verifiability is not a fundamental aspect of useful financial information, it is an enhancing characteristic of useful financial information and therefore is incorrect. Is the payment verifiable? Yes, but it is not a "fundamental" aspect of useful information. predictive value. Incorrect. The 2013 information actually "confirms" information from the 2012 financial statements; therefore, it has "confirmatory value" because the current information is confirming estimates made available in prior information. See additional explanations above. Question 51 / 1 pts Mod 4.3: As described in the Conceptual Framework-Joint Project, the Conceptual Framework is expected to provide direct benefits to (choose all that apply): Correct! world economies Correct. The three primary groups that the conceptual framework is expected to directly benefit are standard setters, world economies, and users of financial information. Correct! accounting standard setters Correct. The three primary groups that the conceptual framework is expected to directly benefit are standard setters, world economies, and users of financial information. Correct! users of financial information Correct. The three primary groups that the conceptual framework is expected to directly benefit are standard setters, world economies, and users of financial information. tax authorities

Question 11 / 1 pts Mod 4.3: What fundamental characteristic of useful financial information would be violated in the following situation? Company A indicated that it owned a $10 million office building when in fact it neither owned it nor leased it. Verifiability Relevance Correct! Faithful representation Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Understandability Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Question 21 / 1 pts Mod 4.3: The management of a company purposely misstated its Net Income by $2 million to make sure that each of them would receive their year-end performance bonuses. Regardless of the size of the company, this $2 million overstatement would likely be: Quantitatively material. Neither Quantitatively material NOR Qualitatively material. Correct! Qualitatively material. Correct. The key point is that management committed fraud to misrepresent the company's financial results to users. This represents a qualitatively material issue (regardless of the size of the company's reported Net Income) that users would want to know about because it could influence their decision whether to invest or lend to the company because it would likely cause users to think "Why would I want to invest in a company where management purposely lies to me?" Correct. The key point is that management committed fraud to misrepresent the company's financial results to users. This represents a qualitatively material issue (regardless of the size of the company's reported Net Income) that users would want to know about because it could influence their decision whether to invest or lend to the company because it would likely cause users to think "Why would I want to invest in a company where management purposely lies to me?" Question 31 / 1 pts Mod 4.3: In order for financial information to be relevant to a decision at hand, it must either be able to: Confirm the past or be consistent with the past. be provided on time and be comparable. Help predict the future or be what it says it is. Correct! help confirm the past or help predict the future. Correct. In order for financial information to be relevant, it must have either predictive value (help predict financial results int he future) or confirmatory value (be able to confirm previously provided information and estimates from the past). Correct. In order for financial information to be relevant, it must have either predictive value (help predict financial results int he future) or confirmatory value (be able to confirm previously provided information and estimates from the past). Question 41 / 1 pts Mod 4.3: ABC Company's 2013 financial statements indicated that it did in fact pay $20 million to settle a lawsuit from the year 2012 for which it had already created a $20 million liability for in the prior year. The 2013 information indicating that the $20 million was in fact paid represents what fundamental aspect of useful financial information? faithful representation. verifiability. Correct! confirmatory value. Correct. The 2013 information actually "confirms" information from the 2012 financial statements; therefore, it has "confirmatory value" because the current information is confirming estimates made available in prior information. predictive value. Correct. The 2013 information actually "confirms" information from the 2012 financial statements; therefore, it has "confirmatory value" because the current information is confirming estimates made available in prior information. Question 51 / 1 pts Mod 4.3: For the year ended December 31, X8, Company A reported $100,000 of Net Income. During the audit of Company A's financial statements, the auditors discovered the following overstatement errors which were all caused by accidental, clerical errors. Enter the numerical value of the the error below which is the most likely to be considered to be "quantitatively" material? If you believe the answer is "None", please just enter a 0. Error A: 46 Error B: 633 Error C: 1,256 Error D: 4,485 Correct! Correct Answer4,485 Correct. In general, in order for an an error to be quantitatively material, it would need to be at least around 2.5% of Net Income. However, materiality is a matter of professional judgment and no specific % terms are required. In this question, the best, and most likely to be material, response was the largest number provided because it was the most "material" and potentially influential when considering what might influence a users' decisions.

Which of the following would best be described as a road map to help the financial reporting world stay on track in developing new and consistent reporting standards?

The Conceptual Framework

The SEC has the ultimate legal authority to set the accounting rules and standards for:

all financial accounting in the United States for public companies.

Question 11 / 1 pts Mod 4.1: The SEC has the ultimate legal authority to set the accounting rules and standards for: all managerial accounting in the United States for private companies. all managerial accounting in the United States. Correct! all financial accounting in the United States for public companies. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. all financial accounting in the United States. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. Question 21 / 1 pts Mod 4.1: A warehouse supervisor needing to receive a report to make certain key decisions within his area of responsibility would most likely rely on: financial accounting reports. Correct! managerial accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. governmental accounting reports. tax accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. Question 31 / 1 pts Mod 4.1: US GAAP plays the most significant role in influencing which of the following types of accounting in the United States? governmental accounting. tax accounting. managerial accounting reports. Correct! financial accounting reports. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. Question 41 / 1 pts Mod 4.2: Choose the term that represents the set of accounting standards (not the standard setter) that have the highest level of legal authority for US-based publicly traded companies from the list provided below? FASB The US Conceptual Framework Correct! US GAAP Correct. US GAAP is the best answer among the four provided. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Any rules set by the SEC for publicly traded companies have even higher authority than the US GAAP produced by the FASB, but, for this question the SEC was not an option, so US GAAP is the best choice of those provided. IASB Correct. GAAP is the best answer among the four provided. It would have been even better to say "US GAAP", but I didn't want to give the answer away. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Question 51 / 1 pts Mod 4.2: If you were preparing the financial statements of a publicly traded company, which of the following represents the accounting standards that you would be required to follow? IASB FASB The US Conceptual Framework Correct! US GAAP Correct. US GAAP, which stands for generally accepted accounting standards, represents the standards that publicly traded companies in the United States are required to follow in the preparation of their financial statements. Correct. US GAAP, which stands for generally accepted accounting standards, represents the standards that publicly traded companies in the United States are required to follow in the preparation of their financial statements. Question 61 / 1 pts Mod 4.2: United States (US) publicly traded companies must prepare and submit US GAAP-compliant general purpose financial statements to the appropriate regulatory authority each year. Which of the following groups has the ultimate authority in the US to decide what US GAAP for publicly traded companies should be? IRS IASB Correct! SEC Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. FASB Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. Question 71 / 1 pts Mod 4.2: Which of the following groups is responsible to PREPARE a company's financial statements in accordance with US GAAP? The company's creditors. The company's external auditor. Correct! The company's management. Correct. Company management is responsible for the preparation of a companies financial statements. The company's investors. Correct. Company management is responsible for the preparation of a companies financial statements. Question 81 / 1 pts Mod 4.3: What fundamental characteristic of useful financial information would be violated in the following situation? Company A indicated that it owned a $10 million office building when in fact it neither owned it nor leased it. Relevance Correct! Faithful representation Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Verifiability Understandability Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Question 91 / 1 pts Mod 4.3: The management of a company purposely misstated its Net Income by $2 million to make sure that each of them would receive their year-end performance bonuses. Regardless of the size of the company, this $2 million overstatement would likely be: Neither Quantitatively material NOR Qualitatively material. Quantitatively material. Correct! Qualitatively material. Correct. The key point is that management committed fraud to misrepresent the company's financial results to users. This represents a qualitatively material issue (regardless of the size of the company's reported Net Income) that users would want to know about because it could influence their decision whether to invest or lend to the company because it would likely cause users to think "Why would I want to invest in a company where management purposely lies to me?" Correct. The key point is that management committed fraud to misrepresent the company's financial results to users. This represents a qualitatively material issue (regardless of the size of the company's reported Net Income) that users would want to know about because it could influence their decision whether to invest or lend to the company because it would likely cause users to think "Why would I want to invest in a company where management purposely lies to me?" Question 101 / 1 pts Mod 4.3: What are the names of the two standard-setting bodies that worked together for a period of time to develop a conceptual framework to help accounting standard setters? FASB and IFRS SEC and FASB Correct! IASB and FASB Correct. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were the two standard-setting bodies that worked together on the joint Conceptual Framework project. The SEC is the Securities and Exchange Commission. It is the top regulatory of public markets in the US. IASB and SEC Correct. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were the two standard-setting bodies that worked together on the joint Conceptual Framework project. The SEC is the Securities and Exchange Commission. It is the top regulatory of public markets in the US.

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US GAAP plays the most significant role in influencing which of the following types of accounting in the United States?

financial accounting reports.

A warehouse supervisor needing to receive a report to make certain key decisions within his area of responsibility would most likely rely on:

managerial accounting reports.

Which of the following types of accounting would most likely be required to follow US GAAP

Financial Accounting

Which of the following types of accounting would most likely be required to follow US GAAP?

Financial Accounting

Which of the following types of accounting have developed a conceptual framework to provide theoretical guidance to the future creation of accounting standards?

Financial accounting.

Question 11 / 1 pts Mod 4.1: Which of the following types of accounting would most likely be required to follow US GAAP? Managerial Accounting Cash Accounting Correct! Financial Accounting Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Tax Accounting Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Question 21 / 1 pts Mod 4.1: US GAAP plays the most significant role in influencing which of the following types of accounting in the United States? managerial accounting reports. governmental accounting. tax accounting. Correct! financial accounting reports. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. Question 31 / 1 pts Mod 4.1: Which of the following types of accounting have developed a conceptual framework to provide theoretical guidance to the future creation of accounting standards? Tax accounting. Governmental accounting. Managerial accounting. Correct! Financial accounting. Correct. Financial accounting does have a conceptual framework which is perceived as being useful in providing guidance in the creation of new accounting standards. Correct. Financial accounting does have a conceptual framework which is perceived as being useful in providing guidance in the creation of new accounting standards. Question 40 / 1 pts Mod 4.1: A warehouse supervisor needing to receive a report to make certain key decisions within his area of responsibility would most likely rely on: You Answered financial accounting reports. Incorrect. Financial accounting reports would be of insufficient detail to provide a warehouse supervisor the information needed to make key decisions related to his area of responsibility. tax accounting reports. Correct Answer managerial accounting reports. governmental accounting reports. Incorrect. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. Question 50 / 1 pts Mod 4.1: Which of the following would best be described as a road map to help the financial reporting world stay on track in developing new and consistent reporting standards? IASB You Answered US GAAP Incorrect. US Generally Accepted Accounting Principles (US GAAP) are the standards, they would not be considered to be a road map for the standards. FASB Correct Answer The Conceptual Framework

Mod 4.1: Which of the following types of accounting would most likely be required to follow US GAAP? Managerial Accounting Tax Accounting Correct! Financial Accounting Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Cash Accounting Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Question 21 / 1 pts Mod 4.1: Which of the following types of accounting have developed a conceptual framework to provide theoretical guidance to the future creation of accounting standards? Tax accounting. Managerial accounting. Governmental accounting. Correct! Financial accounting. Correct. Financial accounting does have a conceptual framework which is perceived as being useful in providing guidance in the creation of new accounting standards. Correct. Financial accounting does have a conceptual framework which is perceived as being useful in providing guidance in the creation of new accounting standards. Question 31 / 1 pts Mod 4.1: Which of the following would best be described as a road map to help the financial reporting world stay on track in developing new and consistent reporting standards? IASB US GAAP FASB Correct! The Conceptual Framework Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. Question 40 / 1 pts Mod 4.1: The SEC has the ultimate legal authority to set the accounting rules and standards for: all financial accounting in the United States. You Answered all managerial accounting in the United States for private companies. Incorrect. The SEC has no legal authority to set the accounting rules and standards of financial accounting for private companies in the United States and has no legal authority to set the accounting rules and standards of managerial accounting for either public or private companies anywhere. all managerial accounting in the United States. Correct Answer all financial accounting in the United States for public companies. Incorrect. The SEC has no legal authority to set the accounting rules and standards of financial accounting for private companies in the United States and has no legal authority to set the accounting rules and standards of managerial accounting for either public or private companies anywhere. Question 51 / 1 pts Mod 4.1: A warehouse supervisor needing to receive a report to make certain key decisions within his area of responsibility would most likely rely on: Correct! managerial accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. governmental accounting reports. tax accounting reports. financial accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization.

Question 11 / 1 pts Mod 4.2: US GAAP helps company management by: specifying how they are to audit their general purpose financial statements. Correct! providing the rules and guidance for how to prepare the general purpose financial statements. Correct. The key purpose of US GAAP is to provide company management a standard set of rules and guidance on how to prepare its general purpose financial statements. explaining how to increase the company's profitability. indicating how they are to compute their federal income taxes. Correct. See explanations above. Question 20 / 1 pts Mod 4.2: United States (US) publicly traded companies must prepare and submit US GAAP-compliant general purpose financial statements to the appropriate regulatory authority each year. Which of the following groups has the ultimate authority in the US to decide what US GAAP for publicly traded companies should be? IRS Correct Answer SEC FASB You Answered IASB Incorrect. The International Accounting Standards Board(IASB) has created the International Financial Reporting Standards (IFRS) that are used by companies in over 100 countries around the world, but the IASB has zero authority for creating US GAAP for publicly traded companies in the US. Incorrect. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. Question 30 / 1 pts Mod 4.2: If you were preparing the financial statements of a publicly traded company, which of the following represents the accounting standards that you would be required to follow? IASB Correct Answer US GAAP You Answered The US Conceptual Framework Incorrect. Although the conceptual framework can be referred to when deciding what the best approach is, businesses are not required to adhere to the conceptual framework when preparing their financial reports because it is not considered to be part of GAAP. FASB Incorrect. See the specific definition of the item you chose. Question 40 / 1 pts Mod 4.2: Private companies in the United States (US) may some times choose to prepare US GAAP-compliant general purpose financial statements, or be required to prepare them based on the demands of their creditors or investors. Which of the following groups has the ultimate authority in the US to decide what US GAAP for private companies is? You Answered IASB Incorrect. The International Accounting Standards Board (IASB) sets International Financial Reporting Standards (IFRS) for companies and countries that choose to adopt such standards. It has no authority to set accounting standards for private companies in the United States. SEC Better Business Bureau Correct Answer FASB Incorrect. The Financial Accounting Standards Board (FASB) has the ultimate authority for setting US GAAP for private companies in the US. Question 50 / 1 pts Mod 4.2: Choose the term that represents the set of accounting standards (not the standard setter) that have the highest level of legal authority for US-based publicly traded companies from the list provided below? Correct Answer US GAAP IASB You Answered The US Conceptual Framework Incorrect. The Conceptual Framework has no legal authority. It simply can provide guidance and structure to the setting of accounting standards and the preparation of financial reports, but reference to it is not required. FASB

Question 10 / 1 pts Mod 4.2: Choose the term that represents the set of accounting standards (not the standard setter) that have the highest level of legal authority for US-based publicly traded companies from the list provided below? You Answered FASB Incorrect. The Financial Accounting Standards Board (FASB) sets US accounting standards under the watchful eye of the SEC, but the FASB itself is not a set of standards. The US Conceptual Framework IASB Correct Answer US GAAP Incorrect. GAAP is the best answer among the four provided. It would have been even better to say "US GAAP", but I didn't want to give the answer away. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Question 21 / 1 pts Mod 4.2: Match the words on the left with the best corresponding description on the right. Correct!FASB Primary standard-setting authority for US GAAP for private companies in the US. Correct!SEC Ultimate standard-setting authority for US GAAP for public companies in the US. Correct!IASB Standard-setting board for international financial reporting standards adopted for use around the world. Correct. Well done. Question 31 / 1 pts Mod 4.2: Match the terms on the left with the best definition on the right. Correct!US Generally Accepted Accounting Principles (US GAAP) The standards and rules that businesses must follow when preparing their financial statements for external users. Correct!Financial Accounting Standards Board (FASB) The acting accounting standard setter in the United States. Correct!International Accounting Standards Board (IASB) The acting accounting standard setter that produces standards for countries throughout the world. Question 40 / 1 pts Mod 4.2: Private companies in the United States (US) may some times choose to prepare US GAAP-compliant general purpose financial statements, or be required to prepare them based on the demands of their creditors or investors. Which of the following groups has the ultimate authority in the US to decide what US GAAP for private companies is? Better Business Bureau You Answered SEC Incorrect. The Securities and Exchange Commission (SEC) has not accounting standard setting authority for private companies. It only has such authority over public companies. Correct Answer FASB IASB Incorrect. The Financial Accounting Standards Board (FASB) has the ultimate authority for setting US GAAP for private companies in the US. Question 51 / 1 pts Mod 4.2: If you were preparing the financial statements of a publicly traded company, which of the following represents the accounting standards that you would be required to follow? Correct! US GAAP Correct. US GAAP, which stands for generally accepted accounting standards, represents the standards that publicly traded companies in the United States are required to follow in the preparation of their financial statements. The US Conceptual Framework IASB FASB

Mod 4.1: Which of the following types of accounting would most likely be required to follow US GAAP? Tax Accounting Cash Accounting Correct! Financial Accounting Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Managerial Accounting Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Question 21 / 1 pts Mod 4.1: US GAAP plays the most significant role in influencing which of the following types of accounting in the United States? tax accounting. governmental accounting. Correct! financial accounting reports. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. managerial accounting reports. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. Question 31 / 1 pts Mod 4.1: The SEC has the ultimate legal authority to set the accounting rules and standards for: all managerial accounting in the United States. all managerial accounting in the United States for private companies. Correct! all financial accounting in the United States for public companies. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. all financial accounting in the United States. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. Question 41 / 1 pts Mod 4.1: Which of the following would best be described as a road map to help the financial reporting world stay on track in developing new and consistent reporting standards? US GAAP FASB IASB Correct! The Conceptual Framework Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. Question 51 / 1 pts Mod 4.1: Which of the following types of accounting have developed a conceptual framework to provide theoretical guidance to the future creation of accounting standards? Tax accounting. Governmental accounting. Managerial accounting. Correct! Financial accounting.

Question 11 / 1 pts Mod 4.1: Which of the following types of accounting would most likely be required to follow US GAAP? Tax Accounting Cash Accounting Managerial Accounting Correct! Financial Accounting Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Correct. Financial accounting has to do with the financial reporting that is provided to external investors and lenders and is defined by US GAAP, which are the generally accepted accounting principles accepted in the US as created by the FASB and its preceding standard-setting bodies. Question 21 / 1 pts Mod 4.1: A warehouse supervisor needing to receive a report to make certain key decisions within his area of responsibility would most likely rely on: Correct! managerial accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. financial accounting reports. governmental accounting reports. tax accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. Question 31 / 1 pts Mod 4.1: The SEC has the ultimate legal authority to set the accounting rules and standards for: all financial accounting in the United States. all managerial accounting in the United States. all managerial accounting in the United States for private companies. Correct! all financial accounting in the United States for public companies. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. Question 41 / 1 pts Mod 4.1: Which of the following types of accounting have developed a conceptual framework to provide theoretical guidance to the future creation of accounting standards? Governmental accounting. Correct! Financial accounting. Correct. Financial accounting does have a conceptual framework which is perceived as being useful in providing guidance in the creation of new accounting standards. Tax accounting. Managerial accounting. Correct. Financial accounting does have a conceptual framework which is perceived as being useful in providing guidance in the creation of new accounting standards. Question 51 / 1 pts Mod 4.1: Which of the following would best be described as a road map to help the financial reporting world stay on track in developing new and consistent reporting standards? US GAAP FASB IASB Correct! The Conceptual Framework

Question 10 / 1 pts Mod 4.1: The SEC has the ultimate legal authority to set the accounting rules and standards for: all managerial accounting in the United States for private companies. Correct Answer all financial accounting in the United States for public companies. all managerial accounting in the United States. You Answered all financial accounting in the United States. Incorrect. The SEC has no legal authority to set the accounting rules and standards of financial accounting for private companies in the United States and has no legal authority to set the accounting rules and standards of managerial accounting for either public or private companies anywhere. Incorrect. The SEC has no legal authority to set the accounting rules and standards of financial accounting for private companies in the United States and has no legal authority to set the accounting rules and standards of managerial accounting for either public or private companies anywhere. Question 21 / 1 pts Mod 4.1: Which of the following would best be described as a road map to help the financial reporting world stay on track in developing new and consistent reporting standards? IASB Correct! The Conceptual Framework Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. US GAAP FASB Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. Question 31 / 1 pts Mod 4.1: A warehouse supervisor needing to receive a report to make certain key decisions within his area of responsibility would most likely rely on: Correct! managerial accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. governmental accounting reports. tax accounting reports. financial accounting reports. Correct. Warehouse supervisors have and request whatever "managerial accounting reports" they need in order to make the necessary decisions to efficiently and effectively manager the warehouse cycle. Managerial accounting reports are the best source of information for all types of managers within an organization. Question 41 / 1 pts Mod 4.2: US GAAP is: United States Generally Accepted Auditing Principles United States Generally Allowed Analytical Principles Correct! United States Generally Accepted Accounting Principles Correct. US GAAP stands for United States Generally Accepted Accounting Principles. They are the accounting standards and guidance that private companies are expected to follow when producing the general purpose financial statements. Public companies also follow this private company US GAAP with modifications as made by the SEC. United States Gophers Already Ate Pineapples Correct. US GAAP stands for United States Generally Accepted Accounting Principles. They are the accounting standards and guidance that private companies are expected to follow when producing the general purpose financial statements. Public companies also follow this private company US GAAP with modifications as made by the SEC. Question 51 / 1 pts Mod 4.2: US GAAP helps company management by: specifying how they are to audit their general purpose financial statements. explaining how to increase the company's profitability. indicating how they are to compute their federal income taxes. Correct! providing the rules and guidance for how to prepare the general purpose financial statements. Correct. The key purpose of US GAAP is to provide company management a standard set of rules and guidance on how to prepare its general purpose financial statements. Correct. See explanations above. Question 61 / 1 pts Mod 4.2: If you were preparing the financial statements of a publicly traded company, which of the following represents the accounting standards that you would be required to follow? FASB Correct! US GAAP Correct. US GAAP, which stands for generally accepted accounting standards, represents the standards that publicly traded companies in the United States are required to follow in the preparation of their financial statements. The US Conceptual Framework IASB Correct. US GAAP, which stands for generally accepted accounting standards, represents the standards that publicly traded companies in the United States are required to follow in the preparation of their financial statements. Question 71 / 1 pts Mod 4.2: Choose the term that represents the set of accounting standards (not the standard setter) that have the highest level of legal authority for US-based publicly traded companies from the list provided below? The US Conceptual Framework Correct! US GAAP Correct. US GAAP is the best answer among the four provided. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Any rules set by the SEC for publicly traded companies have even higher authority than the US GAAP produced by the FASB, but, for this question the SEC was not an option, so US GAAP is the best choice of those provided. IASB FASB Correct. GAAP is the best answer among the four provided. It would have been even better to say "US GAAP", but I didn't want to give the answer away. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Question 80 / 1 pts Mod 4.3: The purpose of the Conceptual Framework-Joint Project was to: develop regulatory guidance that regulators, such as the SEC, could use in developing new enforcement standards. create taxation standards to be used both in the US and internationally. Correct Answer develop an overall vision of what financial reporting should accomplish. You Answered create accounting standards to be used both in the US and internationally. Incorrect. The conceptual framework in no way creates new accounting standards, but rather provides guidance to the standard-setters who do create standards. The objective of the Conceptual Framework-Joint Project was to develop an overall vision of what financial reporting should accomplish and describe its objectives, its limitations, its component pieces to hopefully lead to the development of consistent accounting standards in the future. Incorrect. The objective of the Conceptual Framework-Joint Project was to develop an overall vision of what financial reporting should accomplish and describe its objectives, its limitations, its component pieces to hopefully lead to the development of consistent accounting standards in the future. See further explanations above to help you understand why your response was incorrect. Question 91 / 1 pts Mod 4.3: After the Conceptual Framework-Joint Project was abandoned, what accounting standard-setter decided to restart work on a conceptual framework without direct assistance from the other? Correct! IASB Correct. The International Accounting Standards Board (IASB) restarted work on the Conceptual Framework in 2012 without the assistance of the FASB. IFRS US GAAP FASB Correct. The International Accounting Standards Board (IASB) restarted work on the Conceptual Framework in 2012 without the assistance of the FASB. Question 101 / 1 pts Mod 4.3: What are the names of the two standard-setting bodies that worked together for a period of time to develop a conceptual framework to help accounting standard setters? FASB and IFRS SEC and FASB Correct! IASB and FASB Correct. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were the two standard-setting bodies that worked together on the joint Conceptual Framework project. The SEC is the Securities and Exchange Commission. It is the top regulatory of public markets in the US. IASB and SEC

Question 11 / 1 pts Mod 4.1: Which of the following would best be described as a road map to help the financial reporting world stay on track in developing new and consistent reporting standards? IASB US GAAP FASB Correct! The Conceptual Framework Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. Correct. The Conceptual Framework can be described as a useful, but currently unenforceable, road map for adding standard setters and preparers of financial reports. Question 21 / 1 pts Mod 4.1: The SEC has the ultimate legal authority to set the accounting rules and standards for: Correct! all financial accounting in the United States for public companies. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. all financial accounting in the United States. all managerial accounting in the United States. all managerial accounting in the United States for private companies. Correct. The SEC has the ultimate legal authority to set financial accounting rules and standards (i.e. US GAAP) for public companies in the United States. Question 31 / 1 pts Mod 4.1: US GAAP plays the most significant role in influencing which of the following types of accounting in the United States? tax accounting. governmental accounting. Correct! financial accounting reports. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. managerial accounting reports. Correct. US GAAP is the best source of rules and standards for the preparation of financial accounting reports in the US. Question 41 / 1 pts Mod 4.2: Match the terms on the left with the best definition on the right. Correct!US Generally Accepted Accounting Principles (US GAAP) The standards and rules that businesses must follow when preparing their financial statements for external users. Correct!Financial Accounting Standards Board (FASB) The acting accounting standard setter in the United States. Correct!International Accounting Standards Board (IASB) The acting accounting standard setter that produces standards for countries throughout the world. Question 51 / 1 pts Mod 4.2: United States (US) publicly traded companies must prepare and submit US GAAP-compliant general purpose financial statements to the appropriate regulatory authority each year. Which of the following groups has the ultimate authority in the US to decide what US GAAP for publicly traded companies should be? Correct! SEC Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. FASB IRS IASB Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. Question 61 / 1 pts Mod 4.2: Click on all of the TRUE statements below. Correct! US GAAP helps improve the comparability of US companies that prepare their financial statements according to follow US GAAP. Correct. Because US publicly companies are required to use US GAAP and many private US companies also follow US GAAP, their financial statements are able to be more easily compared to each other. That is why they are comparable. US GAAP and International Financial Reporting Standards (IFRS) are actually identical and have now converged to become one single set of standards. Correct! The SEC has the final authority as to what US GAAP will be for publicly traded companies in the US. Correct. The SEC is the final rule maker and enforcer of US GAAP for publicly traded companies in the United States. The IASB is responsible for creating US GAAP for private US Companies. Correct. Excellent work. See explanations above. Question 70.5 / 1 pts Mod 4.2: When US GAAP was codified it helped (choose all that apply): eliminate the need for the FASB. Correct Answer eliminate contradictions between authoritative sources in defining what would be classified as official US GAAP. Correct! company management more quickly locate official US GAAP on specific topics. Correct. In the past, US GAAP was a conglomeration of standards from a variety of potentially authoritative sources. When a challenging accounting issue surfaced, it was sometimes difficult and time consuming to find what US GAAP was in relation to a given topic. Now that US GAAP is codified, it is very quick and easy to look up the standards in the single, accounting standards codification and find the answer. This likely saves users 1,000's of hours a year. eliminate the need for accountants. Question 81 / 1 pts Mod 4.3: ABC Company's 2013 financial statements indicated that it did in fact pay $20 million to settle a lawsuit from the year 2012 for which it had already created a $20 million liability for in the prior year. The 2013 information indicating that the $20 million was in fact paid represents what fundamental aspect of useful financial information? predictive value. verifiability. Correct! confirmatory value. Correct. The 2013 information actually "confirms" information from the 2012 financial statements; therefore, it has "confirmatory value" because the current information is confirming estimates made available in prior information. faithful representation. Correct. The 2013 information actually "confirms" information from the 2012 financial statements; therefore, it has "confirmatory value" because the current information is confirming estimates made available in prior information. Question 91 / 1 pts Mod 4.3: What fundamental characteristic of useful financial information would be violated in the following situation? Company A indicated that it owned a $10 million office building when in fact it neither owned it nor leased it. Verifiability Relevance Understandability Correct! Faithful representation Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Question 101 / 1 pts Mod 4.3: Per Chapter 3 of the US's Conceptual Framework the fundamental qualitative characteristics of useful financial information are: Correct! Faithful representation and Relevance Correct. The two key qualitative characteristics of useful financial reporting information are relevance and faithful representation. Consistency and verifiability Relevance and Reliability Faithful representation and comparability

Question 11 / 1 pts Mod 4.2: United States (US) publicly traded companies must prepare and submit US GAAP-compliant general purpose financial statements to the appropriate regulatory authority each year. Which of the following groups has the ultimate authority in the US to decide what US GAAP for publicly traded companies should be? IRS Correct! SEC Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. FASB IASB Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. Question 21 / 1 pts Mod 4.2: If you were preparing the financial statements of a publicly traded company, which of the following represents the accounting standards that you would be required to follow? IASB Correct! US GAAP Correct. US GAAP, which stands for generally accepted accounting standards, represents the standards that publicly traded companies in the United States are required to follow in the preparation of their financial statements. The US Conceptual Framework FASB Correct. US GAAP, which stands for generally accepted accounting standards, represents the standards that publicly traded companies in the United States are required to follow in the preparation of their financial statements. Question 31 / 1 pts Mod 4.2: Private companies in the United States (US) may some times choose to prepare US GAAP-compliant general purpose financial statements, or be required to prepare them based on the demands of their creditors or investors. Which of the following groups has the ultimate authority in the US to decide what US GAAP for private companies is? IASB Better Business Bureau SEC Correct! FASB Correct. The Financial Accounting Standards Board (FASB) has the ultimate authority for setting US GAAP for private companies in the US. Correct. The Financial Accounting Standards Board (FASB) has the ultimate authority for setting US GAAP for private companies in the US. Question 41 / 1 pts Mod 4.2: Match the words on the left with the best corresponding description on the right. Correct!FASB Primary standard-setting authority for US GAAP for private companies in the US. Correct!SEC Ultimate standard-setting authority for US GAAP for public companies in the US. Correct!IASB Standard-setting board for international financial reporting standards adopted for use around the world. Correct. Well done. Question 50.33 / 1 pts Mod 4.2: Match the terms on the left with the best definition on the right. You AnsweredUS Generally Accepted Accounting Principles (US GAAP) The acting accounting standard setter in the United States. The standards and rules that businesses must follow when preparing their financial statements for external users. You AnsweredFinancial Accounting Standards Board (FASB) The standards and rules that businesses must follow when preparing their financial statements for external users. The acting accounting standard setter in the United States. Correct!International Accounting Standards Board (IASB) The acting accounting standard setter that produces standards for countries throughout the world.

Question 11 / 1 pts Mod 4.2: United States (US) publicly traded companies must prepare and submit US GAAP-compliant general purpose financial statements to the appropriate regulatory authority each year. Which of the following groups has the ultimate authority in the US to decide what US GAAP for publicly traded companies should be? IRS Correct! SEC Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. FASB IASB Correct. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. Question 21 / 1 pts Mod 4.2: Private companies in the United States (US) may some times choose to prepare US GAAP-compliant general purpose financial statements, or be required to prepare them based on the demands of their creditors or investors. Which of the following groups has the ultimate authority in the US to decide what US GAAP for private companies is? Correct! FASB Correct. The Financial Accounting Standards Board (FASB) has the ultimate authority for setting US GAAP for private companies in the US. IASB Better Business Bureau SEC Correct. The Financial Accounting Standards Board (FASB) has the ultimate authority for setting US GAAP for private companies in the US. Question 31 / 1 pts Mod 4.2: Which of the following groups is responsible to PREPARE a company's financial statements in accordance with US GAAP? The company's external auditor. Correct! The company's management. Correct. Company management is responsible for the preparation of a companies financial statements. The company's creditors. The company's investors. Correct. Company management is responsible for the preparation of a companies financial statements. Question 41 / 1 pts Mod 4.2: How does US GAAP benefit investors and creditors (choose all that apply)? Correct! When investors and creditors understand the US GAAP that companies use, they are better able to interpret the financial statements and make better investment and credit decisions. Correct. When investors and creditors understand the US GAAP that companies use, they are better able to interpret the financial statements and make better investment and credit decisions. Just like our example of gasoline prices, if you don't know the difference between a gallon and a liter, you will make poor gasoline purchase decisions. Likewise if you don't know the difference between US GAAP and Korean GAAP (i.e. K-IFRS), you will likely make poor investment and credit decisions because you simply don't know what you are buying or lending to. Correct! When similar companies both use US GAAP, investors and creditors are better able to compare their financial results and make better investment and credit decisions. Correct. When like companies both use US GAAP, investors and creditors are better able to compare their financial results and make better investment and credit decisions. This ability to compare like companies using the same standard can help highlight areas in which one company is more valuable or has better profitability prospects for the future. When companies use US GAAP, their investors and creditors are not required to pay taxes. When companies use US GAAP, they pay a fee to the FASB which is then transferred to the company's investors and creditors. Correct. See explanations above. Question 51 / 1 pts Mod 4.2: Choose the term that represents the set of accounting standards (not the standard setter) that have the highest level of legal authority for US-based publicly traded companies from the list provided below? Correct! US GAAP Correct. US GAAP is the best answer among the four provided. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Any rules set by the SEC for publicly traded companies have even higher authority than the US GAAP produced by the FASB, but, for this question the SEC was not an option, so US GAAP is the best choice of those provided. The US Conceptual Framework IASB FASB

Question 10 / 1 pts Mod 4.2: Click on all of the TRUE statements below. The IASB is responsible for creating US GAAP for private US Companies. Correct Answer US GAAP helps improve the comparability of US companies that prepare their financial statements according to follow US GAAP. Correct! The SEC has the final authority as to what US GAAP will be for publicly traded companies in the US. Correct. The SEC is the final rule maker and enforcer of US GAAP for publicly traded companies in the United States. You Answered US GAAP and International Financial Reporting Standards (IFRS) are actually identical and have now converged to become one single set of standards. Incorrect. Although the Financial Accounting Standards Board (the FASB) and the International Accounting Standards Board (IASB) have been working on converging US GAAP and IFRS into a like set of standards, we are still very far off from the two sets of standards being the same. Incorrect. See explanations above. Question 20.5 / 1 pts Mod 4.2: How does US GAAP benefit investors and creditors (choose all that apply)? Correct! When investors and creditors understand the US GAAP that companies use, they are better able to interpret the financial statements and make better investment and credit decisions. Correct. When investors and creditors understand the US GAAP that companies use, they are better able to interpret the financial statements and make better investment and credit decisions. Just like our example of gasoline prices, if you don't know the difference between a gallon and a liter, you will make poor gasoline purchase decisions. Likewise if you don't know the difference between US GAAP and Korean GAAP (i.e. K-IFRS), you will likely make poor investment and credit decisions because you simply don't know what you are buying or lending to. When companies use US GAAP, their investors and creditors are not required to pay taxes. Correct Answer When similar companies both use US GAAP, investors and creditors are better able to compare their financial results and make better investment and credit decisions. When companies use US GAAP, they pay a fee to the FASB which is then transferred to the company's investors and creditors. Question 30 / 1 pts Mod 4.2: Which of the following groups is responsible to PREPARE a company's financial statements in accordance with US GAAP? The company's investors. You Answered The company's external auditor. Incorrect. The company's external auditor is responsible for AUDITING a company's US GAAP financial statements. The external auditors are NOT allowed to prepare a company's financial statements because they would then lack the level of independence expected of an external auditor. The company's creditors. Correct Answer The company's management. Incorrect. Company management is responsible for the preparation of a companies financial statements. Question 40 / 1 pts Mod 4.2: Choose the term that represents the set of accounting standards (not the standard setter) that have the highest level of legal authority for US-based publicly traded companies from the list provided below? You Answered FASB Incorrect. The Financial Accounting Standards Board (FASB) sets US accounting standards under the watchful eye of the SEC, but the FASB itself is not a set of standards. Correct Answer US GAAP IASB The US Conceptual Framework Incorrect. GAAP is the best answer among the four provided. It would have been even better to say "US GAAP", but I didn't want to give the answer away. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Question 51 / 1 pts Mod 4.2: US GAAP is: United States Generally Allowed Analytical Principles United States Generally Accepted Auditing Principles Correct! United States Generally Accepted Accounting Principles

Question 11 / 1 pts Mod 4.2: Which of the following groups is responsible to PREPARE a company's financial statements in accordance with US GAAP? The company's investors. Correct! The company's management. Correct. Company management is responsible for the preparation of a companies financial statements. The company's creditors. The company's external auditor. Correct. Company management is responsible for the preparation of a companies financial statements. Question 20.33 / 1 pts Mod 4.2: Match the terms on the left with the best definition on the right. You AnsweredUS Generally Accepted Accounting Principles (US GAAP) The acting accounting standard setter in the United States. The standards and rules that businesses must follow when preparing their financial statements for external users. You AnsweredFinancial Accounting Standards Board (FASB) The standards and rules that businesses must follow when preparing their financial statements for external users. The acting accounting standard setter in the United States. Correct!International Accounting Standards Board (IASB) The acting accounting standard setter that produces standards for countries throughout the world. Question 30 / 1 pts Mod 4.2: United States (US) publicly traded companies must prepare and submit US GAAP-compliant general purpose financial statements to the appropriate regulatory authority each year. Which of the following groups has the ultimate authority in the US to decide what US GAAP for publicly traded companies should be? IASB IRS Correct Answer SEC You Answered FASB Incorrect. The Financial Accounting Standards Board (FASB) does have the ultimate authority of the US GAAP used by private companies, but the SEC retains the US GAAP standard-setting authority for public companies. Incorrect. The US Securities and Exchange Commission (SEC) has the ultimate standard-setting authority for the US GAAP that publicly-traded companies in the US must follow. The FASB helps to create the US GAAP, but all FASB standards must be approved by the SEC. Question 41 / 1 pts Mod 4.2: Choose the term that represents the set of accounting standards (not the standard setter) that have the highest level of legal authority for US-based publicly traded companies from the list provided below? FASB IASB Correct! US GAAP Correct. US GAAP is the best answer among the four provided. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Any rules set by the SEC for publicly traded companies have even higher authority than the US GAAP produced by the FASB, but, for this question the SEC was not an option, so US GAAP is the best choice of those provided. The US Conceptual Framework Correct. GAAP is the best answer among the four provided. It would have been even better to say "US GAAP", but I didn't want to give the answer away. US GAAP represents the approved and enforceable generally accepted accounting principles that publicly traded companies in the US must follow when submitting their financial reports to the SEC. Question 50 / 1 pts Mod 4.2: If you were preparing the financial statements of a publicly traded company, which of the following represents the accounting standards that you would be required to follow? IASB Correct Answer US GAAP You Answered FASB Incorrect. The FASB is the Financial Accounting Standards Board which has received the delegated authority from the SEC to create accounting standards for publicly traded companies in the United States. The US Conceptual Framework

Question 11 / 1 pts Mod 4.3: Per Chapter 3 of the US's Conceptual Framework the fundamental qualitative characteristics of useful financial information are: Relevance and Reliability Consistency and verifiability Correct! Faithful representation and Relevance Correct. The two key qualitative characteristics of useful financial reporting information are relevance and faithful representation. Faithful representation and comparability Correct. The two key qualitative characteristics of useful financial reporting information are relevance and faithful representation. Question 20 / 1 pts Mod 4.3: For the year ended December 31, X8, Company A reported $100,000 of Net Income. During the audit of Company A's financial statements, the auditors discovered the following overstatement errors which were all caused by accidental, clerical errors. Enter the numerical value of the the error below which is the most likely to be considered to be "quantitatively" material? If you believe the answer is "None", please just enter a 0. Error A: 66 Error B: 706 Error C: 1,147 Error D: 4,681 You Answered Correct Answer4,681 Incorrect. In general, in order for an an error to be quantitatively material, it would need to be at least around 2.5% of Net Income. However, materiality is a matter of professional judgment and no specific % terms are required. In this question, the best, and most likely to be material, response was the largest number provided because it was the most "material" and potentially influential when considering what might influence a users' decisions. Question 30 / 1 pts Mod 4.3: All of the information that investors and creditors need to make wise investing and lending or other credit decisions is completely found within the financial statements that are issued to comply with: Correct Answer None of the other responses are completely correct. the FASB Accounting Standards Codification US GAAP You Answered the Conceptual Framework Incorrect. There is no such thing as financial statements based on the Conceptual Framework because the Framework is not a set of standards, it is a set of overriding objectives and theories that standard-setters can refer to when creating new standards. Incorrect. None of the other responses are perfectly correct because none of them contain ALL of the information needed to make investing and lending decisions. Question 40 / 1 pts Mod 4.3: ABC Company's 2013 financial statements indicated that it did in fact pay $20 million to settle a lawsuit from the year 2012 for which it had already created a $20 million liability for in the prior year. The 2013 information indicating that the $20 million was in fact paid represents what fundamental aspect of useful financial information? Correct Answer confirmatory value. faithful representation. You Answered verifiability. Incorrect. Although the payment is "verifiable", verifiability is not a fundamental aspect of useful financial information, it is an enhancing characteristic of useful financial information and therefore is incorrect. Is the payment verifiable? Yes, but it is not a "fundamental" aspect of useful information. predictive value. Incorrect. The 2013 information actually "confirms" information from the 2012 financial statements; therefore, it has "confirmatory value" because the current information is confirming estimates made available in prior information. See additional explanations above. Question 50 / 1 pts Mod 4.3: The management of a company purposely misstated its Net Income by $2 million to make sure that each of them would receive their year-end performance bonuses. Regardless of the size of the company, this $2 million overstatement would likely be: You Answered Neither Quantitatively material NOR Qualitatively material. Incorrect. The key point is that management committed fraud to misrepresent the company's financial results to users. This represents a qualitatively material issue (regardless of the size of the company's reported Net Income) that users would want to know about because it could influence their decision whether to invest or lend to the company because it would likely cause users to think "Why would I want to invest in a company where management purposely lies to me?" Although a $2 million misstatement could possibly be Quantitatively material for many companies, there are some large companies for which a $2 million misstatement would not even affect the companies reported numbers because they report in billions and a $2 million misstatement is just a rounding difference when it comes to billions. Correct Answer Qualitatively material. Quantitatively material.

Question 11 / 1 pts Mod 4.3: After the Conceptual Framework-Joint Project was abandoned, what accounting standard-setter decided to restart work on a conceptual framework without direct assistance from the other? FASB Correct! IASB Correct. The International Accounting Standards Board (IASB) restarted work on the Conceptual Framework in 2012 without the assistance of the FASB. US GAAP IFRS Correct. The International Accounting Standards Board (IASB) restarted work on the Conceptual Framework in 2012 without the assistance of the FASB. Question 21 / 1 pts Mod 4.3: What fundamental characteristic of useful financial information would be violated in the following situation? Company A indicated that it owned a $10 million office building when in fact it neither owned it nor leased it. Understandability Correct! Faithful representation Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Relevance Verifiability Correct. This information is NOT a faithful representation because it is NOT what it says it is, therefore, the fundamental characteristic of useful financial information is violated and the information is not useful. Question 31 / 1 pts Mod 4.3: As described in the Conceptual Framework-Joint Project, the Conceptual Framework is expected to provide direct benefits to (choose all that apply): tax authorities Correct! world economies Correct. The three primary groups that the conceptual framework is expected to directly benefit are standard setters, world economies, and users of financial information. Correct! accounting standard setters Correct. The three primary groups that the conceptual framework is expected to directly benefit are standard setters, world economies, and users of financial information. Correct! users of financial information Correct. The three primary groups that the conceptual framework is expected to directly benefit are standard setters, world economies, and users of financial information. Correct. The three primary groups that the conceptual framework is expected to directly benefit are standard setters, world economies, and users of financial information. Question 41 / 1 pts Mod 4.3: What are the names of the two standard-setting bodies that worked together for a period of time to develop a conceptual framework to help accounting standard setters? SEC and FASB FASB and IFRS Correct! IASB and FASB Correct. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were the two standard-setting bodies that worked together on the joint Conceptual Framework project. The SEC is the Securities and Exchange Commission. It is the top regulatory of public markets in the US. IASB and SEC Correct. The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) were the two standard-setting bodies that worked together on the joint Conceptual Framework project. The SEC is the Securities and Exchange Commission. It is the top regulatory of public markets in the US. Question 51 / 1 pts Mod 4.3: For the year ended December 31, X8, Company A reported $100,000 of Net Income. During the audit of Company A's financial statements, the auditors discovered the following overstatement errors which were all caused by accidental, clerical errors. Enter the numerical value of the the error below which is the most likely to be considered to be "quantitatively" material? If you believe the answer is "None", please just enter a 0. Error A: 71 Error B: 889 Error C: 1,018 Error D: 4,830 Correct! Correct Answer4,830