ACCTG 330 Exam 1 Quiz Questions

FASB and IASB are currently working together to do which of the following? A.) Converge US GAAP and IFRS B.) Convert US GAAP to IFRS C.) Convert US auditing standards to international auditing standards D.) There is not sufficient information provided to answer this question

A.) Converge US GAAP and IFRS

To be in good form, a balance sheet should be broken down into specific sections. Which of the following is the most correct order for the assets section on a balance sheet to appear? A.) Current Assets, Long-term Investments, PPE, Intangibles B.) Current Assets, PPE, Intangibles, Long-term Investments C.) Current Assets, Long-term Investments, Intangibles, PPE D.) Current Assets, PPE, Long-term Investments, Intangibles

A.) Current Assets, Long-term Investments, PPE, Intangibles

A statement of retained earnings in good form will include which of the following elements? A.) Net Income B.) Current Assets C.) Total Equity D.) Dividends Paid

A.) Net Income

Which of the following is NOT a purpose of the balance sheet? A.) to summarize information about the operating activities of a business B.) to present information about assets, liabilities, and equity as a specific point in time C.) to provide information about liquidity, solvency, and financial flexibility D.) to help investors assess risk and predict future cash flows

A.) to summarize information about the operating activities of a business

According to US GAAP, which of the following is NOT one of the elements that must be included on an income statement in good form? A.) EPS B.) For Year Ended, December 31, 20XX C.) As of December 31, 20XX D.) Company Name

C.) As of December 31, 20XX

Which of the following groups has legal authority to set GAAP in the U.S.? A.) The APB B.) The AICPA C.) The SEC D.) The FASB

C.) The SEC

Why must the income statement be prepared before any of the other financial statements? A.) because EPS has to be reported to shareholders in a timely fashion to avoid a drop in stock price B.) because net income is the most important number in accounting C.) because you need net income to finish the other financial statements D.) because it is a tradition

C.) because you need net income to finish the other financial statements

The accounting standards codification (ASC) provided a significant benefit to accountants. Which of the following best describes that benefit? A.) the ASC contains all old GAAP B.) the ASC summarizes all of the ethical standards published by the AICPA C.) the ASC contains all current GAAP D.) the ASC contains the auditing standards

C.) the ASC contains all current GAAP

Which of the following is commonly considered to be the more important number in accounting? A.) Net Assets B.) EPS C.) Cash Flows from Operations D.) Net Income

B.) EPS

Which of the following is NOT considered a weakness of the income statement? A.) it changes when different methods are chosen B.) it doesn't provide cash flow information C.) it doesn't include numbers that can't be estimated D.) it changes based on the estimates used

B.) it doesn't provide cash flow information

Which of the following is one of the benefits of the IFRS Statement of Position over the U.S. GAAP Balance Sheet? A.) it has no specific requirements at all B.) it is more flexible C.) it provides more information D.) it requires an extensive list of specific disclosures

B.) it is more flexible

Each of the following choices lists four steps from the accounting cycle. Which of these sets of steps correctly follows the order we discussed in the lectures for one fiscal period? A.) identify transactions, make journal entries, create financial statements, make the trial balance B.) make closing entries, make an adjusted trail balance, create the financial statements, identify transactions C.) make journal entries, post entries, create the financial statements, make closing entries D.) identify transactions, make the adjusting entries, create the trial balance, create the financial statements

C.)make journal entries, post entries, create the financial statements, make closing entries

Which of the following is typically true about accounting information published AFTER the end of the accounting period? In answering this question, assume that the company has a traditional audit performed between the end of the period and the publication date. A.) as more time passes, the information becomes more comparable B.) as more time passes, the information becomes more useful C.) as more time passes, the information becomes more relevant D.) as more time passes, the information becomes more reliable

D.) as more time passes, the information becomes more reliable

Which of the following equations was NOT one of the key equations in our discussion of the accounting cycle? A.) debits=credits B.) beginning balance + additions - subtractions = ending balance C.) assets= liabilities + equity D.) depreciation= (historical cost - salvage value)/useful life

D.) depreciation= (historical cost - salvage value)/useful life

Which of the following is NOT one of FASB's three objectives for financial accounting? A.) provide information that helps users assess future cash flows B.) provide information that shows that resources of a firm and the claims on them C.) provide information that is useful for making decisions D.) provide information that is understandable to rational decision makers

D.) provide information that is understandable to rational decision makers

Which of the following is one of FASB's formal purposes for the statement of cash flows? A.) to help investors assess risk and predict future cash flows B.) to provide information about liquidity, solvency, and financial flexibility C.) to summarize information about the operating activities of a business D.) to summarize operating, investing, and financing activities

D.) to summarize operating, investing, and financing activities

Which of the following statements is true about the cash flow pattern of a company in the decline phase of the life cycle of a firm? A.) it has positive cash flows from operating activities B.) it has negative cash flows from investing activities C.) it has positive cash flows from financing activities D.) we would need more information to answer this question

D.) we would need more information to answer this question