Acc 311 Ch1 Test Bank

In: Business and Management

Submitted By yugiohyugi007
Words 17634
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Chapter 01
Environment and Theoretical Structure of Financial Accounting

True / False Questions 1. | The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises. True False | 2. | Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow. True False | 3. | The FASB is currently the public-sector organization responsible for setting accounting standards in the United States. True False | 4. | The FASB's due process invites various interested parties to indicate their opinions about whether financial accounting standards should be changed. True False | 5. | Accounting for stock-based compensation is an area in which the FASB has received little political interference. True False | 6. | The Public Reform and Investor Protection Act of 2002 (Sarbanes-Oxley) changed the entity responsible for setting auditing standards in the United States. True False | 7. | A rules-based approach to standard setting stresses professional judgment as opposed to following a list of rules. True False | 8. | Under federal securities laws, the SEC has the authority to set accounting standards in the United States. True False | 9. | The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's auditors. True False | 10. | Auditors play an important role in the resource allocation process by adding credibility to financial statements. True False | 11. | The purpose of the conceptual framework is to provide a structure and framework for a consistent set of GAAP. True False | 12. | In the United States the…...

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