Financial accounting is the process
Financial accounting
is the process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, evaluate, and control a
company's operations.
·
F
Financial statements
are the principal means through which a company communicates its financial
information to those outside it.
·
T
Users of financial
reports of a company use the information provided by these reports to make
their capital allocation decisions.
·
T
An effective process
of capital allocation promotes productivity and provides an efficient market
for buying and selling securities and obtaining and granting credit.
·
T
The objective of
financial reporting is to report the plans made by a company to improve the
productivity of its employees.
·
F
Investors are
interested in financial reporting because it provides information that is
useful for making decisions.
·
T
Users of financial
accounting statements have both coinciding and conflicting needs for
information of various types.
·
T
The Securities and
Exchange Commission appointed the Committee on Accounting Procedure.
·
F
The passage of a new
FASB Accounting Standards Update requires the support of five of the seven
board members.
·
F
Statements of
Financial Accounting Concepts set forth fundamental objectives and concepts
that are used by the FASB in developing future standards of financial
accounting and reporting.
·
T
The AICPA created the
Accounting Principles Board in 1959.
·
T
The FASB's
Codification creates a new set of GAAP.
·
F
The AICPA's Code of
Professional Conduct requires that members prepare financial statements in
accordance with generally accepted accounting principles.
·
T
GAAP is a product of
careful logic or empirical findings and is not influenced by political action.
·
F
The Public Company
Accounting Oversight Board has oversight and enforcement authority and
establishes auditing and independence standards and rules.
·
T
The expectations gap
is due to the difference between what the public thinks accountants should do and
what accountants think they can do.
·
T
Financial reports in
the early 21st century did not provide any information about a company's soft
assets (intangibles).
·
F
Accounting standards
are now less likely to require the recording or disclosure of fair value
information.
·
F
U.S. companies that
list overseas are required to use International Financial Reporting Standards,
issued by the International Accounting Standards Board.
·
F
Ethical issues in
financial accounting are governed by the AICPA.
·
F
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