ACC 563 Week 5 Midterm Exam – Strayer NEW
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Week 5 Midterm Exam: Chapters 1
Through 7
Chapter 1
Multiple Choice:
- Which of the following bodies has the ultimate
authority to issue accounting pronouncements in the United States?
a.
Securities
and Exchange Commission
b.
Financial
Accounting Standards Board
c.
International
Accounting Standards Committee
d.
Internal
Revenue Service
Answer
- What historical evidence of the business
operations of the private estate of Apollonius was discovered early
inthe20th century?
a. The Iliad
c. The Zenon papyri
d. Pacioli’s work, Summa de Arithmetica Geometria Proportioni
et Proportionalita,
Answer
- Who has been given credit or developing the
double-entry system of bookkeeping?
a.
Francis
Wheat
b.
Fra
Luca Pacioli
c.
A.
C. Littleton
d.
William
Paton
Answer
- Which of the following was not a criticism of
the development of accounting standards by the Accounting Principles
Board?
a. The independence of the members
of the APB. The individuals serving on the board had full-time responsibilities
elsewhere that might influence their views of certain issues.
b. The structure of the board. The
largest eight public accounting firms (at that time) were automatically awarded
one member, and there were usually five or six other public accountants on the
APB.
c. Harmonization. The accounting
standards developed were dissimilar to those developed by the International
Accounting Standards Committee.
d. Response time. The emerging
accounting problems were not being investigated and solved quickly enough by
the part-time members.
Answer
- Which of the following is the professional
organization of university accounting professors?
a.
American
Accounting Association
b.
American
Institute of Certified Public Accountants
c.
American
Institute of Accountants
d.
Financial
Executives Institute
Answer
- What controversy originally highlighted the
need for standard setting groups to have more authority?
a.
Accounting
for stock options
b.
Accounting
for derivatives
c.
Accounting
for marketable securities
d.
Accounting
for the investment tax credit
Answer
- Which of the following committees recommended
abolishing the Accounting Principles Board and replacing it with the
Financial Accounting Board ?
a.
Wheat
b.
Cohen
c.
Trueblood
d.
Anderson
Answer
- Which of the following is a public sector
accounting standard setter?
a.
FASB
b.
SEC
c.
APB
d.
CAP
Answer
- Which of the following types of pronouncements
now establishes generally accepted accounting principles?
a.
Statements
of Concepts
b.
Statements
of Financial Accounting Standards
c.
APB
Opinions
d.
Accounting
Standards Updates
Answer
- Which of the following types of pronouncements
are intended to establish the objectives and concepts that the FASB will
use in developing standards of financial accounting and reporting?
a.
Statements
of Concepts
b.
Statements
of Financial Accounting Standards
c.
APB
Opinions
d.
Accounting
Standards Updates
Answer
- Which of the following is not a consequence of
the standards overload problem to small businesses?
a.
If
a small business omits a GAAP requirement from audited financial statements, a
qualified or adverse opinion may be rendered.
b.
Small
businesses do not need to keep financial records
c.
The
cost of complying with GAAP requirements may cause a small business to forgo
the development of other, more relevant information.
d.
Small
CPA firms that audit smaller companies must keep up to date on all the same
requirements as large international firms, but they cannot afford the
specialists that are available on a centralized basis in the large firms.
Answer
- Some accountants maintain that accounting
standards are as much a product of political action as they are of careful
logic or empirical findings. This belief is an example of the concept of
a.
Standard
setting as apolitical process
b.
Standards
overload
c.
Economic
consequences
d.
The
role of ethics in accounting
Answer
13. T he impact of accounting reports
on various segments of our economic society is the definition of the concept of
a.
Standard
setting as apolitical process
b.
Standards
overload
c.
Economic
consequences
d.
The
role of ethics in accounting
Answer
14. Considering and understanding how business
decisions affect the financial statements is
a. The sole responsibility of the Securities and
Exchange Commission.
b. Provided in the auditor’s report.
c. Referred to as an economic consequence
perspective.
d.
Interpreted strictly by the company’s
suppliers.
Answer
15.
Which
of the following is a source of nonauthoritative accounting guidance and
literature?
a.
Financial Accounting Standards Board
Statements
b.
Financial
Accounting Standards Board Interpretations
c.
Financial
Accounting Standards Board Technical Bulletins
d.
Practices
that are widely recognized and prevalent either generally or in the industry
Answer
16.
Which
of the following companies was involved in an accounting failure that caused
the public accounting firm Arthur Andersen to gout of business?
a.
Goldman
Sachs
b.
Wachovia
c.
Enron
d.
AIG
Answer
Essay
1. What
is the difference between normative and positive theory?
2. Why
is the development of a general theory of accounting important
3. Discuss
the evolution of accounting during the 1930s.
4. Discuss
the evolution of the three private sector accenting standard setting
organizations.
5. What
were the purposes of the Wheat and Trueblood committees?
6. What
was the purpose of the GAAP Hierarchy?
7. What
were the four types of pronouncements issued by the FASB?
8. Discuss
why standard setting may be viewed as a political process.
9. Define
the following terms
10. Discuss
the evolution of the phrase “generally accepted accounting principles.
11. What
controversy caused the AICPA to issue Rule 203 that requires companies to use
GAAP when issuing financial statements?
12. Discuss
the FASB ASC including the reasons for its adoption and the FASB’s goals in
developing it..
13. Discuss
the role of ethics in accounting.
14. What
is a special purpose entity and how do they work?
15. How
did the Sarbanes-Oxley Act change the way the FASB is funded?
16. Discuss
the objectives of the International Accounting Standards Board.
Chapter 2
Multiple Choice
1.
Which early accounting theorist was among the first to express the view that
all changes in the value of assets and liabilities should be reflected in the
financial statements ?\
a. A.
C. Littleton
b. John
Canning
c. William
Paton
d. DR
Scott
Answer
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