PROBLEM 1-4 MULTIPLE CHOICE (IAA)
1. The International Accounting Standards Board was formed
a. To enforce IFRS in foreign countries
b. To develop a single set of high quality IFRS
c. To establish accounting standards for multinational entities
d. To develop accounting standards for countries that do not have their own standard-
setting bodies
2. The IASB publishes standards called
a. International Accounting Standards
b. Financial Reporting Standards
c. International financial reporting standards
d. Statements of Financial Accounting Standards
3. The IASB employs a “due process” system which
a. Is an efficient system for collecting dues from members.
b. Enables interested parties to express their views on issues under consideration.
c. Identifies the accounting issues that are the most important.
d. Requires that all CPAs must receive a copy of IFRS.
4. What is “due process” in the context of standard-setting by IASB?
a. IASB operates in full view of the public.
b. Public hearings are held on proposed standards.
c. Interested parties can make their views known.
d. All of these are part of due process in standard-setting.
5. IFRIC Interpretations issued by IASB
a. Are considered authoritative and must be followed.
b. Cover newly identified financial reporting issues not specifically addressed.
c. Cover issues where unsatisfactory or conflicting interpretations have developed.
d. All of these are rue about IFRIC Interpretations.
PROBLEM 1-5 MULTIPLE CHOICE (IAA)
1. Financial accounting is concerned with
a. General purpose reports on financial position and financial performance.
b. Specialized reports for inventory management and control.
c. Specialized reports for income tax computation and recognition.
d. General purpose reports on changes in share prices and future estimate of market
position.
2. Financial accounting can be broadly defined as the area of accounting that prepares
a. General purpose financial statements to be used by parties internal to the entity.
b. Financial statements to be used by investors.
c. General purpose financial statements to be used by parties both internal and external to
the entity.
d. Financial statements to be used primarily by management.
3. Financial accounting is the area of accounting that emphasizes reporting to
a. Management
b. Regulatory bodies
c. Internal auditors
d. Creditors and investors
4. Managerial accounting is the area of accounting that emphasizes
a. Reporting financial information to external users
b. Reporting to the SEC
c. Combining accounting knowledge with an expertise in data processing
d. Developing accounting information for use within an entity
5. A basic feature of financial accounting is
a. Direct measurement of economic resources and obligations and changes in them in
terms of money and sociological and psychological impact.
b. Direct measurement of economic resources and obligations and changes in them in
terms of money
c. Direct measurement of economic resources and obligations and changes in them in
terms of money and sociological impact.
d. Direct measurement of economic resources and obligations and changes in them in
terms of money and psychological impact.
PROBLEM 1-6 MULTIPLE CHOICE (IAA)
1. Generally accepted accounting principles
a. Are accounting adaptations based on the law of economic science.
b. Derive their credibility and authority from legal rulings and court precedents.
c. Derive their credibility and authority from the national government through the financial
reporting section of the SEC.
d. Derive their credibility and authority from general recognition and acceptance by the
accountancy profession.
2. Which of the following statements best describes generally accepted accounting principles?
a. The accounting principles have been formulated in the public sector.
b. The accounting principles have been developed on the basis of such factors as usage and
practical necessity.
c. The accounting principles are the same as laws within our legal system.
d. The accounting principle does not apply to small and medium sized entities.
3. Proper application of accounting principles is most dependent upon
a. Existence of specific guidelines
b. Oversight of regulatory bodies
c. External audit function
d. Professional judgment of the CPA
