Which of the following statements pertaining to Accounting is correct? A. Accounting is a fixed science. B. The double-entry system of accounting has been used for centuries C. The objective of external financial statements is to communicate the economic effects only of completed transactions and other events in the entity for management decision-making D. General purpose financial statements were developed primarily because all outside party users have the same information needs

Which of the following statements pertaining to Accounting is correct? A. Accounting is a fixed science. B. The double-entry system of accounting has been used for centuries C. The objective of external financial statements is to communicate the economic effects only of completed transactions and other events in the entity for management decision-making D. General purpose financial statements were developed primarily because all outside party users have the same information needs

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter2: Financial Reporting: Its Conceptual Framework

Section: Chapter Questions

Problem 6MC

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Indicate whether each statement describes financial accounting or managerial accounting. The information is directed at external users who are making decisions pertaining to investing, extending credit, and other decisions. The principal users are the organizations managers. The key focus is on the entity as a whole. The rules and principles are very flexible. The information gathered is usually available after an independent audit has been completed.
Which of the following is considered a constraint on useful information by Statement of Financial Accounting Concepts No. 8? a. benefits costs b. conservatism c. timeliness d. verifiability
The primary objective of financial accounting is to provide general purpose financial statements to help external users analyze and interpret an organization's activities. Group of answer choices True False
The accounting process generates financial reports forboth internal and external users. Describe some of the specific groups of internal and external users
Which of the following is not an objective of the conceptual framework? O a. Provides guidance for transactions not addressed in existing accounting standards O b. Enables implementation of one universal set of accounting standards O c. Enables consistency of qualitative characteristics in financial reports O d. Addresses the common needs of users of financial reports
The following characteristics refer to financial accounting, excepta, Provides information to external usersb. Emphasizes on objective datac. Has no externally imposed standardsd. Generates general purpose financial statements.
Which of the following is TRUE of both financial accounting and management accounting? a. The emphasis is on timeliness and flexibility b. They use the information provided by the cost accounting system c. It generates general-purpose financial statements d. They are regulated by accounting standards and statute
Indicate which of the following statements are moredescriptive of management accounting than of financialaccounting. (More than one answer may be appropriate.)a. Recognized standards are used for presentation. b. Information is tailored to the needs of individual deci-sion makers.
Which of the following is not a part of the functions of the accounting system? Select one: O a. Reporting the results of operations during a reporting period O b. Classifying and summarizing the effects of the transactions on the accounting elements O c. Analyzing and recording the business transactions of the enterprise. O d. Preparing financial statements that are favorable to the data-users.
Which of the following statements correctly distinguishes between management accounting and financial accounting? O A. Financial accounting is oriented toward the future. O B. Financial accounting is primarily concerned with providing information for internal users. OC. Management accounting is oriented more toward the planning and control aspects of management. OD. Management accounting reports on the whole organization.
Which of the following is most associated with financial accounting reports? a.can be prepared for the entity or segment b.prepared in accordance with GAAP c.can be prepared periodically, or as needed d.can have both objective and subjective information
Discuss the four basic Assumptions that underline the financial Accounting Structures with example. b) Match the qualitative characteristics below with the following statements. I. Relevance VI. Comparability II.Faithful representation VII.Completeness III. Predictive value VIII.Neutrality IV.Confirmatory value IX.Timeliness V. Free from error X. Understandability (i) Quality of information that permits users to identify similarities in and differences between two sets of economic phenomena. (ii) Having information available to users before it loses its capacity to influence decisions. (iii) Information about an economic phenomenon that has value as an input to the processes used by capital providers to form their own expectations about the future.