Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Question
Chapter 1, Problem 7MC
To determine
To Identify: The statement which is true in regards with GAAP.
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Which of the following regarding GAAP is true?a. GAAP is an abbreviation for generally appliedaccounting principles.b. Changes in GAAP always affect the amount of incomereported by a company.c. GAAP is the abbreviation for generally acceptedaccounting principles.d. Changes to GAAP must be approved by the SenateFinance Committee.
Generally accepted accounting principles (GA P) has been developed to:
Select one:
A. interprets and enforces the tax laws that specify the rules for determining taxable income
B. issues accounting standards for state and local governments
C. provide guidelines for financial accounting
D. to set and enforce accounting practices for companies.
the conceptual framework for financial reporting states that the purpose of financial reporting is to a. provide information to management accountants for decision making b. support and enhance transparent financial reporting by governments and other public sector entities c. provide tax authorities with information to be used for tax assessment d. none of the above
Chapter 1 Solutions
Fundamentals Of Financial Accounting
Ch. 1 - Define accounting.Ch. 1 - Prob. 2QCh. 1 - Briefly distinguish financial accounting from...Ch. 1 - The accounting process generates financial reports...Ch. 1 - Explain what the separate entity assumption means...Ch. 1 - List the three main types of business activities...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the balance sheet,...Ch. 1 - Explain why the income statement, statement of...Ch. 1 - Briefly explain the difference between net income...
Ch. 1 - Describe the basic accounting equation that...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Briefly define what an ethical dilemma is and...Ch. 1 - Prob. 18QCh. 1 - Prob. 1MCCh. 1 - Which of the following is true regarding the...Ch. 1 - Which of the following is false regarding the...Ch. 1 - Which of the following regarding retained earnings...Ch. 1 - Prob. 5MCCh. 1 - Which of the following statements regarding the...Ch. 1 - Prob. 7MCCh. 1 - Which of the following is true? a. FASB creates...Ch. 1 - Which of the following would not be a goal of...Ch. 1 - Prob. 10MCCh. 1 - Prob. 1MECh. 1 - Matching Definitions with Terms or Abbreviations...Ch. 1 - Matching Definitions with Terms Match each...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to the Basic...Ch. 1 - Matching Financial Statement Items to the Four...Ch. 1 - Reporting Amounts on the Statement of Cash Flows...Ch. 1 - Prob. 11MECh. 1 - Preparing a Statement of Retained Earnings Stone...Ch. 1 - Relationships among Financial Statements Items...Ch. 1 - Prob. 14MECh. 1 - Relationships among Financial Statements Items...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Preparing a Balance Sheet DSW, Inc., is a designer...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Labeling and Classifying Business Transactions The...Ch. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Preparing an Income Statement Home Realty,...Ch. 1 - Prob. 8ECh. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Analyzing and Interpreting an Income Statement...Ch. 1 - Prob. 11ECh. 1 - Matching Cash Flow Statement Items to Business...Ch. 1 - Preparing an Income Statement. Statement of...Ch. 1 - Interpreting the Financial Statements Refer to...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to CP1-3....Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Prob. 2PACh. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PA1-3....Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Interpreting the Financial Statements Refer to PB...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PB1-3....Ch. 1 - Finding Financial Information Answer the following...Ch. 1 - Comparing Financial Information Refer to the...Ch. 1 - Prob. 5SDCCh. 1 - Prob. 6SDCCh. 1 - Prob. 1CC
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Similar questions
- 1. Explain the purpose of operational accountability and the purpose of fiscal accountability. Which category of financial statements is most useful in reporting on each of these accountability concepts? 2. Under GASB guidance, when should an item be recognized on the face of the financial statements? Under what conditions would the GASB indicate that a note disclosure should accompany an item that has been recognized on the financial statements?arrow_forwardA special purpose framework that is a non-GAAP financial reporting framework, that employs either a cash, tax, regulatory, contractual, or other basis of accounting. For example, a tax basis of accounting is used to file an organization’s tax return for the period covered by its financial statements. After performing a special purpose framework as decribed above, what level of assurance is provided to the financial statements?arrow_forwardRecommendations for the role of Accounting Theory in Financial Reporting issues. It has to be clear and appropriate.arrow_forward
- In what way is the Securities and Exchange Commission concerned about and supportive of accounting principles and standards?arrow_forwardEvaluate the ethical considerations in accounting theory and their impact on financial reporting practices.arrow_forwarda) The IASB's Conceptual Framework for Financial Reporting lays out the objectives and fundamentals that will guide the development of financial accounting and reporting standards. The purpose of financial reporting is defined by its objectives. The characteristics or qualities of information discussed in the Conceptual Framework are the concepts that make information useful and the qualities to be sought when accounting choices are made. Required i. Explain the benefits that the firms derived from the Conceptual Framework in preparing their financial statements. ii. Explain the most essential quality for accounting information as stated in the Conceptual Framework? Justify your answer with an example.arrow_forward
- Generally accepted accounting principles play an important role in financial reporting.a. What is meant by the phrase generally accepted accounting principles?b. What are the major sources of these principles?c. Is there a single comprehensive list of generally accepted accounting principles? Explain. d. What types of accounting reports are prepared in conformity with generally accepted account-ing principles?arrow_forwardEarnings per share must be reported on the face of every income statement that is a. prepared in accordance with generally accepted accounting principles. b. prepared in accordance with the national association of state boards of accountancy standards. c. prepared in accordance with ethical standards set by the american institute of certified public accountants. d. prepared in accordance of the federal government.arrow_forwardAccounting Tax Principle: Understanding the Basics In the realm of accounting, the Accounting Tax Principle serves as a fundamental guideline for recognizing and accounting for taxes in a manner that aligns with the accrual basis of accounting. This principle is rooted in the idea that taxes should be recognized and recorded in the financial statements in the period in which they are incurred, regardless of when the actual payment occurs. This approach ensures a more accurate representation of an entity's financial performance by matching expenses, in this case, taxes, with the revenue they help generate. Application of the Accounting Tax Principle: When applying the Accounting Tax Principle, businesses consider various types of taxes, including income taxes, sales taxes, and other levies imposed by governmental authorities. The principle guides organizations to reflect the tax liability on their financial statements during the period in which the taxable event occurs or when the…arrow_forward
- Choose the answer which is not true about the conceptual framework for financial reporting. a. the conceptual framework forms the theoretical foundation of accounting b. the conceptual framework constitutes the highest level of authoritative status c. the conceptual framework serves as the guide for the development & revision of accounting standards d. all of the foregoing statements are correct about the conceptual framework for financial reportingarrow_forwardDiscuss the evolution of accounting theory and its impact on the development of financial reporting standards.arrow_forward5. Which statement is correct concerning interim financial reporting?I. An entity shall apply the same accounting policies in its interim financial statements as are applied in the annual financial statements. II. If an entity’s interim financial report is in compliance with PFRS, that fact shall be disclosed.arrow_forward
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