FINANCIAL REPORTING ENVIRONMENT
Answer No. Description
d 1. Accounting characteristics.
a 2. Nature of financial accounting.
c 3. Definition of financial accounting.
a 4. Financial reporting entity.
d 5. Efficient use of resources.
d 6. Capital allocation process.
c 7. Assessing management stewardship.
c 8. Objectives of financial reporting.
a 9. Role of AcSB.
c 10. Body responsible for setting GAAP.
b 11. Preparation of biased information.
d 12. Parties instrumental in development of reporting standards.
d 13. Stakeholders in the financial reporting environment..
a 14. “Due process”.
d 15. ...view middle of the document...
all of these.
2. Financial accounting is concerned with the process that culminates in
a. the preparation of financial reports.
b. specialized reports for inventory management and control.
c. specialized reports for income tax calculation and recognition.
d. reports on changes in stock prices and future estimates of market position.
3. Financial accounting can be broadly defined as the area of accounting that prepares financial statements to be used
a by parties internal to the business enterprise only.
b. by investors only.
c. by parties both internal and external to the business enterprise.
d. primarily by management.
4. The information provided by financial reporting pertains to
a. individual business enterprises, rather than to industries or an economy as a whole or to members of society as consumers.
b. business industries, rather than to individual enterprises or an economy as a whole or to members of society as consumers.
c. individual business enterprises, industries, and an economy as a whole, rather than to members of society as consumers.
d. an economy as a whole and to members of society as consumers, rather than to individual enterprises or industries.
5. Whether a business is successful and thrives is determined by
a. free enterprise.
d. all of these.
6. An effective capital allocation process
a. encourages innovation.
b. promotes productivity.
c. provides an efficient and liquid market for buying and selling securities.
d. all of these.
7. In assessing management stewardship, users traditionally refer to
a. non-financial measurements.
b. forward-looking data.
c. historical data .
d. none of these.
8. Which of the following statements is not an objective of financial reporting?
a. Provide information that is useful to users in making resource allocation decisions.
b. Provide information about an entity’s economic resources, obligations, and equity/net assets.
c. Provide information on the liquidation value of an enterprise.
d. Provide information about changes in an entity’s economic resources, obligations, and equity/net assets.
9. The role of the Accounting Standards Board (AcSB) in the formulation of accounting principles in Canada can be best described as
c. sometimes primary and sometimes secondary.
10. The body that has the responsibility to set generally accepted accounting principles in Canada is the
11. The preparation by some companies of biased information is sometimes referred to...