CA NO: 3

Answer the following multiple-choice questions.\n1. GAAP stands for:\n(a) governmental auditing and accounting practices.\n(b) generally accepted attest

Answer the following multiple-choice questions.

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1. GAAP stands for:

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(a) governmental auditing and accounting practices.

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(b) generally accepted attest principles.

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(c) government audit and attest policies.

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(d) generally accepted accounting principles.

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2. Accounting standard-setters use the following process in establishing accounting standards:

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(a) Research, exposure draft, discussion paper, standard.

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(b) Discussion paper, research, exposure draft, standard.

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(c) Research, preliminary views, discussion paper, standard.

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(d) Research, discussion paper, exposure draft, standard.

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3. GAAP is comprised of:

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(a) FASB standards, interpretations, and concepts statements.

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(b) FASB financial standards.

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(c) FASB standards, interpretations, EITF consensuses, and accounting rules issued by FASB predecessor

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organizations.

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(d) any accounting guidance included in the FASB Codification.

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4. The authoritative status of the conceptual framework is as follows.

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(a) It is used when there is no standard or interpretation related to the reporting issues under

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consideration.

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(b) It is not as authoritative as a standard but takes precedence over any interpretation related to

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the reporting issue.

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(c) It takes precedence over all other authoritative literature.

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(d) It has no authoritative status.

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5. The objective of financial reporting places most emphasis on:

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(a) reporting to capital providers.

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(b) reporting on stewardship.

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(c) providing specific guidance related to specific needs.

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(d) providing information to individuals who are experts in the field.

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6. General-purpose financial statements are prepared primarily for:

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(a) internal users.

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(b) external users. (c) auditors.

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(d) government regulators.

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7. Economic consequences of accounting standard-setting means:

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(a) standard-setters must give first priority to ensuring that companies do not suffer any adverse

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effect as a result of a new standard.

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(b) standard-setters must ensure that no new costs are incurred when a new standard is issued.

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(c) the objective of financial reporting should be politically motivated to ensure acceptance by the

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general public.

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(d) accounting standards can have detrimental impacts on the wealth levels of the providers of

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financial information.

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8. The expectations gap is:

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(a) what financial information management provides and what users want.

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(b) what the public thinks accountants should do and what accountants think they can do.

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(c) what the governmental agencies want from standard-setting and what the standard-setters provide.

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(d) what the users of financial statements want from the government and what is provided.

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