Test Bank for Understanding Financial Statements, Global Edition, 12th edition Aileen Ormiston, Lyn M. Fraser Chapter 1-15 Answers are at the End Of Each Chapter
Chapter 1 True-false 1. A firm’s Form 10-K contains only two pieces of information: the financial statements and the notes to the financial statements. 2. One objective of the financial statement user is to determine if an investment would generate attractive returns. 3. The FASB has the authority to set accounting policies for governmental organizations such as the IRS and the SEC has the authority to set accounting policies for corporations. 4. There are three basic financial statements included in corporate annual reports. 5. External auditors are required to audit the internal control assessment of the company as well as the financial statements. 6. Congress passed the Sarbanes-Oxley Act of 2002 in hopes of ending future accounting scandals and renewing investor confidence in the marketplace. 7. The Notes to the Financial Statements are an integral part of the statements and must be read in order to understand the presentation on the face of each financial statement. 8. Information that is significant enough to make a difference in a decision is immaterial. 9. The time period assumption assumes a two-year time frame with interim reporting occurring daily and weekly.
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