Test Bank For Accounting Theory Conceptual Issues In A Political And Economic Environment 9th Edition Harry I. -James L

Test Bank For Accounting Theory Conceptual Issues In A Political And Economic Environment 9th Edition Harry I. -James L

Chapter 3—DEVELOPMENT OF INSTITUTIONAL STRUCTURE OF FINANCIAL ACCOUNTING

TRUE/FALSE

1.The accounting profession has been regulated by Congress since the 1880s when it became clear that accounting was an important instrument in America for conducting business.

ANSWER: F

2.The SEC was created by Congress to replace the AICPA’s standard-setting group.

ANSWER: F

3.The SEC is legally empowered to regulate accounting principles.

ANSWER: T

4.Most of the responsibility for establishing accounting principles has remained with the private sector rather than the SEC.

ANSWER: T

5.The Securities Act of 1933 and the Securities and Exchange Act of 1934 were the first national securities legislations in the United States.

ANSWER: T

6.The Journal of Accountancy was founded by the American Association of Public Accountants in 1905.

ANSWER: T

7.The American Accounting Association was originally called the American Society of Certified Public Accountants.

ANSWER: F

8.The Committee on Accounting Procedures (CAP) used a formalized deductive approach to develop a comprehensive accounting theory.

ANSWER: F

9.The Committee on Accounting Procedures (CAP) represented the profession’s first sustained attempt to develop workable financial accounting rules.

ANSWER: T

10.APB Opinions were originally expected to be based on in-depth research studies.

ANSWER: T

11.The Trueblood Study Group formed the FASB and called for significant changes in the establishment of financial accounting standards.

ANSWER: F

12.The responsibility of the Financial Accounting Foundation is to elect the board of trustees, which selects FASB members, funds the board’s activities, and performs the oversight role.

ANSWER: T

13.The FASB has made more extensive use of research than did its predecessors.

ANSWER: T

14.FASB statements have resulted in a more conservative balance sheet and immediate recognition of events on the income statement.

ANSWER: T

15.The Accounting Standards Executive Committee of the AICPA (ASEC) and the Emerging Issues Task Force (EITF) were established to solve the problems of particular industries as well as narrow technical issues.

ANSWER: T