Question

Which of the following statement is true in regards to accounting?

	a.	Accounting standards are no longer evolving because the U.S. has had an established capital market system with formal accounting standards since the early 1930s.
	b.	The AICPA developed the conceptual framework and issues Statements of Financial Accounting Concepts that address current and future accounting problems
	c.	The U.S. is not formally adopting international accounting standards, however; the U.S. standard setter still works informally with its London-based counterpart in cooperative efforts when setting accounting standards
	d.	The Accounting Principles Board and the Committee for Accounting Practices preceded the FASB as a standard setter and issuer of accounting principles..
	e.	All of the statements are true except d is true Evaluate the veracity of the following statements to determine which is not true. a. Preparing accounting information on a timely basis is a key goal of financial reporting in the U.S. b. Recording transactions before cash is received for services or paid for purchases would be misleading to the users of financial accounting information c. A certified public accountant may obtain licensure in any State after successfully passing four parts of a uniform exam, obtaining a requisite amount of experience, and competing 120 semester hours of college credit d. Cost accounting unlike financial accounting is a subset of managerial accounting e. an annual report contains management's discussion and analysis of financial results and the auditor's opinion on the financial statements

Answer 1

Accounting standards are no longer evolving because the U.S. has had an established capital market system with formal accounting standards since the early 1930s.

False – Accounting standards are evolving along with the change in business environment.

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The AICPA developed the conceptual framework and issues Statements of Financial Accounting Concepts that address current and future accounting problems.

False – FASB (Financial Accounting Standards Board) issues the Statements of Financial Accounting Concepts.

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The U.S. is not formally adopting international accounting standards, however; the U.S. standard setter still works informally with its London-based counterpart in cooperative efforts when setting accounting standards

True – FASB (Financial Accounting Standards Board) is closely working with the International Accounting Standards Board (IASB), London to on the convergence of U.S. GAAP and IFRS.

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The Accounting Principles Board and the Committee for Accounting Practices preceded the FASB as a standard setter and issuer of accounting principles.

False - The Accounting Principles Board was the former authoritative body of the American Institute of Certified Public Accountants (AICPA). It was replaced by the Financial Accounting Standards Board (FASB). Further, Committee for Accounting Practices is the predecessor of the Accounting Principles Board.

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Preparing accounting information on a timely basis is a key goal of financial reporting in the U.S.

False – Timely preparation of financials is not considered as a key goal of financial reporting.

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Recording transactions before cash is received for services or paid for purchases would be misleading to the users of financial accounting information

False – Accounting transactions are recorded when services provided/received irrespective of cash movement.

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A certified public accountant may obtain licensure in any State after successfully passing four parts of a uniform exam, obtaining a requisite amount of experience, and competing 120 semester hours of college credit

False – CPA license regulations change from state to state.

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Cost accounting unlike financial accounting is a subset of managerial accounting

True – Cost accounting is a part of managerial accounting. Managerial accounting used in a broad sense which includes using accounting GAAP as well.

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An annual report contains management's discussion and analysis of financial results and the auditor's opinion on the financial statements

True – Generally, annual report includes directors report, management discussion, financials and auditors opinion on the financial statements.