test.docx - TRUE-FALSE 1 Financial accounting is the...

TRUE-FALSE
1. Financial accounting is the process of identifying, measuring, analyzing, and communicating
financial information needed by management to plan, evaluate, and control an
organization's operations.
2. Financial statements are the principal means through which financial information is
communicated to those outside an enterprise.
3. Users of the financial information provided by a company use that information to make
capital allocation decisions.
4. An effective process of capital allocation promotes productivity and provides an efficient
market for buying and selling securities and obtaining and granting credit.
5. Financial reports in the early 21st century did not provide any information about a
company’s soft assets.
6. Accounting standards are now less likely to require the recording or disclosure of fair value
information due to its inherent subjectivity.
7. While objectives for financial reporting exist on an informal basis, no formal objectives have
been adopted.
8. One weakness of accrual accounting is that it does not provide a good indication of the
enterprise's present and continuing ability to generate favorable cash flows.
9. Some generally accepted accounting principles have simply been accepted as appropriate
because of their universal application rather than due to the action of an authoritative
accounting rule-making body.
10. Users of financial accounting statements have both coinciding and conflicting needs for
information of various types.
11. The Securities and Exchange Commission appointed the Committee on Accounting
Procedure.
12. The passage of a new FASB Standards Statement requires the support of five of the seven
board members.