Suggested Solutions for ACCT 351 Adapted from Beechy, T. H., & Conrod, J. E. D. (2005). Solutions manual to accompany intermediate accounting, volume 1(3rdCan. ed.). Toronto: McGraw-Hill Ryerson. Reproduced with permission. Page 1 of 7 Lesson 1, Chapter 1 Assignment 1-1 (text, p. 31)F 1. The presence of restrictive bond covenants, specifying minimum times-interest-earned ratios, means that an organization will have a tendency to pick discretionary accounting policies that minimize income. F 2. External decision makers have direct access to the information generated by the internal operations of a company. F 3. All generally accepted accounting principles are the result of a designated rule-making body. F 4. The primary objective of financial accounting is to report on stewardship. T 5. Company earnings goals are often tailored to a smooth pattern of earnings growth. F 6. GAAP must be followed for all financial accounting reports. T 7. The presence of a control block can have an impact on a company’s choice of accounting policies. T 8. GAAP includes practices that have evolved and gained acceptance over time, even when not codified in writing. T 9. IASB standards must be followed by countries that do not develop their own standards in order to facilitate access to international capital markets. F 10. The EIC provides technical guidance to the AcSB on matters of broad importance and scope.
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