8. Under federal securities laws, the SEC has the authority to set accounting standards in the United States. True False 9. The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's auditors. True False 10. Auditors play an important role in the resource allocation process by adding credibility to financial statements. True False 11. The purpose of the conceptual framework is to provide a structure and framework for a consistent set of GAAP. True False 12. In the United States the conceptual framework indicates GAAP when a more specific accounting standard does not apply. True False 13. Materiality can be affected by the dollar amount of an item, the nature of the item, or both. True False 14. According to the FASB's Statements of Financial Accounting Concepts, conservatism is a desired qualitative characteristic of accounting information. True False 15. Equity is a residual amount representing the owner's interest in the assets of the business. True False 16. Revenues are inflows or other enhancements of assets or settlements of liabilities from activities that constitute the entity's ongoing operations. True False 17. Gains or losses result, respectively, from the disposition of business assets for greater than, or less than, their book values. True False
8. Under federal securities laws, the SEC has the authority to set accounting standards in the United States. True False 9. The primary responsibility for properly applying GAAP when communicating with investors and creditors through financial statements lies with a firm's auditors. True False 10. Auditors play an important role in the resource allocation process by adding credibility to financial statements. True False 11. The purpose of the conceptual framework is to provide a structure and framework for a consistent set of GAAP. True False 12. In the United States the conceptual framework indicates GAAP when a more specific accounting standard does not apply. True False 13. Materiality can be affected by the dollar amount of an item, the nature of the item, or both. True False 14. According to the FASB's Statements of Financial Accounting Concepts, conservatism is a desired qualitative characteristic of accounting information. True False 15. Equity is a residual amount representing the owner's interest in the assets of the business. True False 16. Revenues are inflows or other enhancements of assets or settlements of liabilities from activities that constitute the entity's ongoing operations. True False 17. Gains or losses result, respectively, from the disposition of business assets for greater than, or less than, their book values. True False
Chap0011-1.docx