1. In the United States, GAAP comes under the purview of the:
a. Financial Accounting Standards Board (FASB).
b. IRS.
c. Securities and Exchange Commission (SEC).
d. All of the above.
2. Deferred tax assets represent:
a. future deductions.
b. contingent assets.
c. future includable income.
d. unearned revenue.
3. Which statement is CORRECT regarding accounting for income taxes in a financial statement?
a. The income tax provision only includes the taxes paid for that reporting period.
b. Items of income and expense are treated the same for book and tax purposes as reflected in the financial
statement.
c. Accounting for income taxes does not incorporate the deferred tax model.
d. Accounting for income taxes must reflect the differences between financial statement and tax return
reporting.
4. Which of the following are goals of the International Accounting Standards Board (IASB)?
a. To develop s single set of high quality, understandable and enforceable international financial reporting
standards.
b. To create a single source of U.S. GAAP for private companies.
c. To bring about convergence of national accounting standards and IFRS.
d. Only (a) and (c).
e. Only (a) and (b).
5. The main advantage of the FASB Codification is:
a. convergence of national accounting standards and IFRS.
b. a shift from national accounting to international accounting.
c. a move away from a standards-based model of organization to one based on topical area.
d. all of the above.
6. Which of the following represents the correct Codification structure?
a. Sections-Subsections-Topics-Subtopics.
b. Topics-Subtopics-Sections-Subsections.
c. Code Sections and FASB Topics.
d. None of the above.
7. Which statement is CORRECT regarding the SEC?
a. It has standards-setting authority over public companies.
b. It is authorized to oversee the functioning of U.S. capital markets.
c. It has issued a number of forms of guidance on accounting principles.
d. All of the above.
8. Which of the following International Accounting Standards deals with international guidance for accounting for
income taxes?
a. IAS 29
b. ACS 740
c. SFAS 109
d. IAS 12
9. Which of the following statements is CORRECT regarding the FASB Accounting Standards Codification Research
System (CRS)?
a. Subsections represent a collection of related guidance for a specific area.
b. A no-cost basic version is available that allows the user to Browse but not search the Codification.
c. Keyword searching is not available in the Codification Research System.
d. No cross-referencing to older guidance documents is provided.
10. To assist with citation of the Accounting Standards Codification, the FASB created a numerical system that uses
which of the following formats?
a. Topics that track Code section numbers.
b. Standards with heading numbers based on release date.
c. Topics identified by a three-digit number between 105–999.
d. None of the above.
11. Most research using the Codification is expected to be performed using the:
a. Browse function
b. Search function
c. Go To function
d. Find function
12. While browsing through Codification structure, all of the two-digit subtopics and three-digit intersection topics are
displayed on the:
a. subsection page.
b. general topic landing page.
c. search screen.
d. none of the above.
13. Which of the following functions provides a printer-friendly version of a document in the Codification Research
System (CRS)?
a. Find function.
b. Go To function.
c. Search function.
d. Print function.
14. The Go To function works in a similar fashion to a:
a. Cross-reference function.
b. Browse function in a typical tax service.
c. Join Sections function in FASB Accounting Standards CRS.
d. Search by citation in a typical tax service.
15. Pre-codification literature issued by various standard setters include:
a. Statements of Financial Accounting Standards
b. Derivatives (Statement 133) Implementation Issues
c. Accounting Research Bulletins
d. EITF Abstracts
16. Under the FASB Codification, guidance for income taxes is found in:
a. ACS Statement 133.
b. ACS 740
c. IAS 12.
d. SFAS 109.
17. A position taken in a previously filed return or expected to be taken in a future return is known as:
a. an audit position.
b. a tax position.
c. an uncertain tax position.
d. none of the above.
18. Subsequent to Codification, changes to guidance in the Codification are now made through:
a. Accounting Standards Updates.
b. XBRL Elements.
c. issuance of a new Statement of Position.
d. all of the above.
19. Accounting Research Manager, an online database to provide accounting, auditing, and other SEC authoritative
literature, is a product of:
a. Checkpoint
b. WG&L
c. CCH IntelliConnect
d. Westlaw
20. A wide variety of materials and analysis on accounting topics is provided by LexisNexis through its:
a. LexisNexis Tax Center
b. Financial Reporting Manager.
c. Accounting Research Manager.
d. CRS.
21. Which of the following statements is INCORRECT regarding the International Financial Reporting Standards
(IFRS)?
a. The standards are promulgated by the International Accounting Standards Board.
b. IFRS takes into account the financial reporting needs of emerging economies and small and medium-sized
entities.
c. The U.S. has adopted IFRS, and U.S. companies are now subject to the international standards.
d. All of the above statements are correct.
22. Under both U.S. GAAP and IAS, the amount of tax expense reflected in the financial statements is made up of both
current and deferred components.
a. True
b. False
23. The deferred tax model of taxes applies to all Federal, state, foreign and local taxes based on income.
a. True
b. False
24. Generally, non-income taxes are recognized in the financial statements in the period in which they are paid.
a. True
b. False
25. Prior to the 1970s, accounting standards were promulgated by groups formed under the umbrella of the American
Institute of Certified Public Accountants (AICPA).
a. True
b. False
26. The International Accounting Standards Board (IASB) was formed to deal with the proliferation of country– or
jurisdiction-specific accounting principles.
a. True
b. False
27. The Codification does not include material issued by the SEC applicable to public companies.
a. True
b. False
28. The main difference between U.S. GAAP and IFRS is that IFRS is much lengthier, with over 25,000 pages.
a. True
b. False
29. Using the Codification Research System (CRS), a researcher can join all related sections of a topic into a single
document so that the guidance across all sections within a topic can be reviewed at one time.
a. True
b. False
30. The FASB Codification ‘Join Sections’ allows the related sections of a topic to be joined into a single document so
that the guidance across all sections within a topic can be reviewed at the same time.
a. True
b. False
31. The Codification system provides a cross-referencing system that allows researchers to locate guidance in the
Codification using the old guidance or to find the old guidance using the new Codification reference.
a. True
b. False
32. Accounting Statements of Position (SOPs) were brought into the FASB Accounting Standards Codification (ASC).
a. True
b. False
33. ASC 740 requires taxpayers to examine each and every ‘tax position’ taken.
a. True
b. False
34. Accounting Research Manager (ARM) is part of the Codification Research System (CRS) offering access to
accounting, auditing, governmental and SEC authoritative literature.
a. True
b. False
35. The application of ACS 740 to an uncertain tax position allows tax benefits to be recognized in financial statements
only when it is determined that it is more likely than not that the tax position can be sustained or when the position is
ultimately settled via an audit, a negotiation, or a court decision.
a. True
b. False
36. Exposure drafts issued for proposed updates of accounting standards in the Codification are indexed alphabetically.
a. True
b. False
37. What are the principal objectives of the International Accounting Standards Board (IASB)?
38. How is the Codification Research System’s “Join Sections” function useful to tax researchers? Give an example of
how it works.
39. Even with the Codification, the “Financial Accounting Standards Board (FASB) is not the only standard setting
authority in the United Sates.” Explain.
40. Explain the basic principles of accounting for deferred taxes.
41. What is meant by “tax position”? Explain the requirements of ASC 740 for the reporting of tax positions.
42. “A sound understanding of financial accounting is essential for tax professionals.” Discuss.