Answer
1. (d)
2. (d)
3. (d)
4. (a)
5. (a)
6. (b)
7. (d)
8. (b)
Work Step by Step
1. (d) GAAP stands for Generally Accepted Accounting Principles.
2. (d) Accounting standard-setters use the following process in establishing accounting standards: research, discussion paper, exposure draft, standard.
3. (d) GAAP is comprised of any accounting guidance included in the FASB Codification.
4. (a) The authoritative status of the conceptual framework is as follow: it is used when there is no standard or interpretation related to the reporting issues under consideration.
5. (a) The objective of financial reporting places most emphasis on reporting to capital providers.
6. (b) General-purpose financial statements are prepared primarily for external users.
7. (d) Economic consequences of accounting standard-setting means that accounting standards can have detrimental impacts on the wealth levels of the providers of financial information.
8. (b) The expectations gap is what the public thinks accountants should do and what accountants think they can do.
