1

Question 1

Qualitative

Answer 1

Relevant and Faithful Representation

Question 2

Relevant

Answer 2

Predict
Confirm
Material Value

Question 3

Faithful Representation

Answer 3

Complete
Neutral
Free from error

Question 4

entity assumption

Answer 4

separate corporation/division

Question 5

going concern assumption

Answer 5

continue to operate in foreseeable future

Question 6

monetary unit assumption

Answer 6

measurable

Question 7

periodicity assumption

Answer 7

meaningful periods

Question 8

measurement principal

Answer 8

allows A&L to be measured at bases

Question 9

replacement cost

Answer 9

cash that would be paid to acquire an asset

Question 10

unusual/infrequent

Answer 10

• non operating g/l

- separately reported as part of income from continuing operations

Question 11

incremental cost of obtaining a contract

Answer 11

not been incurred and recognized as an asset

Question 12

Disco Ops (NET OF TAX)

Answer 12

• NET OF TAX
• bottom of IS
• After income from continuing ops

Question 13

disco rules

Answer 13

strategic shift and major effect

Question 14

deferred revenue (prepaid)

Answer 14

cash received before revenue is earned

Question 15

deferred expense (prepaid)

Answer 15

cash paid before expense is incurred

Question 16

accrued revenue

Answer 16

cash received after revenue has been earned

Question 17

accrued expense

Answer 17

cash paid after expense has been incurred

Question 18

single step IS

Answer 18

• total revenue and total expenses displayed

- no discounts or recovery

Question 19

selling expense

Answer 19

advertising, freight out, salaries and commissions

Question 20

G&A expense

Answer 20

legal fees, accounting fees, officers salary, insurance

Question 21

when fixed asset is sold at a gain or loss…

Answer 21

record as part of income from continuing operations at net amount

Question 22

deferred revenue

Answer 22

liability until the service has been performed