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FAR 1 > Accounting Standards and Conceptual Frameworks > Flashcards

Accounting Standards and Conceptual Frameworks Flashcards

1
Q

Who has the legal authority within the US to establish GAAP?

A

SEC

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2
Q

How and when was the SEC formed?

A

Securities Exchange Act of 1934

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3
Q

The FASB was established when?

A

1973

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4
Q

Which committee established the Accounting Principles Board Opinions (APBO)?

A

Accounting Principles Board

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5
Q

How many fulltime members sit on the FASB?

A

7

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6
Q

How long are the terms for FASB board members?

A

5 years

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7
Q

What is the single authoritative source on nongovernmental US GAAP?

A

FASB Accounting Standards Codification (ASC)

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8
Q

What seven pieces of literature comprise of the ASC?

A

FEDPRIA- Financial Accounting Standards Board(FASB), Emerging Issues Task Force (EITF), Derivative Implementation Group Issues, Accounting Principles Board Opinions, Accounting Research Bulletins, Accounting Interpretations, AICIPA guidance and bulletins.

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9
Q

What SEC standards are included in the ASC?

A

Regulation For Accounting IS Emerging - Regulation S-X, Financial Reporting Releases (FRR), Accounting Series Releases, ASR), Interpretative Releases (IR), Staff Accounting Bulletins (SAB), EITF Topic D and SEC Staff Observer Comments)

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10
Q

Who created the Private Company Council (PCC)?

A

the Financial Accounting Foundation

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11
Q

What is the goal of the PCC?

A

To establish alternatives to US GAAP for private companies to make private company statements more relevant, less complex and cost beneficial.

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12
Q

True/False: Accounting Standards updates are Authoritative literature.

A

False- ASU are not within GAAP.

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13
Q

Which board establishes the International Financial Reporting Standards (IFRS)?

A

The International Accounting Standards Board.

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14
Q

How many fulltime members and part-time members sit on the IASB?

A

15 fulltime members and two part time members.

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15
Q

Who are the primary users of Financial Statements?

A

External personnel (creditors, investors, lenders)

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16
Q

True/False: Regulators are primary users of F/S?

A

False- they are -not- considered primary users.

17
Q

What are the two fundamental qualitative characteristics of useful financial information?

A

(Relevant & Faithful) Relevance and Faithful Representation

18
Q

What are the three requirements for financial information to be relevant?

A

(Passing Confirms Money!) Predictive Value, Confirming Value, Materiality.

19
Q

What are the three requirements for financial information to be considered faithfully represented?

A

(Completely Neutral is Free From Error) Completeness, Neutrality, Freedom From Error.

20
Q

What are the four enhancing qualitative characteristics of fundamental financial information?

A

(Compare and Verify in Time to Understand). Comparability(consistency), verifiability, Timeliness, and understandability.

21
Q

According to SFAC No5. what comprises of a full set of financial statements?

A

Statement of Financial Position (B/S), Statement of Earnings (I/S), Statement of Comprehensive Income, Statement of Cash Flows (C/F), Statement of changes in owners Equity.

22
Q

What type of account is recorded at historical cost?

A

PP&E

23
Q

What type of account is recorded at current cost?

A

Inventory

24
Q

What type of account is recorded at NRV( Net Realizable Value)

A

A/R

25
Q

What type of account is recorded at Current Market Value

A

Marketable Securities

26
Q

What account is recorded at future cash flows?

A

LT Debt/Bonds

27
Q

Under US GAAP how many assumptions are there of the F/S?

A

4

28
Q

Under IFRS how many assumptions are there of the F/S?

A

1 - Going concern

29
Q

What is the entity Assumption?

A

Economic activity can be accounted for in an identifiable set of activities (another corporation, division, segment)

30
Q

What is the Going Concern assumption?

A

The entity will continue to operate in the foreseeable future.

31
Q

What is the Monetary Unity assumption?

A

Money is the appropriate basis of economic activity.

32
Q

What is the periodicity assumption?

A

Economic activity can be divided into meaningful time periods

FAR 1 (7 decks)

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