Accounting Standards and Conceptual Frameworks Flashcards
Who has the legal authority within the US to establish GAAP?
SEC
How and when was the SEC formed?
Securities Exchange Act of 1934
The FASB was established when?
1973
Which committee established the Accounting Principles Board Opinions (APBO)?
Accounting Principles Board
How many fulltime members sit on the FASB?
7
How long are the terms for FASB board members?
5 years
What is the single authoritative source on nongovernmental US GAAP?
FASB Accounting Standards Codification (ASC)
What seven pieces of literature comprise of the ASC?
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.
What SEC standards are included in the ASC?
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)
Who created the Private Company Council (PCC)?
the Financial Accounting Foundation
What is the goal of the PCC?
To establish alternatives to US GAAP for private companies to make private company statements more relevant, less complex and cost beneficial.
True/False: Accounting Standards updates are Authoritative literature.
False- ASU are not within GAAP.
Which board establishes the International Financial Reporting Standards (IFRS)?
The International Accounting Standards Board.
How many fulltime members and part-time members sit on the IASB?
15 fulltime members and two part time members.
Who are the primary users of Financial Statements?
External personnel (creditors, investors, lenders)
True/False: Regulators are primary users of F/S?
False- they are -not- considered primary users.
What are the two fundamental qualitative characteristics of useful financial information?
(Relevant & Faithful) Relevance and Faithful Representation
What are the three requirements for financial information to be relevant?
(Passing Confirms Money!) Predictive Value, Confirming Value, Materiality.
What are the three requirements for financial information to be considered faithfully represented?
(Completely Neutral is Free From Error) Completeness, Neutrality, Freedom From Error.
What are the four enhancing qualitative characteristics of fundamental financial information?
(Compare and Verify in Time to Understand). Comparability(consistency), verifiability, Timeliness, and understandability.
According to SFAC No5. what comprises of a full set of financial statements?
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.
What type of account is recorded at historical cost?
PP&E
What type of account is recorded at current cost?
Inventory
What type of account is recorded at NRV( Net Realizable Value)
A/R
