Accrual Accounting

Question 1

External Financial Report

Answer 1

Ans:
also called general-purpose external financial or annual report.

is prepared by applying Generally Accepted Accounting Principles (GAAP)(?).

Question 2

Authoritative GAAP vs Non-authoritative GAAP

Answer 2

Ans: represents Accounting Standards Codification (ASC)

ASC is compilation and organization of all GAAP sources

Non Authoritative GAAP is not in the Codification. For example:

1) Other Comprehensive basis of Accounting
2) Cash Basis
3) Income Tax Basis
4) Regulatory Accounting Principles

Question 3

Guidance for non specified transactions or events

Answer 3

If guidance for a transaction or event is not specified in codification, authoritative GAAP for similar transactions or events should be considered non-authoritative GAAP.

Question 4

What are the sources of non authoritative guidance?

Answer 4

Ans:

1) FASB concept statements
2) AICPA issues papers
3) IFRS

Question 5

Codification format

Answer 5

Ans: Codification does include entire portions of SEC, but it doesn’t contain the entire text of relevant SEC rules, regulations, interpretive releases, and staff guidance.

Question 6

Accruals

Answer 6

Ans: economic event. Accrue the cash owed or to be paid as an asset or liability.

Question 7

Deferrals

Answer 7

Ans: Cash activity. Defer the recognition of an expense or revenue as an asset or liability.