Accruals

Question 1

General rule to convert from cash to accrual is

Answer 1

to add the beginning liability balances and subtract the ending liability balances; also subtract the beginning asset balances and add the ending asset balances.

• Asset account: -beg. bal +end. bal.
• Liability account: +beg. bal -end. bal

Question 2

When converting from cash-basis sales to accrual-basis sales, sales must be adjusted for the net change in

Answer 2

account recoverable.

Question 3

7 key components of the general-purpoase external financial report?

Answer 3

Income statement
Balance sheet
Statement of cash flows
Statement of retained earnings
Statement of comprehensive income
Footnote disclosures
Auditor's opinion

Question 4

what body developed the GAAP?

Answer 4

FASB (Financial Accounting Standards Board)

Question 5

What purpose does the FASB Accounting Standards Codification serve?

Answer 5

The FASB Accounting Standards Codification is the sole source of authoritative U.S. generally accepted accounting principles for nongovernmental entities, except for the Securities and Exchange Commission guidance.

Question 6

what does GAAP address?

Answer 6

recognition, measurement, and disclosure

Question 7

what topic does the FASB Accounting Standards Codification not include?

Answer 7

Other comprehensive basis of accounting
Cash basis
Income tax basis
Regulatory accounting principles