Ch1. Balance sheet and disclousres overview

Question 1

What is disclosed in the summary of significant accounting policies?

Answer 1

Criteria for determining which investments are treated as cash equivalents

Question 2

What is the purpose of information presented in notes to the financial statements?

Answer 2

To provide disclosures required by GAAP

Question 3

What is considered for related party disclosures? (IFRS and FASB)

Answer 3

FASB - Loans to officers

IFRS - loans to officers and officers salaries

Question 4

When should estimates be disclosed?

Answer 4

Significant estimates should be disclosed when it is reasonably possible (not probable) that the estimate will change in the near term and that the effect of the change will be material. Immaterial items are not disclosed.

Question 5

What must be disclosed if one is considered as having significant influence over a company?

Answer 5

The company accounting policy for the investment

Question 6

What is included in “summary of signifficant accounting policies?

Answer 6

• measurement bases
• accounting principles
• methods
• criteria
• policies such as consolidation, depreciation methods, and revenue recognition, etc.