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CFAS > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

generate general purpose financial statements that provide info, about economic entities, that is used as basis for the formulation of economic decisions

A

Purpose of Accounting Process

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2
Q

communication of financial statements and other financial info

A

Financial Reporting

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3
Q

purpose of financial reporting

A

To provide useful financial info to stakeholders

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4
Q

active owners and managers

A

Internal Users

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5
Q

users that have ready access to specific types of accounting information

A

Internal Users

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6
Q

users other than the management of the entity

A

External Users

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7
Q

users that do not have ready access to financial reports and rely heavily on negotiations and regulations

A

External Users

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8
Q

primary users of financial reporting are the external users

A

True

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9
Q

product of financial accounting

A

Financial Statements

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10
Q

general-purpose reports provided to external users

A

Financial Statements

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11
Q

assess the ability to pay loans and the interest attached to it

A

Present and potential creditors

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12
Q

whether the cost of goods and services will be paid when due

A

Suppliers of goods and services

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13
Q

continuation of the enterprise as a major customer

A

Suppliers of goods and services

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14
Q

concerned with the financial status of the enterprise

A

Employees

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15
Q

they check the ability to provide remuneration, retirement benefits and employment opportunities of companies

A

Employees

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16
Q

they are concerned in the continuance of an enterprise

A

Customers

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17
Q

concerned if they have long-term involvement with are their supplier

A

Customers

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18
Q

concerned with the interest of public investors and other parties dealing with it

A

Government Regulation

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19
Q

they check if it complied with the prescribed rules and regulations, taxation policies and collection

A

Government Regulation

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20
Q

they set basis for national income and similar statistics

A

Government Regulation

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21
Q

concerned with the trends and range of business entities’ economic activities

A

Public

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22
Q

users with direct interest in the financial information

A

Direct Users

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23
Q

tool to protect their own interest in the enterprise

A

Direct Users

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24
Q

they provide advice and protect the interest of a direct user

A

Indirect Users

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25
Q

they protect investors and public

A

Regulatory Agency

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26
Q

they protect employees

A

Labor Unions

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27
Q

they protect customers, lenders and suppliers

A

Financial and Legal Consultant

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28
Q

unit of measure used in communication accounting information

A

Monetary Unit

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29
Q

a unit that has a personality diff from the personality of its owners, members and employees

A

Reporting Entity/ Accounting Entity

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30
Q

concept that separates the personality of the enterprise from that of its owners and other stakeholder

A

Accounting Entity Concept/ Business Entity Concept

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31
Q

capable of controlling its own economic resources and incurring economic obligations

A

Accounting Entity

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32
Q

Branches of Accounting

A

Financial, Management, Cost, Tax, Government

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33
Q

broadest branch of accounting that is concerned with the needs of external users

A

Financial Accounting

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34
Q

common info needs of external users

A

Profitability, Liquidity and Stability

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35
Q

Financial accounting should conform to the accounting standards

A

True

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36
Q

2 main purpose of accounting standard

A

Relevance and Reliability

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37
Q

it serves to the needs of internal users (short-term and long-term plans and routine and major economic decisions)

A

Management Accounting

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38
Q

information is not structured and does not necessarily need to conform to accounting standards

A

Management Accounting

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39
Q

measurement and recognition of cost of services provided/products manufactured

A

Cost Accounting

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40
Q

deals with the computation of taxes and preparation of tax returns submitted to a taxing authority

A

Tax Accounting

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41
Q

receipt and disposition of government funds and property

A

Government Accounting

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42
Q

system adapted by government units and some government agencies

A

Government Accounting

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43
Q

one phase of accounting which is the recording phase

A

Bookkeeping

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44
Q

other phases of accounting

A

classifying, summarizing, communicating and interpreting

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45
Q

independent examination of financial statement by a CPA

A

Auditing

46
Q

it is developed internally and is the representation of the company’s management

A

Financial Statements

47
Q

1973; it developed a set of uniform global accounting standards

A

Internal Accounting Standards Committee (IASB)

48
Q

incomparability is not an issue

A

International Accounting Standard (IAS)

49
Q

2001; it is under the umbrella of IFRS Foundation

A

International Accounting Standards Board (IASB)

50
Q

not for profit, public interest organization

A

International Financial Reporting Standards (IFRS)

51
Q

develop a single set of high-quality, understandable, enforceable and globally accepted accounting standards

A

IFRS

52
Q

standards that originated from the works of the IAS Committee and later improved/revised by the IASB

A

IAS

53
Q

standards that originated from the works of the IASB

A

IFRS

54
Q

IFRS include the following _____

A

ISIS

55
Q

I of ISIS

A

Interpretation of IFRIC

56
Q

IFRIC

A

International Financial Reporting Interpretations Committee

57
Q

S of ISIS

A

Specific IFRS

58
Q

second I of ISIS

A

International Accounting Standards

59
Q

second S of ISIS

A

SIC

60
Q

SIC

A

Standing Interpretations Committee

61
Q

Overall objective of IASB

A

TAE

62
Q

TAE

A

Transparency, Accountability and Efficiency

63
Q

Overall objective of IASB

A

to communicate financial info that achieves TAE to financial markets around the world

64
Q

enhancing the international comparability and quality of information

A

Transparency

65
Q

reducing info gap between the investors and people

A

Accountability

66
Q

another major sector of users of financial information

A

Regulators

67
Q

helping investors identify opportunities and risks and improves capital allocation

A

Efficiency

68
Q

Primary function of the IFRS Foundation

A

govern and oversee the activities of its standard-setting body (IASB)

69
Q

IASB due process

A

APDESI

70
Q

APDESI

A

Agenda, Planning the project, Discussion Paper, Exposure Draft, Standard, Issuance

71
Q

may effectivity date and may date of issuance (ahead/equal to that of the ED)

A

Issuance

72
Q

issue item that tackles about the relevance and reliability of the info

A

Agenda

73
Q

members of staff from other accounting standard-setters; maybe jointly or alone

A

Working Group

74
Q

it is not mandatory; comprehensive overview of the issue; tackles possible approaches in addressing the issue

A

Discussion Paper

75
Q

preliminary views of its author/IASB and an invitation to comment

A

Discussion Paper

76
Q

carried by another standard-setter; it only requires the simple majority vote of the IASB members

A

Research Project

77
Q

carried out by the IASB

A

Active Agenda

78
Q

main vehicle to consult the interested public

A

Exposure Draft

79
Q

a proposed standard/proposed amendment to a standard

A

Exposure Draft

80
Q

the comment period of the exposure draft

A

120 Days

81
Q

the number of days for the IFRIC interpretations in the exposure draft

A

60 Days

82
Q

if necessary a second draft may be written

A

True

83
Q

sent to selected parties for review

A

Pre-ballot IFRS

84
Q

posted on IASB’s website (limited access = 10 days; after then its freely available online)

A

Near Final Draft

85
Q

circularizing the near final reporting standard to the IASB members

A

Balloting

86
Q

it requires individual final review and approval of the draft

A

Balloting

87
Q

IFRS are principle-based rather than procedure-based

A

True

88
Q

organized to interpret specific issues when the standards do not include specific authoritative guidance

A

IFRIC

89
Q

IFRIC consists of how many members

A

14 voting members

90
Q

the year when BoA was formed and start of formal accounting in the Philippines

A

1923

91
Q

IFRIC members should act independently and does not represent any org or associations

A

True

92
Q

accredited professional org of CPA in the Philippines

A

Philippine Institute of CPA (PICPA)

93
Q

formalized the standard setting process in the Phil

A

Accounting Standard Council (ASC)

94
Q

year when ASC when formed

A

November 18, 1981

95
Q

accounting standard developed by ASC

A

Statements of Financial Accounting Standards (SFAS)

96
Q

they established and improved GAAP in the Phil

A

ASC

97
Q

how many members does FRSC have?

A

15 members (1 chairman and 14 members)

98
Q

how many members does ASC have?

A

8 members

99
Q

body that regulates the practice of accountancy in the Philippines

A

Board of Accountancy (BoA)

100
Q

Implementing Rules and Regulations of the Phil Accountancy Act

A

R.A. 9298

101
Q

provide the council assistance in establishing and improving financial reporting standards in the Phil

A

Philippine Interpretations Committee (PIC)

102
Q

when was PIC formed?

A

November 2006

103
Q

they replace and take over the functions of ASC

A

Financial Reporting Standard Council (FRSC)

104
Q

when was FRSC formed?

A

2006

105
Q

PIC guidelines on PFRS

A

SPaPi

106
Q

S of SPaPi

A

Specific PFRS adopted from IFRS

107
Q

Pa of SPaPi

A

Philippine Accounting Standard adopted from IAS

108
Q

Pi of SPaPi

A

Philippine Interpretations (IFRIC and SIC), interpretations of PIC

109
Q

PFRS due process

A

CFICAP

110
Q

consideration of pronouncement of IASB, formation of task force, issue exposure draft, consideration of comment letter to IASB, approval by a majority (at least 51% of FRSC), publish the standard to Official Gazette/newspaper of general circulation

A

CFICAP

111
Q

commentary period of exposure drafts in PFRS due process

A

60 days but not less then 30 days

CFAS (4 decks)

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