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ACC-311 > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Provides relevant information to various external users

A

Financial Accounting

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2
Q

Mechanisms that foster the allocation of resources efficiently

A

Capital Markets

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3
Q

The dominant form of business organization that acquires capital from investors in exchange for ownership interest and from creditors by borrowing

A

Corporation

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4
Q

provide for new cash by the issuance of stocks and bonds by the corporation

A

Initial Market Transactions

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5
Q

Provide for the transfer of stocks and bonds among individuals and institutions

A

Secondary Market Transactions

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6
Q

Dividends +Share Price Appreciation
____________________________
Initial Investment

A

Rate of Return

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7
Q

Difference between cash receipts and cash disbursements during a reporting period from transactions related to providing goods and services to customers

A

Cash Basis Accounting/Net Operating Cash Flow

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8
Q

Measurement of the entity’s accomplishment and resource sacrifices during the period, regardless of when cash is received or paid

A

Accrual Accounting

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9
Q

Set of both broad and specific guidelines that companies should follow when measuring and reporting the information in their financial statements and related notes

A

Generally Accepted Accounting Principles (GAAP)

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10
Q

Responsible for setting accounting and reporting standards for companies whose securities are publicly traded

A

Securities and Exchange Commission (SEC)

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11
Q

The first private sector body that was delegated the task of setting accounting standards

A

Committee on Accounting Procedure (CAP)

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12
Q

National organization of professional public accountants

A

American Institute of Accountants(AIA)/ American Institute of Certified Public Accountants (AICPA)

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13
Q

The second private sector body delegated the task of setting accounting standards

A

Accounting Principles Board (APB)

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14
Q

The current private sector body that has been delegated the task of setting accounting standards

A

Financial Accounting Standards Board (FASB)

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15
Q

Responsible for selecting the members of FASB and its Advisory Council, ensuring adequate funding of FASB activities, and exercising general oversight of the FASB’s activities

A

Financial Accounting Foundation (FAF)

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16
Q

Responsible for providing more timely responses to emerging financial reporting issues

A

Emerging Issues Task Force (EITF)

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17
Q

Deals with theoretical and conceptual issues and provides an underlying structure for current and future accounting and reporting standards

A

Conceptual Framework

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18
Q

Objectives are to develop a single set of high-quality, understandable global accounting standards, to promote the use of those standards, and to bring about the convergence of national accounting standards and International Accounting Standards

A

International Accounting Standards Board (IASB)

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19
Q

Umbrella organization formed to develop global accounting standards

A

International Accounting Standards Committee (IASC)

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20
Q

Developed by the IASB and used by more than 100 countries

A

International Financial Reporting Standards (IFRSs)

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21
Q

Independent intermediaries who help ensure that management has appropriately applied GAAP in preparing the company’s financial statements

A

Auditors

22
Q

Licensed individuals who can represent that the financial statements have been audited in accordance with generally accepted auditing standards

A

Certified Public Accountants (CPA)

23
Q

A list of rules for choosing the appropriate accounting treatment for a transaction

A

Rules-based accounting standards

24
Q

Approach to standard setting stresses professional judgment, as opposed to following a list of rules

A

Objectives-oriented/principles-based accounting standards

25
Q

A code or moral system that provides criteria for evaluating right and wrong

A

Ethics

26
Q

Primary national organization of accountants working in industry and government

A

Institute of Management Accountants (IMA)

27
Q

National organization of accountants providing internal auditing services for their own organizations

A

Institute of Internal Auditors

28
Q

The quality of being useful to decision making

A

Decision Usefulness

29
Q

One of the primary decision-specific qualities that make accounting information useful; made up of predictive value and/or feed-back value and timeliness

A

Relevance

30
Q

Exists when there is agreement between a measure or description and the phenomenon it purports to represent

A

Faithful Representation

31
Q

Confirmation of investor expectations about future cash-generating ability

A

Predictive value/confirmatory value

32
Q

If a more cost effective way of providing information is not expected to have a material effect on decisions made by those using the information , the less costly method may be acceptable

A

Materiality

33
Q

Neutral with respect to parties potentially affected

A

Neutrality

34
Q

Practice followed in an attempt to ensure that uncertainties and risks inherent in business situations are adequately considered

A

Conservatism

35
Q

The ability to help users see similarities and differences among events and conditions

A

Comparability

36
Q

Permits valid comparisons between different periods

A

Consistency

37
Q

Implies consensus among different measures

A

Verifiability

38
Q

Information that is available to users early enough to allow its use in the decision process

A

Timeliness

39
Q

Users must understand the information within the context of the decision being made

A

Understandability

40
Q

The perceived benefit of increased decision usefulness exceeds the anticipated cost of providing the information

A

Cost Effectiveness

41
Q

In the absence of information to the contrary, it is anticipated that a business entity will continue to operate indefinitely

A

Going Concern Assumption

42
Q

Allows the life of a company to be divided into artificial time periods to provide timely information

A

Periodicity Accounts

43
Q

The annual time period used to report to external users

A

Fiscal Year

44
Q

Process of admitting information into the basic financial statements

A

Recognition

45
Q

Process of associating numerical amounts to the elements

A

Measurement

46
Q

Additionally insights about company operations, , accounting principles, contractual agreements, and pending litigation

A

Disclosure Notes

47
Q

Requires that the earnings process is judged to be complete or virtually complete, and there is reasonable certainty as to be collectability of the asset to be received (usually cash) before revenue can be recognized

A

Realization Principle

48
Q

The goods or services sold to the buyer are delivered (the title is transferred)

A

Point-of-Sale

49
Q

Expenses are recognized in the same period as the related revenues

A

Matching Principle

50
Q

Supplemental information disclosed on the face of financial statements

A

Parenthetical/ modifying comments

51
Q

Reports containing more detailed information than is shown in the primary financial statements

A

Supplemental Financial Statements

ACC-311 (11 decks)

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