Chapter 1

Question 0

Decision-usefulness

Answer 0

Investors are interested in assessing the companies

1. Ability to generate cash flows
2. Management’s ability to protect and enhance the capital providers investments.

Question 1

Entity perspective

Answer 1

Companies viewed as separate and distinct from their owners

Question 2

GAAP

Answer 2

Generally accepted accounting principles

Question 3

SEC

Answer 3

Securities and Exchange Commision

Question 4

AICPA

Answer 4

American institute of certified public accountants

Question 5

FASB

Answer 5

Financial accounting standards board

Question 6

FASB mission

Answer 6

To establish and improve standards of financial accounting and reporting

Question 7

Major sources of GAAP

Answer 7

1. FASB standards, interpretations, and staff positions
2. APB opinions
3. AICPA accounting research bulletins

Question 8

CRS

Answer 8

Financial accounting standards board codification research system

Question 9

PCAOB

Answer 9

Public company accounting oversight board

Question 10

Financial reporting challenges

Answer 10

1. Non-financial measurements
2. Forward-looking information
3. Soft assets
4. Timeliness

Question 11

IASB

Answer 11

International accounting standards board

Question 12

IFRS

Answer 12

International financial reporting standards

Question 13

CAP

Answer 13

Committee on accounting procedure

Question 14

ARB

Answer 14

Accounting research bulletins

Question 15

APB

Answer 15

Accounting principles board

Question 16

FAF

Answer 16

Financial accounting foundation

Question 17

FASAC

Answer 17

Financial accounting standards advisory council.

Question 18

SOP

Answer 18

Statement of position