chapter 1 standard setting and income statement Flashcards

1
Q

GAAP self-regulated?

A

Yes

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2
Q

FEDPRIA

A

FASB Emerging issues Task Force Derivative implementation group issues Accounting Principles board opinions Accounting Research Bulletins Accounting Interpretations AICPA

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3
Q

SEC Standards

A

Regulation for accounting is emerging Regulation S-X Financial Reporting Releases Accounting series releases Interpretative Releases Staff Accounting Bulletins EITF topic D and SEC staff observer comments

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4
Q

Primary Users?

A

Existing and potential investors, lenders and other creditors. government sec X

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5
Q

Qualitative characteristics of useful financial information

A

Relevance and faithful

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6
Q

relevance

A

capable of making a difference in the decisions made by users passing confirms money Predictive value:predict future confirming value: provides feedback materiality:

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7
Q

Faithful

A

Reliable completely neutral is free from error completeness neutrality:free from bias freedom from error

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8
Q

enhancing qualitative charateristics

A

compare and verify in time to understand comparability verifiability timeliness understandability

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9
Q

revenue recognition principle

A

earned: entity has substantially accomplished realized

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10
Q

matching principle

A

expenses are necessarily incurred to generate revenue

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11
Q

Elements of Financial Statements

A

REGL AlE needs ID Comprehensive Revenue Expense Gain loss Assets Liability Equity Investments by owners Distributions to owners: these two excluded from comprehensive ubcine

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12
Q

IFRS Capital maintenance adjustments?

A

are increases and decreases in equity that arise from the revaluation or restatement of assets and liabilities.

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13
Q

Five elements of present Value measurement a. estimate of future cash flow b. expectations about timing variations of future cash flows c. time value of money( the risk-free rate of interest) d. the price for bearing uncertainty e. other factors( liquidity issues and market imperfections)

A

c d e impacts discount rate and future cash flow

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14
Q

Reported on Income Statement

A

IDEA Income from continuing:operating activities+non operating gross of tax then net of tax Discontinued net of tax Extraordinary items net of tax Reported on Statement of Retained earnings! cumulative effect of change in accounting principle net of tax

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15
Q

inventory cost

A

purchase price + freight in

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16
Q

selling expense

A

freight out, salaries and commissions, advertising

17
Q

general administrative

A

officer’s salaries, accounting and legal, insurance

18
Q

non-operating

A

auxiliary activities, interest expense

19
Q

to LIFO and change in depreciation method

A

prospective

20
Q

cost method to Equity method

A

restate

21
Q

equity to cost method

A

prospective

22
Q

retained earnings

A
23
Q

Discontinued operation for IFRS

A

must be measured and component is reported at the lower of carrying value and fair value less costs to sell

24
Q

anticipated future gains or losses for discountined segment

A

not recognized until they occur

25
Q

Impariment loss+operating loss+gain/loss on disposal

A

=loss from discontined operation (before tax)

26
Q

infrequent but not unusual

A

seperate item as income from continue operation

27
Q

new estimate

A

prospective and in income from continue operation

28
Q

when a fixed asset is sold, gain or loss is recognized as part of income from

A

continuing operations. the amount of the gain or loss is =proceeds from the sale and the carrying amount of the fixed asset sold