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FAR > Concepts CH 1 > Flashcards

Concepts CH 1 Flashcards

1
Q

Fundamental Characteritics

A

Relevance

Faithful Representation

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2
Q

Enhancing Characteristics

A

Compartiability
Verifiability
Timeliness
Understandabiilty

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3
Q

Aspect of Fundamental Charateristics - Faithful Representation

A

Completeness
Freedom From Error
Neutrality

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4
Q

Assumptions

A

Economic Entity
Going Concern
Monetary Unit
Periodicity

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5
Q

Principle

A

Historical Cost
Revenue Recognition
Matching
Full-Disclosure

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6
Q

Constraint

A

Costs (pervaisive)
Industry
Practice
Conservatism

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7
Q

Financial Statements

A

Primary means of coummunication for info to external users

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8
Q

Notes to F/S

A

Present essential info to amplify or explain F/S amounts

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9
Q

Supplementary Info F/S

A

(MD&A) Additional info and more

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10
Q

Accrual Accounting

A 
Accruals
Deferrals
System & Rational Allocation
Amortization
Recognition
Realization
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11
Q

PV Measurement 5 Elements

A 
EFC
Expectation about availability
TMV
Price of uncertainty in an Asset/Liability
Other Factors
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12
Q

Rev Recognition - Measurement

A

Measured by exchange prices of assets and liabilities involved

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13
Q

Rev & Gain Recognized when

A

Goods/Services have been exchanged for cash or claims to Cash - Realized and Earned

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14
Q

Aspect of Fundamental Charateristics - Relevance

A

Materiality
Predictive Value
Confirmatory Value

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15
Q

Objective of Financial Reporting

A

Provide Information

  • Useful in investment and credit decisions
  • Useful in assessing c-flow prospects
  • About entity resources and claims to them and change in them
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16
Q

Only Authoritative financial accounting guidance for non-governmental entites

A

FASB ASC

SEC pronounements

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17
Q

The information financial accounting pertains to

A

Individual business enterprises rather than to industries or economy as whole or to members of society as consumers

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18
Q

MD&A section of annual report

A

Covers three financial aspects of firm’s business: liquidity, capital resources and results of operations

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19
Q

Revenue/Expense recognition cause and effect Direct

A

If a direct relationship exists expense should recognized when revenue is (Sales Commission)

20
Q

Consumption of a benefit may occur when

A

1) Expenses are matched with revenues
2) They are allocated on a systematic and rational basis
3) Cash is spent or liabilities are incurred for goods and services that are used up simultateously or soon there after

21
Q

Gains and Losses result from

A

Peripheral or incidental transactions and from other events and circumstances stemming form environment that may be largely beyond control of entity or management

22
Q

Matching

A

associating cause and effect

23
Q

Accrual Accounting

A

Determination of periodic earnings and financial position is dependent upon the measurement of all economic resources and obligations an changes in them as they occur

24
Q

Only information that can influence users of the financial statements must be reported

A

Materiality

25
Q

Residual Interest in assets

A

Equity

26
Q

Reliabilty

A

Is a qualitative characteristic of GASB’s conceptual framework.

27
Q

Regulation S-X governs

A

the reporting f/s, including notes and schedules for both annual and interim statements

28
Q

The first step in FASB’s standard setting process is

A

ID of financial reporting issues based on communications with stakeholders

29
Q

After FASB analysis step 2

A

Add project to technical agenda

30
Q

Step 3

A

Deliberated at public meetings

31
Q

Step 4

A

Exposure draft

32
Q

Step 5

A

Rediliberate

33
Q

Final Step

A

Majority Vote for ASU

34
Q

Changes in ECF may result in

A

1) Fresh start re-measurement
2) Change in plan interest amortization
Adjusting the carrying amount to PV of remaining future C-flows is preferred

35
Q

What is the underlying concept governing GAAP pertaining to gain contingencies

A

Conservatism

36
Q

Financial Capital Maintenance concept is the basis of

A

1) Traditional F/S
2) Full set of F/S (including CI)
Under this concept, a return on investment results only if the financial amount of net assets at the end of the period exceeds the amount at the beginning of the period. San transaction with owners

37
Q

Reliability is also improved when a valuation method is available that is

A

1) Verifiable
2) Representationally Faithful
3) Free From bias

38
Q

Under conservatism constraint

A

When alternative accounting methods are appropriate, the one have the less favorable effect on net income and total assets is favorable. The understatement of assets is to be avoided so that earnings are not overstated when assets are realized

39
Q

Conservatism constraint however does not permit

A

deliberate understatement of assets and net income (not recognizing contingency gain)

40
Q

Elements of F/S directly related to measuring performance and status

A

1) Assets
2) Liabilities
3) Equity
4) Revenues
5) Expenses
6) Gains
7) Losses

41
Q

Only relate to business

A

1) Owner investment
2) Distributions to owners
3) Comprehensive Income

42
Q

SFAC

A

describe the objectives, qualitative characteristics, elements, and other fundamental concepts that guide the FASB in developing sound accounting principles.
Non authoritative

43
Q

Reporting LIFO inventory at the lower of cost or market (LCM) is a departure from the accounting principle of

A

Historical Cost

44
Q

10K & 10Q Large Accelerated filers

A

60 and 40

45
Q

10K & 10Q Accelerated filers

A

75 and 40

46
Q

10K & 10Q nonaccelerated filers

A

90 and 45

47
Q

Stakehoders of NFP

A

Concerns with services provided and ability to provide them

FAR (22 decks)

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