Conceptual Framework

Question 1

Which of the following information should be disclosed as supplemental information in the statement of cash flows

Answer 1

Cashflow per share

It is specifically prohibited from being disclosed nless it is based on contractual amounts

Question 2

SEC’s website include what rule making procedures

Answer 2

Concept Release, Rule Proposal, Rule Adoption

Question 3

Interim Financial Statements emphasize

Answer 3

Timeliness over faithful representation

Question 4

According to FASB ASC 270-10-45-1, how should companies view interim periods?

Answer 4

They should be viewed as integral part of annual reporting period. Temporary issues that expect to correct themselves need not be reported. But, if loss expected and is not temporary, then should be reported in period of occurrence.

Question 5

What are steps for FASB to issue a new accounting standard?

Answer 5

1. The Board identifies a financial reporting issue
2. FASB decides whether to add a project to the technical agenda based on a staff-prepared analysis of the issue
3. Board deliberates at one more public meetings
4. Board issues an Exposure Draft to solicit input
5. Board holds a public roundtable on the Exposure Draft
6. Staff analyzes comment letters, public discussions and other information obtained
7. Board deliberates the proposed provisions at a public meeting
8. Board issues an Accounting Standard Update

Question 6

What are differences between GAAP and IFRS

Answer 6

GAAP - Rules based

IFRS - Principals based

Question 7

What value goes with RELEVANT

Answer 7

Confirmatory Value

Question 8

Useful information must exhibit the fundamental characteristics of

Answer 8

Faith representation and relevance

Question 9

What is Reporting?

Answer 9

The process of recording an item in the financial statements

Question 10

What are the ingredients of Faithful representation

Answer 10

Completeness, Neutrality, Freedom from material error

Question 11

In doing a net income tax problem, if there is a prior period adjustment, does it affect net income calc?

Answer 11

No, it will be reflected at the beginning of retained earnings

Question 12

Are purchase discounts included in revenue

Answer 12

No. They reduce cost of goods sold

Question 13

Are recovery of accounts written off included in revenue

Answer 13

No

Question 14

What does Current Assets minus Current Liabilities equal?

Answer 14

Working Capital

Question 15

How is a gain that is both unusual and infrequent reported?

Answer 15

Reported as a separate component of income from continuing operations