F-1 CONCEPTUAL FRAMEWORKS Flashcards

1
Q

Q:Name the single source of authoritative nongovernmental U.S. GAAP.

FAR 1-1

A

The FASB “Accounting Standards Codification” (ASC).

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2
Q

Q: The term “International Financial Reporting Standards” includes what standards?

FAR 1-2

A
  • International Accounting Standards (IAS).
  • International Financial Reporting Standards (IFRS).
  • IFRIC Interpretations.
  • SIC Interpretations.
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3
Q

Q: Who are the primary users of general purpose financial reports?

FAR 1-3

A

Existing and potential:

  • Investors
  • Lenders
  • Other creditors
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4
Q

Q: Name the pervasive constraint on the information provided in financial reporting.

FAR 1-4

A
  • Cost Constraint:*
  • The benefits of reporting financial information must be greater than the costs of obtaining and presenting the information.
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5
Q

Q: Name the fundamental qualitative characteristics of useful financial information.

FAR 1-5

A

Relevance and Faithful Representation.

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6
Q

Q: Name the three elements of *relevance. *

A
  • Predictive value
  • Confirming value
  • Materiality
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7
Q

Q: Name the three elements of *faithful representation. *

FAR 1-7

A
  • Neutrality
  • Completeness
  • Freedom from error
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8
Q

Q: Name the enhancing qualitative characteristics of financial information.

FAR 1-8

A
  • Comparability, Verifiability, Timeliness, and Understandability.
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9
Q

Q: According to SFAC #5, what should a full set of financial statements include?

FAR 1-9

A
  • Statement of Financial Position (the balance sheet)
  • Statement of Earnings (the income statement)
  • Statement of Comprehensive Income
  • Statement of Cash Flows
  • Statement of Changes in Owners’ Equity
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10
Q

Q: What is the difference between realization and recognition?

FAR 1-10

A
  • Realization: When sold and converted to cash (or claims to cash).
  • Recognition: When recorded in the financial statements.
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11
Q

Q: List the 10 elements of financial statements according to SFAC #6.

Hint: “CREG” and “LALEID”

FAR 1-11

A
  • Comprehensive Income
  • Revenues
  • Expenses
  • Gains
    and

Losses
• Assets
Liabilities
Equity (of Net Assets)
Investments by Owners
Distributions to Owners

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12
Q

Q: List the six elements of financial statements according to the IASB Framework.

FAR 1-12

A
  • Assets
  • Liabilities

• Equity

  • Income (revenue and gains)
  • Expenses (expenses and losses)
  • Capital maintenance adjustments
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13
Q

Q: Name the five elements of present value measurement per SFAC #7.

Hint: “EVTUO”

FAR 1-13

A
  • Estimate of future cash flow
  • Expectations about timing Variations of future cash flows
  • Time value of money (the risk-free rate of interest)
  • The price for bearing Uncertainty
  • Other factors (e.g., liquidity issues and market imperfections)
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14
Q

Q: Describe the expected cash flow approach for present value computations.

FAR 1-14

A
  • Considers a range of possible cash flows and assigns a (subjective) probability to each cash flow in the range to determine the weighted-average, or “expected”, future cash flow.
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