Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

FAR-BECKER NOTES > F1-NOTES > Flashcards

F1-NOTES Flashcards

1
Q

What is the single source of authoritative nongovermental US GAAP?

A

FASB Accounting Standards Codification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the goal of IFRS and GAAP?

A

Single Set of high-quality international accounting standards that companies can use for both domestic and crossboard financial reporting.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Under Conceptual Framework-

Who are the primary users of Financial reporting?

A

External- Investors, Lenders, and other creditors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the fundamental qualitative characteristics?

A

Relevence and Faithful Representation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the characteristics of relevence?

A

Predictive Value

Confirming Value

Materiality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the characteristics of Faithful Representation?

A

Completeness

Neutrality

Freedom from Error

“Completely Neutral is free from error”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the enhancing qualitative characteristics?

A

Comparability

Verifiability

Timeliness

Understandability

“Compare & Verify in Time to Understand”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is a full set of F/S?

A

Statement of Financial Position (B/S)

Statement of earnings (I/S)

Statement of Comprehensive Income

Statement of Cash Flows

Statement of Changes in Owners’ Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What GAAP method is least lilely to overstate assets and understate liabilitiies?

A

Conservatism Principle

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the elements of F/S?

A

Comprehensive Income

Revenues

Expenses

Gains

Losses

Assets

Liabilities

Equity

Investments by Owners

Distributions by Owners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the 2 fundamental assumptions according to the IASB?

A

Accrual Basis Accounting

Going Concern

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What are the five elements of Present Value Measurement?

A
  1. Estimate of future cash flows
  2. Expectations about timing variations of future cash flows
  3. Time value of money
  4. Price of bearing uncertainity
  5. Other factors (liquidity issues and market imperfections)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is historical costs?

A

Is the actual exchange value in dollars at the time of the transaction

Example: PP&E

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is current cost?

A

is the cost athat would be incurred at the present time to replace an asset, the replacement cost or the lower recoverable amount.

Example: Inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Net Realizable Value?

A

the net realizable value of accounts receivable is the balance of the accounts receivable account less the allowance for uncollectible accounts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the presentation order of the major componenets of an income and retained earnings statement

A

Income from Continuing Operations

Income from Discontinued Operations

Extraordinary Items

Cumulative Effect of change in Accounting Principle

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are the normal losses from discontinued operations?

A

Impairment loss

A g/l from actual operations

A g/l on actual disposal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Under GAAP-

a componenet of an entity may be

A

Operating Segment

Reportable Segment

Reporting Unit

Subsidiary

Asset Group

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Under IFRS-

a component of an entity may be-

A

Major line of business or geographical area of operations

A subsidiary acquired exclusively with a view to resale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the critieria to be held for sale under GAAP and IFRS?

A
  1. Managmenet commits to a plan to sell the component
  2. The componenet is available for immediate sale in its present condition
  3. An active program to locate a buyer has been initiated
  4. The sale of the component is probable and the sale is expected to be complete within one year
  5. The sale of the component is being actively marketed
  6. Actions required to complete the sale make it unlikely that significant changes to the plan will be made or that the plan will be withdrawn
    - Under IFRS- before a componenet can be classified as held for sale, the individual assets and liabilites of the component must be measured in accordance with applicable standards and any resulting gains and losses must be recognized.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

When are the future operating losses expected to be incurred as part of an exit or disposal activity recognized?

A

In the period they occur

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What is the definition of extraordinary items?

A

Material in Nature

Unusual and Infrequent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

How are Non-extraordinary items presented?

A

As a separate component of “continuing operations”

Gross-Before Tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What are some examples of Non-extraordinary items?

A

G/L from slae or abandonment of PP&E used in the business

Large Write downs or writeoffs

G/L from foreign currency transactions or translation

Losses from major strike

LTD extinguishments that are part of a common management stategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Under IFRS - How are extraordinary items recorded?
They are not. Extraordinary items don't exist in IFRS.
26
What are the 3 types of accounting changes?
1. Changes in accounting estimate 2. Changes in accounting principle 3. Changes in accounting entity
27
How are changes in accounting principle accounted for?
Prospective- Implement in current period and continue in future periods
28
What happens if a change in accounting priniciple is inseparable from change in estimate?
Treat as a change in accounting estimate Affects current and future income from continuing operations
29
How are changes in accounting principle accounted for?
GR: Retrospective Application Direct effects of a change in accounting principle are adjustments that would be necessary to restate the F/S of prior periods.
30
What is the cumulative effect if non-comparative financial statements are presented for the change in accounting principle?
The cumulative effect of a change in accounting principle is equal to the difference between the amount of beginning RE in the period of change and what the RE would have been if the accounting change had been retroactively applied to all prior affected periods.
31
What is the cumulative effect if comparative FS are being presented of a change in accounting principle?
The cumulative effect is equal to the difference between beginning RE in the first period presented and what RE would have been if the new principle had been applied to all prior periods.
32
What are the exceptions to the GR for accounting for change in accounting pinciple?
1. Impractible to Estimate- Ex LIFO - too difficult to recalculate layers of inventory 2. Change in depreciation method
33
How do you account for a chang in accounting entity?
Retrospective Application -If comparative FS are presented - Restatement to reflect information for the new entity
34
How do you account for an Error Correction?
RESTATE
35
What is included in OCI?
"PUFER" P-Pension adjustments U- Unrealized gains and losses (available-for-sale securities) F-Foreign currency items E-Effective portion cash flow hedges R- Revaluation surplus (IFRS only)
36
What is comprehensive income?
Is the change in equity (net assets) of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.
37
What is a reclassification adjustment?
Move OCI items from AOCI to the I/S.
38
What is AOCI? Accumulated Other Comprehensive Income-
Is a component of equity that includes the total of OCI for the period and previous Periods.
39
Under GAAP and IFRS - how can CI be presented?
Single Statement of CI Two-Statement Approach - an income statement followed by a separate statement of CI that begins with net income US GAAP ONLY - A statement of changes in equity
40
What does both US GAAP and IFRS require as an integral part of the F/S?
Description of all significant policies
41
What accounting policies are commonly described in the description of significant policies?
Basis of consolidation Depreciation Method Amortizaton of intangibles Inventory Pricing Accounting for Recognition of profit on LT construction contracts Recognition of revenue from franchising or leasing operations
42
What are some items not included in the footnote of accounting policies?
Composition of accounts and amounts in dollars of account balances Details relating to changes in accounting principles Dates of maturity and amounts of LTD Yearly computation of depreciation, depletion and amortization
43
What are some of the other notes to the F/S not presented in the body of the F/S or the Summary of Significant Accounting Policies?
Changes in Stockholders equity Required marketable securities (carrying value & gross unrealized G/L) Contingency Losses Contractual Obligations (including restrictions on specific assets or liabilities) Pension Plan Descriptions Post-Balance Sheet Disclosures
44
What are some examples of Related Party Transactions?
Sales, puchases and transfers of real or personal property Services received or furnished - such as acccounting, management, engineering and legal Use of property and equipment by lease or otherwise Borrowings, ledings and guarantees Maintenance of compensating bank balances for the benefit of a related party Intra-entity billings based on allocations of common costs Filings of consolidated tax returns
45
Iterim Fiancial Reporting -Just some information
- Not required under US GAAP or IFRS - Public companies must file with the SEC - Timeliness over Reliability (Unaudited) - An integral part of Annual F/S - Income tax expense is estimated each quarter
46
How does Segment Reporting help users of F/S?
- Better understand the enterprises's performance - better assess its prospects for future net cash flows - Make more informed judgements about the enterprise as a whole
47
What are the required disclosures for all Public Enterprises?
1. Operating Segments (annual and interim) 2. Products and Services 3. Geographic Areas 4. Major Customers
48
What accounting principles do you use for segment reporting?
Use the same accounting principles as the Main F/S
49
What is the Quantitative Thresholds for Reportable Segments?
_1. 10% "Size" Test_ a. Revenue- Segment's reported revenue is 10% or more of the combined revenue, internal and external, of all operating segments b. Reported P&L - 10% more of profit or loss of combinted operating segments c. Assets - Segment's assets are 10% more of combined assets 2. 75% "Reporting Sufficiency" Test - If the total of external (consolidated) revenue reported by operating segments constitutes less than 75% of external (consolidated) revenue, additional operating segments need to be identified as reportable segments, even if they do not meet the above 3 tests, until at least 75% of external (consolidated) revenue is included in reportable segments
50
What happens during a development stage?
A company devotes most of its activities and resources toward establishing the business - Start-up, Organizational Costs=expense immediately under GAAP
51
What happens at the first time adoption of IFRS?
An entity's first IFRS F/S are the first annual F/S in which the entity adopts IFRS and makes an explicit and unreserved statement in those F/S of compliance with IFRS.
52
What must the entity's first IFRS F/S include?
3 B/S 2 Statements of CI 2 I/S 2 Statement of Cash Flows 2 Statements of Changes in Equity Related Notes
53
What should an entity dislcose?
How the transitition from previouse GAAP to IFRS affected its reported financial position, financial performance, and cash flows.
54
When a company issues new securities, it is required to submit a registration statement to the SEC that includes:
1. Disclosures about the secuitities being offered for sale 2. The relationship of the new securities to the company's other securities 3. Information similar to that filed in the annual filing 4. Audited F/S 5. A description of business risk factors
55
What is the form 10-K?
Must be filed annually by US registered companies. The filing deadline for Form 10-K is 60 days after the end of the fiscal year for large accelerated filers, 75 days after the end of the fiscal year for accelerated filers, and 90 days after the end of the fiscal year for all other registrants. These forms contain financial disclosures, including cummary of financial datat, management's discussion and analysis (MD&A), and audited F/S prepared using GAAP.
56
What is the form 10-Q?
Form 10-Q must be filed by US Registered companies (issuers). The filing deadline for Form 10-Q is 40 days after the end of fiscal quarter for large accelerated fileres and acceleraged filers, and 45 days after the end of the fiscal quarter for all other registrants. This form contains unaudited F/S prepared using US GAAP, interim period MD& A and certain disclosures
57
What is form 11-K?
This is the annual report of a company's employee benefit plan(s).
58
What are forms 20-F and 40-F?
These forms must be filed annually by foreign private issuers. Form 40-F is filed by specific Canadian companies registered witht he SEC and Form 20-F is filed by other non-US Registrants. These forms are similar to Form 10-K and contain financial disclosures, including a summary of financial data, managements discussion and analysis (MD&A), and audited F/S. The F/S may be prepared using GAAP, IFRS or a comprehensive body of accounting principles other than GAAP or IFRS.
59
What is Form 6-K?
This form is filed semi-annually by foreign private issures. This form is similar to the Form 10-Q and contains unaudited F/S, interim period MD&A, and certain disclosures.
60
What is Form 8-K?
This form is filed to report major corporate events such as corporate asset acquisitions or disposals, changes in securities and trading markets, changes to accountants or FS, and changes in corporate governance or management.
61
What are Forms 3, 4 and 5?
These forms are required to be filed by directors, officers, or beneficial owners of more than 10% of a class of equity securities of a registered company.
62
What is the Regulation S-X?
The SEC sets forth the "form and content" of and requirements for interim and annual FS to be filed with the SEC.
63
What are XBRL?
XBRL is a royalty free, open specification for software that use XML (Extensible Markup Language) data tags to describe financial information for business and fnancial reporting.
64
What is an XBRL Tag?
A machine readable code that gives a standard definition for each line in an IS, cash flow statement, BS or other financial or non-financial data, including data contained in the notes to the FS. Recognized and processed by software
65
What is taxomony?
A taxonomy defines the specific tags used for individual items of business and financial data.
66
What is the SEC Interactive Data Rule?
The SEC's Interactive Data Rule requires US public companes and foreign private issuers to present FS and any applicable FS schedules in an exhibit prepared using XBRL.
67

FAR-BECKER NOTES (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions