FAR 1

Question 1

4 Enhancing Qualitative Characteristics

Answer 1

Comparability, Verifiability, Timeliness, Understandablility

Question 2

Ingredients of Faithful Representation

Answer 2

Completeness, Neutrality, Freedom from Error

Question 3

Relevance

Answer 3

Predictive Value, Confirming Value, Materiality

Question 4

Change in Accounting Adjustment

Answer 4

Only the current and future periods if the change affects both. No prior period adjustments

Question 5

Change in Entity Adjustment

Answer 5

FS for all prior periods presented should be adjusted

Question 6

Disposing am Operating Segments

Answer 6

For CY: actual losses. Do not include +1 estimated losses or gain on disposal if they are not in the CY.

Question 7

Change in Estimate Adjustment

Answer 7

Affect only the current and subsequent periods. Will be reported in income from continuing operations

Question 8

Comprehensive Income Formula

Answer 8

Net Income + Other Comprehensive Income

Question 9

Components of OCI

Answer 9

Changes in the funded status of a pension plan, unrealized G/L on AFS Securities, unrealized G/L on derivatives designated as cash flow hedges, foreign currency items, instrument specific credit risk

Question 10

Comprehensive income includes all changes in equity during a periods except…

Answer 10

those resulting from owner investments and distributions to owners (capital contributions/dividends paid to owners)

Question 11

What is the purpose of reporting comprehensive income

Answer 11

Summarize all changes in equity from non-owner sources