Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CPA Prep > FAR 1 > Flashcards

FAR 1 Flashcards

1
Q

What is the SEC?

A

Securities and Exchange Commission - Established by the Securities and Exchange Act of 1934

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

What is FASB?

A

Financial Accounting Standards Board - Established in 1973 - charged with the responsibility for determining what U.S. GAAP is.

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

What is GAAP?

A

Generally Accepted Accounting Principles - it is the FASB accounting standards Codification.

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

What is IASB?

A

International Accounting Standards Board - The international version of FASB.

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

What is IFRS?

A

International Financial Reporting Standards - The IASB issues IFRS (GAAP’s counterpart)

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

What is the framework for FASB called?

A

Statements of Financial Accounting Concepts (“SFAC”)

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

What statements are included in the “Full Set of Financial Statements”

A 
Statement of financial position (Balance Sheet)
Statement of Earnings (Income Statement)
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
8
Q

What SFAC section are the guidelines for Recognition and Measurements in the Finacial Statements located?

A

Section 5

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

What two fundamental assumptions are found in both GAAP and in IFRS?

A

Accrual Basis for accounting and going concern

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

What is going concern?

A

The assumption that the entity will continue into the foreseeable future.

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

TRUE OR FALSE: The income statement measures performance at one point in time.

A

False: Over a Period of time.

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

What is the fundamental difference between revenue and expenses vs. gains and losses?

A

Gains and losses are not a part of your core business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

When can you make a change in accounting principle?

A

When it more fairly reports an entities position.

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

IDEA stands for:

A

I Income from continuing operation
D Income from Discontinued operations
E Extraordinary operations
A cumulative effect of change in Accounting Principals

DEA are all net of tax. Only I is gross of tax.

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

List the fundamental steps in a multi-step income statement

A 
Net Sales
Cost of Sales
Gross Margin
Selling Expenses
General and Administrative Expenses
Depreciation Expense
Income (loss) from operations
Interest Income
Gain on sale of fixed assets
Other income
Interest Expense
Loss on sale of fixed assets
Unusual or infrequent items
Income before income tax
current taxes
deferred taxes
Net income
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

List the fundamental steps in a single-step income statement

A

Total Revenues
Total Expenses
Net Income

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

According to the FASB and IASB conceptual frameworks, completeness is an ingredient of Relevance or Faithful Representation, both or neither?

A

Faithful Representation

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

If you sell a fixed asset that is used for operations for greater than its carrying amount you should report the transaction in the income statement using the ______ (net or gross) concept showing the total gain as a part of continuing operations _______ (net or not net) of income taxes

A

Net; not net

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

Which should be included in SG&A expense: Interest, advertising, both or neither.

A

Neither

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

Are foreign currency losses included in extraordinary losses?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What does PUFE stand for?

A

P Pension adjustment
U Unrealized gains and losses
F Foreign currency items
E Effective portion cash flow hedges

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

What does comprehensive income include?

What is OCI

A

Net Income plus OCI (Other Comprehensive Income)

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

TRUE OR FALSE: Comprehensive income should be reported on a per share basis.

A

FALSE

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

What is a classified balance sheet?

A

A classified balance sheet distinguishes current vs. non-current assets and liabilities

25
Q

List the major sections of the Balancesheet

A 
Assets
Current Assets
Investments
Property Plant & Equipment ("PP&E")
Intangible Assets
Other Assets
Total Assets

Current Liabilities
Total Liabilities
Stockholders Equity

26
Q

TRUE OR FALSE: Treasury Stock is a contra-equity item

A

True

27
Q

TRUE or FALSE: The same accounting principles for subsidiaries must be match the principles used by the parent company.

A

TRUE

28
Q

TRUE or FALSE: Intercompany transactions must be eliminated for reporting.

A

False: Intercompany transactions must NOT be eliminated for reporting purposes.

29
Q

What information must a parent company disclose regarding its subsidiaries?

A

Operating segments (annual and interim)
Products and services
Greographic Areas
Major Customer

30
Q

By definition what is an operating segment.

A

Operating Segments are entities that engage in business activities which may earn revenues and incur expenses.
They have operating results that are regular reviewed by the companies chief executives.
For which discrete financial information is available.

31
Q

What are the two tests to determine if a segment is considered reportable?

A

10% Size Test and the 75% reporting sufficiency test

32
Q

Explain the 10% size test

A

Must meet at least one of the three components.

Revenue: Revenue generated by this segment is greater than or equal to 10% of total parent company revenues (excluding said segment).

Reported Profit or Loss: A segment meets the size test if the absolute amount of its reported profit or loss is 1% or more of the greater, in absolute amount of the combined reported loss of all operating segments that did not report a loss or that did report a loss.

Assets, if the assets held by the segment are greater than or equal to 10% of the parents total assets (excluding said segment).

33
Q

TRUE or FALSE: The same accounting principles for subsidiaries must be match the principles used by the parent company.

A

TRUE

34
Q

How are segments reported that do not meet the 10% or 75% tests?

A

They are classified as “all other segments”

35
Q

What information must a parent company disclose regarding its subsidiaries?

A

Operating segments (annual and interim)
Products and services
Greographic Areas
Major Customer

36
Q

By definition what is an operating segment.

A

Operating Segments are entities that engage in business activities which may earn revenues and incur expenses.
They have operating results that are regular reviewed by the companies chief executives.
For which discrete financial information is available.

37
Q

What are the two tests to determine if a segment is considered reportable?

A

10% Size Test and the 75% reporting sufficiency test

38
Q

Explain the 10% size test

A

Must meet at least one of the three components.

Revenue: Revenue generated by this segment is greater than or equal to 10% of total parent company revenues.

Reported Profit or Loss: A segment

39
Q

Explain the 75% reporting sufficiency test

A

At least 75% of company revenue should be included in “reportable segments” no more than 10 segments can be included in “all other segments” or non-reportable segments.

40
Q

How are segments reported that do not meet the 10% or 75% tests?

A

They are classified as “all other segments”

41
Q

What is the formula for segment reporting?

A

Revenues
-Directly traceable costs
-Reasonably allocated costs
=Operating Profit (loss)

42
Q

Items that are normally excluded from segment reporting?

A

General corporate revenues/expenses

Anything after EBIT

43
Q

What is a “Development-Stage Enterprise”

A

A company where operations have not yet commenced or where revenue is insignificant.

44
Q

What type of information should a “Development-Stage Enterprise” include in addition to the typical financial statements that are required by GAAP?

A

Cumulative Infomration

45
Q

When adopting IFRS for the first time. How many years of financial statements do you need to provide?

A

3 Years of Balance Sheets, 2 Years of everything else.

46
Q

Where will the net adjustment hit for adjusted Assets & Liabilities when issuing IFRS statements for the firs time.

A

Retained Earnings

47
Q

What must an entity provide along with its adjusted financials when moving to IFRS?

A

An explanation and summary of differences between GAAP and IFRS.

Reconciliation of Equity, Comprehensive Income, and disclosures related to the recognition or reversals that were recognized of impairment losses.

48
Q

What is a 10-k?

A

Annual financial statements

49
Q

What is a 10-Q

A

Quarterly financial statements (U.S. Registered Companies only) (these statements are unaudited)

50
Q

What is a registration statement?

A

Used when entity will issue new securities.

51
Q

What is an 11-K

A

Annual report of a company’s employee benefit plan.

52
Q

What are forms 20-F and 40-F

A

Similar to 10-k but for foreign private issuers. These can be filed using GAAP, IFRS, or other.

53
Q

What is a 6-K?

A

Like a quarterly report; filed by foreign issuer. Filed semi-annually

54
Q

Form 8-K?

A

Filed when company makes incurs a major event such as a acquisition or disposal.

55
Q

Forms 3,4, and 5?

A

Filed by persons owning 10% or more of a publically traded company.

56
Q

What is Regulation S-X?

A

The requirements for financial reporting by the SEC

57
Q

How many years of statements are required under regulation s-x?

A

BS -2 IS/CF -3

58
Q

What is SEC XBRL?

A

Allows companies to use free software to make financial statements more computer friendly.

CPA Prep (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions