FAR 2A

Question 1

The concept of “other comprehensive basis” means a comprehensive basis of accounting other than

Answer 1

pure (or full) accrual accounting under US GAAP.

Question 2

When the cash basis or the modified cash basis of accounting is used, the title Income Statement, which is appropriate when the accrual basis of accounting is used, should be replaced by

Answer 2

The title Statement of Cash Receipts and Cash Disbursements. This helps distinguish that the statement is not based on full accrual accounting consistent with U.S. GAAP.

Question 3

The PCC(Private Company Council) allows private companies to amortize goodwill over a period to not exceed

Answer 3

10 years

Question 4

What is the purpose of the Private Company Council?

Answer 4

To assist the FASB in identifying whether and when a private company accounting standard should be developed.

Question 5

In liquidation basis accounting, _______ are not measured at the expected cash to be paid or received?

Answer 5

Notes payable. Liabilities are to be measured using existing GAAP and not written down based on “expectations” unless legally forgiven.

Question 6

Which of the following is the purpose of the liquidation basis accounting?

Answer 6

To inform the financial statement users that liquidation is imminent.

Question 7

In personal financial statements, how should estimated income taxes on the excess of the estimated current values of assets over their tax bases be reported in the statement of financial condition?

Answer 7

Between liabilities and net worth

Question 8

Which statements are usually included in a set of personal financial statements?

Answer 8

A statement of financial condition and a statement of changes in net worth.

Question 9

What is an objective of the IFRS Foundation?

Answer 9

To take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings.

Question 10

SEC is not included in the definition of

Answer 10

IFRS, International Financial Reporting Standards.

Question 11

Under IFRS for SMEs, goodwill is assumed to have a limited life and is

Answer 11

amortized over that life, or a period not to exceed 10 years if the life cannot be reasonably estimated.

Question 12

Under IFRS for SMEs, neither __________, nor _________ is required in financial statements.

Answer 12

Earnings Per Share (EPS), information by segment

Question 13

Under IFRS for SMEs, either the ________ or ________ may be used by an investor to account for an investment in another entity.

Answer 13

cost method, equity method