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FAR CPA EXAM > FAR flash card 2 > Flashcards

FAR flash card 2

1
Q

Under GAAP, a development-stage enterpise is one in which either

A

Principal operations have not yet commenced or Prinicipal operations have generated an insignificant amount of revenue(or a loss)

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2
Q

A development stage enterpise must issue the same

A

financial statements as any other enterprise

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3
Q

In development stage enterprise, statements should be prepared would disclosures

A
  1. Cumulative net loss in the balance sheet
  2. Cumulative amount from the company’s inception showing revenue and expenses for each period being presented in the income statement
  3. Cumulative amount of cash inflows and outflows in the statement of cash flow
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4
Q

Has not standardized fair value measurement and

disclosure

A

IFRS

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5
Q

Addressed on a topic by topic basis within the IFRS standards

A

Fair Value

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6
Q

Areas that do not permit fair value measurement

A

Shared based compensation, inventory pricing, measurements based on or using vendor-specific objective evidence of fair value, fair value measurements used for lease classification or measurement

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7
Q

Is the price to sell an asset or transfer a liability in an orderly transaction

A

Fair Value

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8
Q

Does not include transaction cost but may include transportation costs

A

Fair Value

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9
Q

Assumes the highest and best use of asset

A

Fair Value

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10
Q

Is one in which the asset or liability is exposed to the market for a period before the measurment date long enough to allow for marketing

A

Orderly Transaction

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11
Q

Cannot be a forced transaction

A

Orderly Transaction

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12
Q

Buyers and sellers who are independent

A

Market Participants

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13
Q

Market with the greatest volume or level of activity for the asset or liability

A

Principal Market

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14
Q

Is the market with the best price for the asset or liability, after considering transaction costs

A

Most Advantageous Market

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15
Q

Fair Value of an asset or liablility can be measured using what valuation technique

A

Market Approach,Incom Approach, Cost Approach or a combinaiton

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16
Q

Identical or comparable assets

A

Market Approach

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17
Q

Convert future amounts, including cash flows or earnings to a single discount

A

Income Approach

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18
Q

Uses current replacment cost

A

Cost Approach

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19
Q

GAAP exemptions to the requirement to measure fair value exist when:

A

Not practicable to measure, cannot be reasonbly determined, cannot be measured with sufficient reliability

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20
Q

Valuation techniques should maximize the use of observable inputs such as

A

Level 1 and Level 2

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21
Q

Valuation techniques should minimize the use of unobservable inputs

A

Level 3

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22
Q

Quoted prices in active markets for identical assets and the most reliable

A

Level 1 Inputs

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23
Q

Level 2 Input Include

A

quoted prices for similar assets or liablitites in active markets, quoted prices for identical or similar assets in market that are not active

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24
Q

Can be directly or indirectly observable for the assets or liablity

A

Level 2 Input

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25
Q

An enterprise is required to disclose segment profit or loss, segment assets, and certain related items but is not required to report segment

A

cash flow

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26
Q

Requires the disclosure of segment liablities if such a measure is regularly provided to the chief operating decision maker

A

IFRS

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27
Q

Do not require the disclosure of segment liablities

A

GAAP

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28
Q

All public enterprise must report information about

A

Operating segment,products and services, geographic areas, major customers

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29
Q

Segment reporting applies to

A

Public companies only

30
Q

XBRL taxonomies include

A

XBRL U.S. GAAP Financial Reporting Taxonomy,XBRL IFRS Taxonomy, Global Ledger Taxonomy, Industry Specific Taxonomies, Company Specific Tags

31
Q

Tell computers how to interpret the context of the text

A

XML and XBRL

32
Q

Tell computers how to display text

A

HTML

33
Q

Exhibit is required with the filer’s SEC registration statements

A

Quarterly and annual reports, and reports 6-K and 8-K containing revised or updated financial statement

34
Q

An instance document is an XBRL formatted document that contains

A

tagged data

35
Q

Tagged disclosures must include the

A

primary financial statements, notes, and financial statement schedules

36
Q

Transactions between the segments of an enterprise are not

A

Eliminated

37
Q

Reporting is not required under GAAP or IFRS, both provide gudiance to be used when interim information is presented

A

Interim financial reporting

38
Q

What reporting is generally concerned with the quarterly reports that public companies must file with the SEC

A

Interiming Reporting

39
Q

GAAP that were used in the most recent annual report of an enterprise should be applied to

A

Interim financial statements of the current year

40
Q

For interim reporting only, timiliness is emphasized over

A

Reliablity

41
Q

Allows the effective tax rate to be estimated using enacted or substantially enacted changes in tax rate

A

IFRS

42
Q

Allows the use of enacted tax rate only

A

GAAP

43
Q

The estimate of the effective tax rate expected to be applicable for the full fiscal year should reflect all tax planning alternatives including

A

Foreign tax rates, percentage depletion, capital gains rate, and anticpated investment tax credits

44
Q

Interim financial statements must be viewed as an

A

integral part of the financial statements.

45
Q

Interim financial statements generally are not audited, each statement presented should be marked

A

Unaudited

46
Q

GAAP and IFRS require that a desciption of all significant policies be included as an

A

intergal part of fianancial statements

47
Q

Requires an explicit and unreserved statement of compliance with ______ in the notes to the financial statements

A

IFRS

48
Q

Chang in accounting principle s/b recognized by adjusting

A

beginning retained earnings in the earliest period presented

49
Q

Useful in determing profitability, value for investment purposes, and credit worthiness and predicting information aobut future cash flows base on past peformance

A

Income Statement

50
Q

Does not consider the use of cash flow information and present value in accounting measurements

A

IASB Framework

51
Q

Includes all differences between beginning equity and ending equity other than transactions with owners

A

Comprehensive Income

52
Q

what are the two fundamental assumptions outline by IASB Framework

A

Accural basis accounting and going concern

53
Q

Does not separately consider business and nonbusiness enterprises, but instead provides one framework that applies to all entities

A

IASB Framework

54
Q

If fair value cannot be determined in the marketplace, the objective must be to obtain an

A

Estimated of fair value

55
Q

What are the three qualities of reliablity

A

Neutrality, Respresentation Faithful, Verifiablity

56
Q

FASB determined that when using present value, the objective of estimating the fair value of a liablity must consider other factors such as

A

Costs to settle, Credit standing of the company

57
Q

Before the joining the board the Board Members must sever connections with

A

Firms or Institution

58
Q

Has five(5) full time members who serve for five year terms and may be reappointed to one(1) additional five year term

A

FASB

59
Q

How many member of IASB must approve an Exposure Draft for issuance

A

9 members

60
Q

The quality of relevance has three sub-categories

A

Mnemonic (Passing Feel Terrific)

  1. Predictive Value
  2. Feedback value
  3. Timeliness
61
Q

Primary Qualities of Decision Usefulness

A

Relevance and Reliablity

62
Q

IASB has how many members

A

12 full time members and 2 part -time members

63
Q

defines the potential users of financial reporting as those who base their decisions on their relationships to and knowledge about the business enterprise.

A

SFAC No. 1

64
Q

What are the 3 constraints of IASB Framework

A
  1. Timeliness
  2. Balance b/w benefit and cost
  3. Balance b/w the qualitative characterics
65
Q

Serves as a link b/w the characteristic of users and the decision-specific qualities of information

A

Understandability

66
Q

Displays other comprehensive income below the income statement and totals them for comprehensive income

A

Single Statement Approach

67
Q

Single Statement Approach, start with

A

Revenue

68
Q

Two-statement Approach starts with

A

Net Income

69
Q

Displays comprehensive income as a separate statement that begins with net income

A

Two statement Approach

70
Q

Comprehensive income may be displayed as a separate column in the statement of owners’ equity, under

A

GAAP

71
Q

Comprehensive income should not be reported on a

A

per share basis

72
Q

Prohibits the presentation of comprehensive income in the statement of changes in equity

A

IFRS

FAR CPA EXAM (19 decks)

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