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FAR Personal Flashcards > FAR Module 9 Misc. > Flashcards

FAR Module 9 Misc. Flashcards

0
Q

SFAC 8, Chapter 1 covers what? (List of 6)

A

The objectives of general-purpose financial reporting. These include:

1) Information that is useful to primary users
2) information about the reporting entities assets and liabilities
3) changes in assets and liabilities
4) financial performance reflected by accrual accounting
5) financial performance reflected by past cash flow
6) changes in assets and liabilities not resulting from financial performance

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1
Q

What is the single source of US GAAP for non-governmental entities

A

The FASBs Accounting Standards Codification

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2
Q

SFAC 8, Chapter 3 covers what?

A

Qualitative characteristics of useful financial information (this is the chart outlining the pervasive constraint, fundamental qualitative characteristics, enhancing qualitative characteristics, and the threshold for recognition)

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3
Q

SFAC 6 covers what?

A

Elements of financial statements

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4
Q

What are the 10 Elements of Financial Statements outlined under the FASB SFAC 6

A 
Assets
Liabilities
Equity/Net Assets
Revenues
Expenses
Gains
Losses
Investments by owners
Distributions to owners
Comprehensive Income
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5
Q

What are the 4 basic assumptions regarding a business in accounting?

A

Economic Entity Assumption
Going concern assumption
monetary unit assumption
periodicity assumption

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6
Q

Under this assumption economic activity can be identified with a particular unit of accountability

A

Economic entity assumption

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7
Q

Under this assumption the business enterprise will have a long life.

A

The going concern assumption

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8
Q

Under this assumption money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis

A

The monetary unit assumption

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9
Q

Under this assumption the economic activities of an enterprise can be divided into artificial time periods. We report financial information periodically to apprise users of performance and economic status

A

The periodicity assumption

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10
Q

What are the four basic principles of accounting

A

The historical cost principle, the revenue recognition principle, the matching principle, the full disclosure principle

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11
Q

Under this principle GAAP requires that most assets and liabilities be accounted for and reported on the basis of acquisition price because it is the most reliable valuation

A

The historical cost principle

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12
Q

Under this principle revenue is generally recognized when realized or realizable, or earned.

Revenues are realizable when assets received or held are readily convertible into cash or claims to cash.

Revenues are considered earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues.

A

The revenue recognition principle

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13
Q

Under this principle expenses are to be matched to the revenues whenever it is reasonable and practicable to Do so

A

The matching principle

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14
Q

Under this principle accountants use their judgment in deciding what gets reported on the financial statements. If something does not appear on the statements then it may appear in the footnotes or in supplementary information.

A

The full disclosure principle

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15
Q

These generally amplify or explain the items in the main body of the statements

A

Footnotes

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16
Q

this contains other information that may be highly relevant but less reliable

A

Supplementary information

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17
Q

What are the three constraints in accounting

A

Cost-benefit relationship
materiality
conservatism

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18
Q

This constraint says that information is expensive. The costs of providing information must not outweigh the benefits that can be derived from using the information

A

Cost-benefit relationship

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19
Q

This constraint says that an item is material if it’s inclusion or omission would influence or change the judgment of a reasonable person

A

Materiality

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20
Q

This constraint says that when in doubt choose the solution that will be least likely to overstate assets and income

A

Conservatism

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21
Q

What section of the FASB ASC covers GAAP presentation

A

100

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22
Q

What section of the FASB ASC covers presentation of financial statements

A

200

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23
Q

What section of the FASB ASC covers assets

A

300

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24
Q

What section of the FASB ASC covers liabilities

A

400

25
Q

What section of the FASB ASC covers equity

A

500

26
Q

What section of the FASB ASC covers revenue

A

600

27
Q

What section of the FASB ASC covers expenses

A

700

28
Q

What section of the FASB ASC covers broad transactions

A

800

29
Q

What section of the FASB ASC covers industry

A

900

30
Q

What section of the FASB ASC covers not for profit

A

This falls under industry, 900

31
Q

List the elements under the IASB framework

A 
Assets
Liabilities
Equity
Income
Expenses
32
Q

T/F

The IASB framework is an accounting standard and overrides any accounting treatment otherwise required

A

False

The IASB framework merely exists to assist in the development of future international accounting standards and to assist in areas that do not have guidance in an existing standard.

33
Q

What are the two chapters called that the IASB did jointly with the FASB

A

SFAC 8, chapters 1 & 3

34
Q

What ASC topic # discusses Accounting Changes & Error Correction?

A

250

35
Q

T/F

IFRS does not allow extraordinary gains/losses

A

TRUE

36
Q

In regards to a recognized subsequent event, when are gains and losses recognized?

A

Gains are not recognized until realized. A loss should immediately be recorded in the current year financial statements

37
Q

Define the principal market for establishing the fair value of an asset

A

This will be the market that has the greatest volume and level of activity for the asset

38
Q

What qualifications are there to be a market participant in determining fair value

A

Market participants are buyers and sellers in the principal market or most advantageous market for the asset or liability. Market participants should be independent, knowledgeable, able to transact for the asset, and willing to transact. They should be motivated but not compelled to transact.

39
Q

What is an assumption used in fair value measurements

A

The asset is in its highest and best use. A fair value measurement assumes the highest and best use of the asset that is physically possible, legally permissible, and financially feasible.

40
Q

Valuation techniques for fair value that include the Black Scholes Merton formula, a binomial model, or discounted cash flows are examples of what valuation technique

A

The income approach

41
Q

A company wishing to disclose information about the effect of changing prices should report this information where

A

In the supplementary information to the financial statements

42
Q

When valuing nonmonetary items, what are the two exceptions that use the recoverable amount if it is lower than the current cost

A

Property plant and equipment & inventory

43
Q

How is the CURRENT cost of goods sold computed

A

By multiplying the average cost of units produced or purchased during the year times the number of units sold

44
Q

T/F

Quarterly financial information is audited

A

FALSE

It is reviewed but not audited

45
Q

Identify the balance sheet requirements under form 10 Q

A

The SEC requires that a form 10 Q contain:

1) interim balance sheet as of the end of the most recent fiscal quarter.
2) a balance sheet as of the end of the preceding fiscal year.
3) An interim balance sheet for the fiscal quarter of the preceding year is required for understanding the impact of seasonal fluctuations. If the industry has no seasonal fluctuations this last requirement is not necessary.

46
Q

What is the basis of accounting on the financial statements of a trust

A

Accrual

47
Q

What is the measurement method of assets on the financial statements of a trust

A

Fair value

48
Q

What are the minimum required disclosures on the income statement under IFRS (8)

A

Income, finance costs, share of profits and losses using the equity method, tax expense, discontinued operations, profit or loss, noncontrolling interest in profit and losses, and the net profit or loss attributable to equity holders of the parent

49
Q

Under IFRS where can finance costs be presented in the statement of cash flows

A

Either the operating or financing section of the statement of cash flows

50
Q

IFRS requires that significant non-cash transactions be reported where? How is this different from US GAAP?

A

In the notes to the financial statement

For US GAAP if there are only a few significant non-cash transactions then they can be reported at the bottom of the statement of Cash flows or in a separate schedule in the notes to the financial statements

51
Q

IFRS requires cash advances and loans from bank overdrafts to be classified how on the statement of cash flows

A

Operating activities

52
Q

If newly acquired assets are depreciated using a different method than previously recorded assets use, what kind of change is that

A

This is not an accounting change

53
Q

How do you treat write down of inventory due to obsolescence

A

This is part of net income before extraordinary items

54
Q

Changing from the gross profit method for determining ending inventory balances to dollar value LIFO is what kind of change

A

This is a correction of an error

55
Q

The excess of cash paid over the carrying value to extinguish bonds is dealt with how

A

This is part of net income before extraordinary items

56
Q

What ASC Topic # covers extraordinary items

A

225

57
Q

An increase in the unrealized excess of cost over market value of marketable equity securities classified as trading type securities is part of what financial statement category

A

This is income from continuing operations and must have a separate disclosure

58
Q

The accumulated amount of the unrealized excess of cost over market value of available-for-sale marketable equity securities is part of what financial statement category

A

This is a separate component of stockholders equity

59
Q

A gain on remeasuring a foreign subsidiaries financial statements from the local currency into the functional currency is part of what financial statement category

A

This is income from continuing operations and must have a separate disclosure

60
Q

A loss on translating a foreign subsidiaries financial statements from the functional local currency into the reporting currency during this period is part of what financial statement category

A

This is part of other comprehensive income for that period

61
Q

If you are given two numbers that are within the same level (1,2,3) which number do you choose

A

The larger one

FAR Personal Flashcards (34 decks)

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