Framework, Overview, & Statements

Question 1

“Negative economic consequences” related to arguing against a proposed new standard

Answer 1

Inability to raise capital

Question 2

Primary qualitative characteristic-Faithful representation

Answer 2

Completeness
Neutrality
Free from error

Question 3

Primary qualitative characteristic-Relevance

Answer 3

Predictive value
Confirmatory value
Materiality

Question 4

Enhancing qualitative characteristics

Answer 4

Comparability
Verifiability
Timeliness
Understandability

Question 5

Reporting net income on a fair value investment

Answer 5

Share of dividends + increase in fair value of the investment = net income

Question 6

Valuation methods allowed for investments held-to-maturity

Answer 6

Amortized cost-traditional method

Fair value-can be elected

Question 7

Foreign private issuer

Answer 7

-More than 50% of voting stock is owned by US residents
and one of the following:
-More than 50% of the assets are located in the US
-The business is primarily administered in the US
-The majority of the executives or directors are US citizens or residents

Question 8

What is not a required disclosure requirement of the 10-K?

Answer 8

Product market share

Question 9

Regulation S-X

Answer 9

Financial statement disclosures

Question 10

Regulation S-K

Answer 10

Non-financial statement disclosures

Question 11

Filing deadlines for 10-K

Answer 11

Large accelerated filer-60 days
Accelerated filer-75 days
Non-accelerated filer-90 days

Question 12

Filing deadlines for 10-Q

Answer 12

Large accelerated filer-40 days
Accelerated filer-40 days
Non-accelerated filer-45 days

Question 13

Finished goods manufactured formula

Answer 13

Finished good manufactured + Beginning Inventory - Ending Inventory = Cost of Goods Sold

Question 14

Costing method to maximize profits when in a period of rising prices

Answer 14

FIFO

Question 15

Inventory costing method that approximates most closely the current cost of COGS & ending inventory

Answer 15

COGS-LIFO

Ending Inventory-FIFO

Question 16

Ending inventory and COGS have the same value for periodic and perpetual inventory systems under which costing method?

Answer 16

FIFO

Question 17

Ending dollar value LIFO

Answer 17

= Beginning CY DV LIFO + (CY increase in base dollars x price level index for CY)
Price level index = total EOY cost/total base year cost

Question 18

LOCOM

Answer 18

Record inventory at the lower of the original cost or market value (replacement cost) within the range of the ceiling and floor
Ceiling-net realizable value
Floor-net realizable value-normal profit margin

Question 19

Cost to retail ratio under FIFO

Answer 19

Cost purchases/(Retail purchases + net additional markups - net markdowns)

Question 20

Cost to retail ratio under FIFO LCM

Answer 20

Cost purchases/(Retail purchases + net additional markups)