M4

Question 1

What is included in the summary of significant accounting policies and procedures

Answer 1

-Measurement bases used in preparing the financial statements
-Accounting principles and methods used during the period
Basis of consolidation,
Depreciation methods,
amortization,
Special revenue recognition (long-term construction contracts,
franchising, leasing operations)

Question 2

What is the purpose of information presented in notes to the financial statements?

Answer 2

To provide disclosures required by generally accepted accounting principles

Question 3

The criteria for determining which investments are treated as cash equivalents is part of the

Answer 3

Summary of significant accounting policies

Question 4

What is in the remaining notes to the financial statements

Answer 4

All other information relevant to decision makers

Changes in stockholders’ equity
FV estimates
Changes in accounting principle/policy
Pension plan description
Unrealized gains/losses

Question 5

What is included in disclose of risk and uncertainties?

Answer 5

-entities major product or services and it’s principal markets
-use of estimates in preparation of financial statements
-Certain significant estimates (if material)
-vulnerability due to concentrations

Question 6

What is disclosed in the vulnerability due to concentrations section of the risks and uncertainties

Answer 6

-the concentration exists at the financial statement
-The concentration makes the entity vulnerable to the risk of a near-term severe impact
-It is at least reasonably possible that the events that could cause the severe impact will occur in the near term

Question 7

What are some examples of concentration risks

Answer 7

Concentration in market or geographic area
Concentration in supply of resource
concentrations in volume of business

Question 8

When should vulnerability due to concentrations be disclosed?

Answer 8

1. The concentration exists at the financial statement date
2. The concentration makes the entity vulnerable to the risk of a near term sever impact
3. It is at least reasonably possible that the events that could cause the impact will occur near term

Question 9

What is the three tier value hierarchy for determining FV

Answer 9

1. Quoted price
2. Observable inputs
3. Unobservable inputs