Standard-Setting, Conceptual Framework, Financial Reporting

Question 1

What are the fundamental qualitative characteristics of useful information and what are their components?

Answer 1

1) Relevance
Predict and
Confirm your
Material Value once you pass!

2) Faithful representation/reliable
Completely neutral is free from error

Question 2

What is an accelerated filer and when must they file their 10-K and 10-Q?

Answer 2

Accelerated filers have 75 days after the fiscal year-end to file their annual report (10-K) and 40 days after the fiscal quarter ends to file their quarterly report (10-Q).

Question 3

What is a non-accelerated filer and when must they file their 10-K and 10-Q?

Answer 3

Any company with a market capitalization less than $75 million.

45 days for the 10-Q

Question 4

What is a large accelerated filer and when must they file their 10-K and 10-Q?

Answer 4

Any company with market capitalization of $700 million or more.

60 days is the deadline for large accelerated filers for the 10-K report.

Question 5

Under Regulation S-X, an entity’s annual financial statements filed with the SEC should include at leaset three of each of the following, except the:

Answer 5

Balance Sheet.

Under Regulation S-X, an entity’s audited financial statements filed with the SEC should include balance sheets for the two most recent fiscal years and the statements of income, changes in owners’ equity, and cash flows for the three fiscal years preceding the date of the most recent audited balance sheet.

Question 6

How should the purchase of a three-month U.S. Treasury bill, which is treated as cash equivalent by the Company, be reported in Kong Co.’s statement of cash flow?

Answer 6

The U.S. Treasury bill is considered to be a cash equivalent item so purchasing the T-bill merely changes the form of cash held, it does not change the cash position of the entity. Thus, the purchase is not reported on the statement of cash flows.