AC 300 Chp 1 Smartbook Questions

To enhance timeliness, the SEC requires its registrants to submit financial information how frequently?

1-Annually 2-Quarterly

The four basic accounting assumptions....

1-Id the entity being reported on 2-ID the frequency of reporting 3-ID the denomination in which reporting occurs 4-Assume entity will continue to exist

A liability has which of the following characteristics?

1-It is due to a past transaction or event 2-It is a present obligation 3-It is a probable future sacrifice of an economic benefit

The application of conservatism leads to:

1-Losses recognized quicker than gains 2-Assets tending to be biased downwards

Which of the following are acceptable measurement attributes for certain financial statement items?

1-Net realizable value 2-Historical cost 3-present value 4-fair value

The four basic accounting assumptions are?

1-assume the entity will continue to exist 2-identify the frequency of reporting 3-identify the denomination in which reporting occurs 4-identify the entity being reported on

The concept of understandability assumes that the users of financial statements should have?

A reasonable understanding of business and economic activities.

An essential assumption underlying GAAP is that all economic events can be identified with what?

An economic entity

Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events are referred to as?

Assets

What element of the financial statements is described by the following definition? "Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions."

Assets

If the same accounting principles and methods are used for similar events by two different firms, this enhances what accounting qualitative characteristic?

Comparability

The change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources is called?

Comprehensive Income

______________ include(s) all changes in equity during a period except those resulting from investments by owners and distributions to owners.

Comprehensive income

Before they can be recognized, favorable items tend to require more verification than unfavorable items. Accountants refer to this as?

Conservatism

Decreases in equity of a particular enterprise resulting from transfers to owners are called________________ to owners?

Distributions

Decreases in equity of a particular enterprise resulting from transfers to owners is called

Distributions to owners

For information to be cost effective, the perceived benefit of increased decision usefulness must

Exceed the anticipated costs of providing that information.

Outflows or other using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations are referred to as?

Expenses

Increases in equity from peripheral or incidental transactions of an entity are called

Gains

What are the costs of providing financial information?

Gathering, processing, and disseminating information

Assuming that a business will operate indefinitely is referred to as the______________ ______________ assumption.

Going concern

A transfer of something of value to obtain or increase ownerships interests in a business is called

Investments by owners

Increases in equity of a particular business enterprise resulting from transfers to it from other entities or individuals of something of value to obtain or increase ownership interests in it are called?

Investments by owners

Another term for equity is?

Net Assets

Inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations are referred to as

Revenues

What does it mean if information is cost effective?

The benefits of providing financial information outweigh the costs of doing so.

The SEC requires companies to file quarterly reports to provide information to investors. This is an example of the concept of?

Timeliness

The accounting characteristic that requires a user to comprehend the information within the context of the decision being made is referred to as?

Understandibility

When the cost of an item can be traced to objective evidence of a transaction, such as a sales receipt, canceled check, and bank statement, the information has the quality of?

Verifiability

Accounting information meets the qualitative characteristic of consistency if it is measured and reported the same way...

across different reporting periods

Recognition refers to the process of

copying information into basic financial statements

The requirement that the economic activities of a business owner should be separated from the activities of the business is an example of which accounting assumption?

economic entity

Outflows or other using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations are referred to as?

expenses

An increase in equity from peripheral or incidental transactions of an entity is referred to as a(n)

gain

The going concern assumption is critical to the measurement of assets because if a business were going to cease operations, its assets would be measured at their...

liquidation values

A decrease in equity from peripheral or incidental transactions of an entity is referred to as a(n)

loss

Decreases in equity from peripheral or incidental transactions of an entity are called

losses

The process of associating numerical amounts to the elements in the financial statements is called?

measurement

The process of associating numerical amounts to the elements of the financial statements is referred to as

measurement

What type of measurement model does U.S. GAAP currently employ?

mixed attribute

Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from what type of sources?

nonowner

Which assumption allows the life of the company to be divided into artificial time periods to provide timely information?

periodicity

Allowing the life of a company to be divided into artificial time periods in order to provide timely information is referred to as the

periodicity assumption

True or false: A weakness of the monetary unit assumption is that the dollar is presumed to be stable over time and no adjustment is made for inflation.

true