Study Unit One

The FASB's ________ (____) is a single source of ______.

Accounting Standards Codification (ASC); U.S. GAAP

Management accounting information assists management _________, _______, and _____. It is primarily for ______ use. It need not follow ______, but is often derived from _______ records.

decision making; planning; control; internal; GAAP; financial accounting

The staff analyzes the information obtained in the ______. The FASB then _____ the proposals with ______ at a public meeting(s).

preceding steps; redeliberates; stakeholder input

GAAP includes pronouncements issued by the bodies designated by the _______ to establish accounting and reporting principles. The following bodies have been designated: a). _____________ (______) b). _____________ (______) c). _____________ (______) d). _____________ (______)

AICPA; a). Financial Accounting Standards Board (FASB); International Accounting Standards Board (IASB); Governmental Accounting Standards Board (GASB); Federal Accounting Standards Advisory Board (FASAB)

EITF: Many consensus positions of the EITF have been included in _______ (_____).

Accounting Standards Updates (ASUs)

(IASB) ________ of IFRS as developed by the IFRS Interpretations Committee.

Approving interpretations

In some projects, a ______ also may be issued at an early stage to seek ______ during the _____ of drafting the proposal.

Discussion Paper; input; process

The _______ (EITF) addresses _____ and _______ ______ issues that require ______ to avoid differences in accounting treatments.

Emerging Issues Task Force; new; unusual; accounting; prompt action

A public meeting regarding the _____ may be held if needed.

Exposure Draft

An ______ is published to _____ broad stakeholder responses before ______ on the _____ draft proposal.

Exposure Draft; solicit; voting; final

The SEC delegated this authority to the ______.

FASB

The ______ follows a _____ procedure before issuing financial pronouncements. This procedure includes ______ of whether the ______ of change exceed its ______.

FASB; due process; consideration; benefits; costs

The ______ votes on a final draft proposal. IF a majority of the ______ board members approves, an ______ is issued to amend the _______ (ASC).

FASB; seven; ASU; Accounting Standards Codification

The _____ (_____) is an independent body established by the accounting profession in 1972.

Financial Accounting Foundation (FAF)

The _________ (FASAC) advises the _______ on _____ proposed standards and evaluates its ______.

Financial Accounting Standards Advisory Council; FASB; priorities; performance

GASB Statements have the status of _____ for _____ and _____ governments.

GAAP; state; local

For general-purpose financial statements to be useful to external parties, they must be prepared in accordance with _______ (____) in the U.S.

Generally Accepted Accounting Principles (GAAP)

The _______ (_____) was founded in 2001. It is an independent group of experts that are responsible for..... (1) The _______ and ______ of ________, including the IFRS for Small and Medium-sized Enterprise (SMEs).

International Accounting Standards Board (IASB); development publication; International Financial Reporting Standards (IFRS)

________ of financial information are current or potential investors and creditors who cannot obtain it directly. _______ and _____ are not ______ users.

Primary Users; Management; regulators; primary

The _________ (PCC), proposes ____ to and ______ of U.S. GAAP for _____ and.... Advises the _____ on ______ company issues before new _______ are issued.

Private Company Council; exceptions; modifications; private; FASB; private; pronouncements

When an ASU has been incorporated into the FASB's ASC, it has the status of _______.

U.S. GAAP

The FASB updates _______ by issuing _______.

U.S. GAAP; Accounting Standards Updates (ASUs)

Does financial accounting differ from management accounting?

Yes

The decision to add a project to the technical agenda is based on an ______ by the ______.

analysis; FASB's staff

But SFACs are not _______ and are not included in the _______. Instead, they are intended to guide the _______ and ______ of ______.

authoritative; ASC; development; application; U.S. GAAP

Financial Statements are the primary method of _______ to ______ parties information about the results of ______, _____ position, and ______.

communicating; external; operations; financial; cash flows

Financial reporting issues are identified based on _____ with _______ (ex. _____, ____, ______, ______, and ______), _____, and other ______.

communications; stakeholders; investors; creditors, businesses, academics; accountants; research; activities

Primary users' decisions depend on the _______. Accordingly, primary users need information that helps them assess the ______, _____, and ______ of the entity's _______.

expected return; amount; timing; uncertainty; future net cash inflows

The FASAB establishes accounting principles for the _____ and issues Statements of _______ Accounting Standards.

federal government; Federal Financial

The Financial Accounting Standards Board (FASB) established ______ and ______ (U.S. _____) for _____ and ______ companies and _____ organizations.

financial accounting; reporting standards; GAAP; public; private; not-for-profit

The objective of general-purpose of financial reporting is to provide _____ about the reporting _____ that is ______ to existing and _____ investors and creditors in making decisions about providing ______ to the entity.

financial information; entity; useful; potential; resources

The SEC has the legal authority to establish ______ for ______ (referred to as _____) in the United States. Issuers are firm that issue ____ and _____.

financial reporting requirements; publicly traded companies; issuers; stocks; bonds

Nature of Financial Accounting: Financial Accounting produces ______ about an entity's ______, _______, ______, _______, and ______ of ______.

information; assets; liabilities; revenues; expenses; other elements; financial statements

The FASB's conceptual framework is a set of ________ objectives, _______ characteristics, elements, and other _______ concepts. It is described in the __________.

interrelated; qualitative; fundamental; Statements of Financial Accounting Concepts (SFACs)

This approach allows investors to evaluate ______ for _____ using standardized reports filed with the ______.

investments; themselves; SEC

(GASB) The GASB and its predecessor were established because of the differences, especially the unique informational _____ that must be met by ______ and ______.

needs; governmental accounting standards; reports

The FAF ______ the following bodies involved in the establishment of the U.S. GAAP for ______ entities: (1) The ________ (2) The _______ (3) The _______ (4) The ______

oversees; nongovernmental; (1) Financial Accounting Standards Board (FASB); (2) Financial Accounting Standards Advisory Council (FASAC); (3) Private Company Council (PCC); (4) Emerging Issues Task Force (EITF)

The SEC enforces those principles those principles by ensuring that issuers meet certain _______ for the ______ of the ______ and other information.

periodic reporting requirements; disclosure; financial

The GASB is a _____, _____, ______ organization established by the FAF as the primary _____ setter for state and local governmental entities. (The GASB does not establish _____ for the federal government).

private; not-for-profit; nongovernmental; standard setter; GAAP

FASB: Deliberation of the issues occurs at a ________ ( ).

public meeting(s)

Financial reporting may help the primary users to estimate the ______ of the reporting entity. But it does not ______ show the ______ of the entity.

value; directly; value