far sec 1 all multiple choice
consistency
use of the same method among periods or among entities, and helps achieve comparability, which is an enhancing qualitative characteristic
predictive value
used to predict future outcomes
periodicity assumption
Economic activity can be divided into meaningful time periods
each of the following is correct regarding the financial accounting standards board except
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which of the following assumptions means that money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis
monetary unit
relevance
must have predictive and/or confirming value
on dec 31 brooks co disposed of assets and ended operations... net realizable value of equipment was below historical cost. what is the appropriate measure basis?
net realizable value
according to fasb conceptual framework, what does the concept of faithful representation include?
neutrality
according to fasb conceptual framework, predictive value is relevant? faithful representation?
Yes, No
is a component of faithful representation
neutrality
according to fasb conceptual framework an entity's revenue may result from
a decrease in liability from primary operations
the statements of financial accounting concept are
not GAAP
Changes to existing authoritative GAAP for nonissuer, nongovernmental entities are communicated by financial accounting standards board through the issuance of
accounting standards updates
The FASB amends the Accounting Standards Codification through the issuance of
accounting standards updates
accrual accounting involves accruals and deferrals. Which of the following best describes accruals and deferrals?
accruals are concerned with expected future cash receipts & payments while deferrals are concerned with past cash receipts and payments
after codification was created
all updates are made through the issuance of accounting standards updates
which of the following statements best describes an operating procedure for issuing FASB accounting standards update
an accounting standards update is issued only after a majority vote by the members of the FASB
according to fasb conceptual framework, which of the following is an essential characteristic of an asset
an asset provides future benefits
going concern assumption
an entity will continue to operate in the foreseeable future
when a cpa is applying the enhancing qualitative characteristics of useful financial info, it is important for the cpa to remember that
applying the enhancing qualitative characteristics is an iterative process that does not follow a prescribed order
interim financial reporting should be viewed primarily in which of the following ways
as reporting for an integral part of an annual period
allocation
assigning or distributing an amount according to a plan or formula
how are amendments incorporated into the fasb accounting standards codification
by releasing an accounting standards update
matching
combined recognition of revenues and expenses that result directly and jointly from the same transaction or other events
which of the following is true regarding the comparison of managerial to financial accounting
managerial accounting need not follow gaap while financial acct must follow them
is a component of relevance (both answers)
materiality, predictive value
exposure draft
document used during the due process system and presents the proposed accounting standard to the public for review
economic entity assumption
economic activity can be accounted for when considering an identifiable set of activities
according to fasb conceptual framework, neutrality is an ingredient of
faithful representation
which of the following characteristics mean that info is reasonably free from error and bias?
faithful representation
according to fasb conceptual framework, useful information must exhibit the fundamental qualitative characteristics of
faithful representation and relevance
a us public company needs guidance in accounting for and reporting a complex derivative transaction that it entered into with a European subsidiary. This company is most likely to find the appropriate guidance in the
fasb accounting standards codification
which of the following is the most authoritative source of US GAAP
fasb accounting standards codification
prior to codifications
fasb issued new accounting pronouncements through statements of financial accounting standards
the exposure draft allows for...
feedback from interested user groups and is used in the creation of the accounting standards update
representational faithfulness
financial info faithfully represents the economic phenomena
neutrality
financial info is free from bias
concept standards are not
gaap
under a royalty agreement with another company, Wand Co. will pay royalties for the assignment of a patent for three years. The royalties paid should be reported as expense:
in the period incurred
the fasb statements of financial accounting standards are
included in the account standards codification
primary users of financial reports
investors, lenders, creditors
other factors
liquidity issues and market imperfections
completeness is an ingredient of
not relevance yes faithful representation
statements of financial accounting standards
old terminology
According to fasb, to be relevant, information should have
predictive value
according to fasb conceptual framework, the quality of information that helps users forecast future outcomes is
predictive value
exposure draft
preliminary drafts of a proposed standard that FASB uses during the due process system of standard setting.
realization
process of converting noncash resources and rights into money
concept statements
provide the framework and basis upon which accounting standards are written
confirming value
provides feedback about evaluations previously made by users
according to fasb conceptual framework, the process of reporting an item in the financial statements of an entity is
recognition
according to fasb conceptual framework, the primary users of financial reports include all of the following except
regulators
users of financial statements frequently rely upon the data displayed in the financial statements to predict future financial outcomes. financial accounting concepts refer to the characteristic of accounting information that provides predictive value to users as the quality of:
relevance
according to fasb conceptual framework, which of the following correctly pairs a fundamental qualitative characteristic of useful info with one of its components
relevance and materiality
according to fasb conceptual framework, certain assets are reported in financial statements at the amount of cash or its equivalent that would have to be paid if the same or equivalent assets were acquired currently. What is the name of the reporting concept?
replacement cost
The primary purpose of a not-for-profit organization's statement of activities is to provide relevant information to its
resource providers
time value of money
risk-free rate of interest
finance information provided in general purpose financial reports does not include info about
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SFAC (Statements of Financial Accounting Concepts) that requires a statement of comprehensive income is
sfac 5, dealing with recognition and measurement
fasb issues discussion papers to
solicit feedback on particular accounting and reporting issues
net realizable value
sp- disposal costs
the objectives of financial reporting stem from which of the following sources?
the needs of the external users of the info
cost constraint
the perceived benefits to be denied that exceeds the perceived costs associated with it
5 elements of present value measurement used to establish value of assets or liabilities
the price for bearing uncertainty, expectations about timing variations of future cash flows, other factors, time value of money, estimate of future cash flow
current market value
the price to sell (not acquire) an asset
conceptually, interim financial statements can be described as emphasizing which of the following enhancing qualitative characteristics?
timeliness
which of the following enhances relevance and faithful representation
timeliness
the primary objective of financial reporting is
to provide information that is useful for economic decision making
which of the following define equity as it relates to a business entity
total assets less total liabilities
materiality and relevance are both defined by
what influences or makes a difference to a decision maker
