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
