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14 Cards in this Set
- Front
- Back
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Basic Accounting Theory
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FASB Accounting Standards Codificationis (ASC)the single source of GAAP for nongovernmental entities
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ASUs
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ASUs is used to update the codification
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Objective of financial reporting
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primairy users are: investors, lenders and creditors who must rely on reporting entities to provide information. Manager and regulators are not accorfing to SFAC8
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Objective of financial reporting
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Inormation is useful to primary users, information about reporting entities' ecnomic resources and claims against the entity,changes in economic resources and claims. Financial performance reflected by accural accoutning abd past cash flow,changes in ecnomic resources and claims not resulting from financial performance
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SFAC Statements of Financial Accounting Concepts
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establish a framework from which financial accounting and reporting standards could be developed. The SFAC provide the theory behind accounting and reporting and provide guidance when no GAAP exists. The SFAC are not included as GAAP.
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SFAC 8 Fundamental Qualitative Characteristics
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Relevance: Predictive Value & Confirmatory Value, Faithful Representation: complete, neutral. Free from error
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SFAC 8 Ehancingl Qualitative Characteristics
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Comparability(consisitency helps achieve that ,verifiability, timliness, unferstabndability
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SFAC 8 Threshold for recognition
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materiality
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SFAC: Asset 1117
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(1) obtain it or control it today, (2) it will provide benefits in the future,and (3) it occurred as a result of a past transaction.
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Liability
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(1) owe it as of today, (2) you will sacrifice something in the future,and (3) it occurred as a result of a past transaction.
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Comprehensive income
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two definitions, under SFAC5, investment by owners and distribution to owners are excluded
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Economic Entity Assumption:
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Economic activity can be identified with a particular unit of accountability
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Basic Principles of Accounting:
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Historical Cost Principle:Revenue Recognition Principle:Matching Principle:Full Disclosure Principle:
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Constraints
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Cost-Benefit Relationship:Materiality:Conservatism
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