Acc 301 Exam 1

Front 1

Essentialcharacteristicsof accounting are:

Back 1

(1)the identification, measurement, and communication of financial information about

(2)economic entities to

3. interested parties.

Front 2

Objectives of Financial Reporting

Back 2

Provide financial information aboutthe reporting entity that is useful to

1.presentand potential equity investors,

2.lenders,and

3.othercreditors

in making decisions in theircapacity as capital providers.

Front 3

General-Purpose FinancialStatements

Back 3

1. Providefinancial reporting information to a wide variety of users.

2. Providethe most useful information possible at the least cost.

Front 4

Equity Investors and Creditors

Back 4

Investorsare the primary user group.

Front 5

Entity Perspective

Back 5

Companiesviewed as separate and distinct from their owners.

Front 6

Decision-Usefulness

Back 6

Investors are interested inassessing the company’s

1.ability to generate net cash inflows and

2.management’s ability to protect andenhance the capital providers’ investments.

Front 7

PARTIES INVOLVED INSTANDARD SETTING

Back 7

Threeorganizations:

1.Securitiesand Exchange Commission (SEC).

2.AmericanInstitute of Certified Public Accountants (AICPA).

3FinancialAccounting Standards Board (FASB).

Front 8

GENERALLY ACCEPTEDACCOUNTING PRINCIPLES

Back 8

Principles that have substantial authoritative support.

Front 9

Major sources of GAAP

Back 9

1. FASBStandards, Interpretations, and Staff Positions.

2. APBOpinions.

3. AICPA Accounting Research Bulletins.

Front 10

FASB Codification

Back 10

1. Goalin developing the Codification is to provide in one place all the authoritativeliterature related to a particular topic.

2.Createsone level of GAAP, which is considered authoritative.

3.Allother accounting literature is considered non-authoritative.

Front 11

International AccountingStandards

Back 11

Two sets of standards accepted forinternational use:

1.U.S.GAAP, issued by the FASB.

2. InternationalFinancial Reporting Standards (IFRS), issued by the IASB.

Front 12

InternationalAccounting Standards Board (IASB)

Back 12

IssuesInternationalFinancial Reporting Standards (IFRS).

Standardsused on most foreign exchanges.

Standardsused by foreign companies listing on U.S. securities exchanges.

IFRSused in over 115 countries.