Chapter 1

Front 1

Accounting Principles Board (APB)

Back 1

Mission was to develop an overall conceptual framework. Official pronouncements called APB Opinions, were to be based mainly on research studies and be supported by reasons and analysis. APB issued 31 opinions in its lifetime.

Front 2

Accounting Research bulletins

Back 2

51 bulletins from committee on account procedure issued to deal w/acctg problems as they arose. AICPA created acctg principles board to provide a structures body of accounting principles.

Front 3

Acctg Standards Update

Back 3

products of Standard setting(FASB Stand, Staff positions, EIFT consensus) included in the FASB codification. Updates also issued for amendments to SEC content in codification

Front 4

Accruel-Basis Acctg

Back 4

Comp records events that change its financial staements in periods in which events occure, rather then only in periods which pays or receives cash. Thus comp recognizes rev when it satisfies perf obligation rather then when it receives cash

Front 5

American Institute of Certified Public Accountant (AICPA)

Back 5

National professional org of practicing CPAs Whose various committees and boards have been important contributors to develop GAAP

Front 6

APB Opinions

Back 6

Official pronouncements of acctg principles board, intended to be based mainly on research studies and be supported by reasons and analysis.

Front 7

Auditing Standards Board

Back 7

Arm of AICPA responisible for developing auditing standards. The public company accounting oversight board, established by the Sarbanes- oxley Act, not oversees development of auditing standards.

Front 8

Committee on acctg procedures (CAP)

Back 8

established by AICPA in 12939 at urging of the SEC to deal w/acctg problems. CAP issued 51 acctg research bulletins, replaced by acctg principles board(APB)

Front 9

Decision-usefulness

Back 9

approach that requires financial reporting to be useful to investors by helping them assess 1)comps ability to generate net cash fliws and 2) managements ability to protect and enhance the cap providers investments

Front 10

Emerging Issues Task-Force

Back 10

Group created in 1984 by the FASB to reach consensus on how to account for new/unusual financial transactions that might create different financial reporting practices. The FASB reviews and approves all EITF consensuses and SEC views consensus solutions as preferred acctg

Front 11

Entity Perspective

Back 11

View that companies are distinct and separate from their owners(Present Shareholders)

Front 12

Expectations Gap

Back 12

difference between what public thinks accountants should do and what accountants think they can do.

Front 13

FASB Staff Positions

Back 13

Issued by FASB, provide interpretive guidance and also minor amendments to standards and interpretations

Front 14

Financial Acctg

Back 14

Acctg process that culminates in the prep of financial reports for use by both internal/ext parties

Front 15

Financial Acctg Standards Board (FASB)

Back 15

Major org of standard-setting structure for financial acctg. mission is to establish and improve standards of financial acctg/reporting for guidance and education of public. Consist of 7 members, 5 yr term, acctg guidance issued by FASB generally accepted by GAAP

Front 16

Financial Acctg standards Codification (Codification)

Back 16

Developed by FASB, provides a one place for all authoritative literature related to a particular topic.

Front 17

FASP Codification research System

Back 17

Online, real time database that provides easy access to codification, through a topically org structure, subdivided into topics, subtopics, sections, paragraph using index system

Front 18

Financial Reporting

Back 18

Reporting of financial info other than in formal finance statements. Ex presidents letter or supplementary schedules in the corporate annual report, prospectuses, news releases

Front 19

Financial Statements

Back 19

Principal means through which comp communicates its financial info. Statements reflect the collection, tabulation, and final summarization of acctg data. Statements most frequently provided are 1) balance shee 2) Income Statement 3)Statement of Cash Flows 4)Statement of owners/ stockholders equity. Note disclosures are integral part of comps financial statements

Front 20

Generally Accepted Acctg Principles (GAAP)

Back 20

Common set of Acctg Standards/ Procedures for which either an authoritative acctg rule making body established principle of reporting in a given area, or over time, given practice has been accepted as appropriate because universal application

Front 21

General Purpose Financial Statements

Back 21

Means of providing Financial reporting info to a wide variety of users at the least cost for investors and creditors

Front 22

International Acctg Standards Board (IASB)

Back 22

Org based in London, Sets Acctg Standards accepted for international use. Although many standards similar to GAAP, FASB, IASB are currently working on a convergence project to result in 1 set of high quality standards

Front 23

International Financial Reporting Standards (IFRS)

Back 23

All acctg rules accepted for international use, issued by the IASB

Front 24

Interpretations

Back 24

Statements issued by the FASB that modify or extend existing Standards. Interpretations have the same authority as standards for purposes of determining GAAP

Front 25

Object of Financial Reporting

Back 25

Goal for financial acctg/ reporting, established by the acctg profession, which is to provide info about the reporting entity that is useful to present/ potential to equity investors, lenders, other creditors in decisions about providing resources to the entity.

Front 26

Public Comp Acctg Oversight Board (PCAOB)

Back 26

Org established by the Sarbanes-Oxley Act that has oversight and enforcement authority for acctg practices and that established auditing, quality control, and independence standards rules.

Front 27

Sarbanes- Oxley Act

Back 27

Legislation, enacted by the US congress, intended to combat acctg fraud, curb poor reporting practices and make sweep changes to the institution structure of acctg profession.

Front 28

Securities Exchange Commission (SEC)

Back 28

Fed agency established to help develp and standardize the finacial info present to stockholders. Adminstrates securities exchange act 1935 and several other acts. Most companies that issue securities to the public are required to file audited financial statements with the SEC. The SEC also has broad powers and standards to be employed by all comps w/in jurisdiction

Front 29

Statements of Financial Acctg Concepts

Back 29

Series of Statements by the FASB set forth fundamental objectives and concepts that the board uses in developing future standards of financial acctg and reporting. Statements of concepts don't establish GAAP. However these cohesive set of interrelated concepts is intended to be a conceptual framework that will serve as tools for solving existing and emerging problems.

Front 30

Wheat Committee

Back 30

Study group on establishment of acctg principles