Intermediate Accounting Ch. 1

Front 1

The financial statements most frequently provided are

Back 1

the balance sheet

the income statment

the statement of cash flows

the statement of stockholders equity

Front 2

financial information provided by means other than formal financial statements

Back 2

prospectuses
news releases
managements forecasts
president's letters

Front 3

Capital Allocation is

Back 3

the process of determining how and at what ost money is allocated among competing interests

Front 4

Problems with financial reporting today:

Back 4

Falied to provide key performane measures widely used by management such as customer satisfaction indexes

Failed to provide forward looking information.

Failure to disclose soft assets such as brand image and well trained employees.

No real time information

Front 5

Positive signs of improvements of financial reporting

Back 5

voluntary disclosures of information deemed relevant

Information available on world wide web

More fair value reporting

Front 6

Financial reporting should provide information that is

Back 6

useful to present and potential investors

Helps users asses the timing of cash flows

Clearly portrays the economic resources of of an enterprise and the claims to those resources

Front 7

The common set of standards and procedures is generally called:

Back 7

GAAP (Generally Accepted Acoounting Principles)

Front 8

Organizations instrumental in development of financial accounting standards:

Back 8

Securities and Exchange Commision

American Institute of Certified Public Accountants

Financial Accounting Standards Board

Governmental Accounting Standards Board

Front 9

The SEC was established to

Back 9

help devolp and standardize financial information presented to stockholders

Front 10

The SEC is was created in

Back 10

1934

Front 11

SEC requires registrants to adhere to

Back 11

GAAP

Front 12

The SEC has relied on the ________ and the _________ to regulate the accounting profession and and develop and engorce accounting standards.

Back 12

AICPA and FASB

Front 13

Companies on the stock exchange are required to submit their financial statements to the

Back 13

SEC

Front 14

The AICPA appointed the _______in 1939 which created 51 accounting research bulletins between the years of 1939 and 1959.

Back 14

Committee on Accounting Procedure.

Front 15

In _________ the AICPA created the ______________ to be the structured body of accounting principles.

Back 15

1959; Accounting principles board

Front 16

The major principles of the Accounting Principles Board are to:

Back 16

1)advance the written expression of accounting principles

2)to determine appropriate practices

3)to narrow the areas of difference and inconsistency in practice

Front 17

The APB's mission was to:

Back 17

devellop an overall conceptual framework to assist in the resolution of problems as they become evident.

Front 18

The APB's board has ________ members

Back 18

18-21

Front 19

The APB board's official prononcements are called

Back 19

APB opinions.

Front 20

The APB was dissolved _____ based on the reccomendations of the _________.

Back 20

1973; Wheat committee

Front 21

The APB was dissolved because it was charged with

Back 21

lack of productivity

failing to act promptly to correct alleged accounting abuses

Front 22

The Wheat Committee was created in __________ to ___________.

Back 22

1971; to examine APB and determine what changes would be necessary to attain better results.

Front 23

The standards-setting structure is composed of three organizations, which were:

Back 23

The Financial accounting Foundation,

The Financial Accounting Standards Advisory Council

The Financial Accounting Foundation

Front 24

The FASB's mission is to

Back 24

establish and improve standards of financial accounting and reporting for the guidance and education of the public.

Front 25

The differences between the FASB and the APB are:

Back 25

Smaller Membership (7 members)

Full-time renumerated Membership appointed for renewable 5 year terms

Greater Autonomy (not a member of any single professional organization)

Incresed independence (may not hold other jobs)

Not required to be a CPA to be a member of FASB

Front 26

Two basic premises of FASB are

Back 26

1) The FASB should be responsive to the needs and viewpoints of the entire economic community

2) It should operate in full view of the public through a "due process" system that gives interested persons ample opportunity to make their views known

Front 27

Due process consists of

Back 27

Identifying topics

Research and analysis

Public hearing

Board evaluation and issues exposure draft

evaluate responses to exposure draft and make changes if necessary

Front 28

The passage of a new FASB Standards Statement requires the support of ( ) of the seven board memebers.

Back 28

four

Front 29

The major types of pronouncements that the FASB issues are:

Back 29

Standards and interpretations

Financial Accounting concepts

Technical bulletins

Emerging issues task force

Front 30

Standards and interpretations pronouncements from FASB are:

Back 30

generally accepted accounting principles and modifications or extensions of existing standards

Front 31

The FASB interpretations have the same authority as standards and require the same votes for passage, but (do/do not) require FASB to operate in full view of the public throught the due process system

Back 31

do not

Front 32

Since replacing the APB the FASB has issued __________ standards and __________ interpretations.

Back 32

147
44

Front 33

The purpose of FInancial Accounting Concepts is to

Back 33

set forth fundamental objectives and concepts that the board will use in develloping future standards of accounting and reporting

Front 34

A statement of financial accounting concepts (does/does not) establish GAAP

Back 34

does not

Front 35

Concepts statements (do/do not) pass the same due process system that standards staments do

Back 35

do

Front 36

FASB technical bulletins to:

Back 36

assist entities to apply or implement FASB Standards, and the technicall issues that arise in applying these standards

Front 37

A technical bulletin is issued only when it is

Back 37

NOT expected to cause a maor change in accounting practice for a number of interprises

When the cost of implementation is low

the guidance does not conflict with any broad fundamental accounting principle

Front 38

The Emerging Issues Task Force, which was created in________, was created to:

Back 38

1984; reach a concensus on how to account for new and unusual financial transactions

Front 39

Examples of issues of EITF

Back 39

how to account for pension plan terminations

how to account for revenue from barter transactions by internet companies

how to account for excessive amounts paid to takeover specialists

timely guidence for reporting losses relatedto 9/11

Front 40

The _________ becomes a "problem filter" for the
FASB.

Back 40

EITF (Emerging Issues Task Force)

Front 41

The advisory council of the GASB (governmental accounting standards board)

Back 41

Governmental Accounting Standards Advisory Council

Front 42

The Governmental Accounting Standards Board is oversen by

Back 42

Financial Accounting Foundation

Front 43

The AICPA originated by

Back 43

providing the leadership in the development of accounting principles and rules

Regulating the accounting profession and developing and enforcing accounting practice

Front 44

AcSEC is the

Back 44

Accounting Standards Executive Committee

Front 45

The AcSEC speaks for the AICPA through various written communications

Back 45

Audit and accounting guidelines

Statements of Postion

Practice Bulletins

Front 46

Audit and Accounting Guidelines of the AICPA

Back 46

summarize the accounting practices of specific industries and provide specific guidance on matters not addressed by the FASB

Front 47

Statements of Position of the AICPA

Back 47

provide guidance on financial reporting topics until the FASB sets standards on the issue in question

Front 48

Practice Bulletins of the AICPA

Back 48

indicate AcSEC's views on narrow financial reporting issues not considered by the FASB

Front 49

The ______________ act of 2002 requires the __________ to oversee the development of future auditing standards.

Back 49

Sarbanes-Oxley Act;
Public Compnay Accounting Oversight Board

Front 50

Generally Accepted Accounting Principles are those principles that have

Back 50

"substantial authoratative support"

Front 51

Rule 203 of the AICPA's code of Professional Conduct

Back 51

prohibits a member form expressing an opinion that financial statments conform with GAAP if they contain a material departure from GAAP unless the member can demonstrate that because of unusual circumstances the financial statements would have been misleading

Front 52

GAAP covered by rule 203 are construed to be

Back 52

FASB Standards and Interpretations, APB opinions, and AICPA Accounting Research Bulletins

Front 53

In _________ the AICPA created the ______________ to be the structured body of accounting principles.

Back 53

1959; Accounting principles board

Front 54

The major principles of the Accounting Principles Board are to:

Back 54

1)advance the written expression of accounting principles

2)to determine appropriate practices

3)to narrow the areas of difference and inconsistency in practice

Front 55

The APB's mission was to:

Back 55

devellop an overall conceptual framework to assist in the resolution of problems as they become evident.

Front 56

The APB's board has ________ members

Back 56

18-21

Front 57

The APB board's official prononcements are called

Back 57

APB opinions.

Front 58

The APB was dissolved _____ based on the reccomendations of the _________.

Back 58

1973; Wheat committee

Front 59

The APB was dissolved because it was charged with

Back 59

lack of productivity

failing to act promptly to correct alleged accounting abuses

Front 60

The Wheat Committee was created in __________ to ___________.

Back 60

1971; to examine APB and determine what changes would be necessary to attain better results.

Front 61

The standards-setting structure is composed of three organizations, which were:

Back 61

The Financial accounting Foundation,

The Financial Accounting Standards Advisory Council

The Financial Accounting Foundation

Front 62

The FASB's mission is to

Back 62

establish and improve standards of financial accounting and reporting for the guidance and education of the public.

Front 63

Most Authoratative GAAP categories

Back 63

FASB Standards and Interpretations

APB Opinions

AICPA accounting and research Bulletins

Front 64

GAAP(B) categories

Back 64

FASB Technical Bulletins

ACIPA Industry Audit and Accounting Guides

AICPA Statments of Position

Front 65

GAAP (C) Categories

Back 65

FASB Emerging Issues Task Force

AICPA AcSEC Practice Bulletins

Front 66

GAAP (D) Categories

Back 66

AICPA Accounting Interpretations

FASB Implementation Guides

Widely recognized and prevalant industry practices

Front 67

Groups that Apply pressure to the FASB

Back 67

Business entities

CPAs and Accouting firms

AICPA

Acadamicians

Investing Public

Financial Community

Preparers

Governement (SEC, IRS)

Industry Associations

Front 68

Key provisions of the Sarbanes-Oxley act

Back 68

An accounting oversight board will be established that will establish auditing, quality control, and independence standards and rules

Stronger independence rules of auditors, e.g. Audit partners will be required to rotate every five years

CEOs and CFOs must foreit bonuses and profits when ther is an accounting restatment

CEOs and CFOs are required to certify that the financial statements and company disclosures are accurate and complete

Audit committes will need independent members and members with financial expertise

Codes of ethics must be in place for senior financial officers

Front 69

The IASC (International Accounting Standards Committee) was formed in ____, and has recently been renamed the __________.

Back 69

1973; International Accounting Standards Board