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Spring 24 > ACCTg 471 Quiz 1 > Flashcards

ACCTg 471 Quiz 1 Flashcards

1
Q

Hierarchy of Accounting Standard Setting

A

Congress -> SEC -> Private Sector (FASB)

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2
Q

What are all the past and present private sector standard setting organizations?

A

CAP (Committee on Accounting Procedure)
APB (Accounting Principles Board)
FASB (Financial Accounting Standards Board)

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3
Q

Qualitative Characteristics of Conceptual Framework

A

Decision Usefulness->

Relevance and Faithfulness

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4
Q

Characteristics of Relevance

A

confirmatory value, predictory value, materiality

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5
Q

Characteristics of Faithfulness

A

completeness, neutrality, free from error

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6
Q

Enhancing Characteristics of Decision Usefulness

A

comprability, verifiability, timeliness, understandability

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7
Q

Revenue Recognition

A

businesses recognize revenue when it’s earned (accrual accounting)

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8
Q

Expense Recognition

A

companies recognize expenses at the same time as matching revenues

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9
Q

5 Measurement Attributes of GAAP

A
  1. Historical Cost
  2. Net Realizable Value
  3. Current Cost
  4. Present Value of Future Cash Flows
  5. Fair Value
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10
Q

Fair Value Hierarchy

A

Most Desirable: quoted market price for identical assets
Second Most Desirable: quoted price for similar asset
Third Most Desirable: entity assumes market price because there is no observable similar asset

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11
Q

Constraints on Financial Reporting

A

cost of gathering, processing, and disseminating
information and proprietary cost

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12
Q

What is the Sarbanes Oxley Act?

A

act that improved credibility, accounting standards, and confidence in public markets

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13
Q

What are the provisions of SOX?

A

Oversight board

Corporate executive accountability

Nonaudit services

Retention of work papers

Conflicts of interest

Hiring of an auditor

Internal controls

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14
Q

What is Cash Basis Accounting?

A

Revenue is recognized when
cash is received.

Expenses are recognized when
cash is paid

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15
Q

What is Accrual Basis Accounting?

A

Revenue is recognized
when earned.

Expenses are recognized
when incurred

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16
Q

What is a 10-K?

A

yearly analysis of company

filed within 60 days

17
Q

What is a 10-Q?

A

Unaudited quarterly report updating the 10-K

filed within 40 days

18
Q

What is a 20-F?

A

Filed by foreign companies with shares in US companies

filed within 6 months

19
Q

What is a 8-K?

A

Report filed announcing events investors should know
about

filed within 4 days

20
Q

What is the main message of the parable of the Ox?

A

we need standardized accounting because when information is provided to us, we come up with different answers which causes accounting discrepancies

21
Q

External Events

A

Involve an exchange transaction with another entity

22
Q

Internal Events

A

Do not involve an exchange transaction with another entity (depreciation)

23
Q

What is step 1 of the accounting cycle?

A

Obtain information about transactions from source documents

24
Q

What is step 2 of the accounting cycle?

A

process of reviewing the source documents to determine the dual effect on the accounting equation

25
Q

What is step 3 of the accounting cycle?

A

Record the Transaction in a Journal

26
Q

What is step 4 of the accounting cycle?

A

Post from the journal to the general ledger accounts

27
Q

What is step 5 of the accounting cycle?

A

Prepare unadjusted trial balance

28
Q

What is step 6 of the accounting cycle?

A

Record Adjusting Entries and Post to the Ledger Accounts

29
Q

What is step 7 of the accounting cycle?

A

Prepare an Adjusted Trial Balance

30
Q

What is step 8 of the accounting cycle?

A

Preparation of Financial Statements

31
Q

What is step 9 of the accounting cycle?

A

Closing Process

32
Q

What is step 10 of the accounting cycle?

A

Prepare a Post-Closing Trial Balance

prepared at year end

Spring 24 (14 decks)

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