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Flashcards in Chapter 1 Final Exam Study Deck (17):
1

The type of financial information to external decision makers is referred to as:

Financial Accounting

2

Financial statements generally include all of the following except:
-Income statement
-Federal income tax return
-Balance sheet
-Statement of cash flows

Federal Income Tax Return

3

The primary objective of financial reporting is to provide information:

That is useful in decision making

4

GAAP includes the following pronouncements:

-Statements of Financial Accounting Standards.
-Accounting Research Bulletins.
-Accounting Principles Board Opinions.

5

The SEC exerts a continuing influence on the establishment of accounting standards. It does so primarily by:

Monitoring the development of GAAP within the accounting profession and using its stature to influence that development.

6

The documents that set forth fundamental concepts on which financial accounting and reporting standards will be based are:

Statements of Financial Accounting Concepts.

7

The two primary decision-specific qualities that make accounting information useful are:

Relevance and faithful representation.

8

Relevance requires that information possess predictive and/or:

Confirmatory value.

9

The qualitative characteristic that means there is agreement between a measure and a real-world phenomenon is:

Representational faithfulness.

10

Which of the following is considered a practical constraint on the qualitative characteristics?
-Verifiability
-Conservatism
-Cost effectiveness
-Timeliness

Cost effectiveness

11

Which of the following characteristics does not describe an asset?
-Probable future economic benefits.
-Controlled by an entity.
-requires the receipt of cash.
-Result of a past transaction.

Requires the receipt of cash.

12

Which of the following characteristics does not describe a liability?
-Result of a past transaction.
-Probable future sacrifices
-Present obligation
-Must be legally enforceable.

Must be legally enforceable.

13

The underlying assumption that presumes a company will continue indefinitely is:

Going concern

14

The underlying assumption that assumes that the life of a company can be divided into artificial time periods is:

Periodicity

15

In general, revenue is recognized when the earnings process is virtually complete and:

Goods or services are transferred to the customer.

16

The primary objective of matching is to:

Recognize expenses in the same period as the related revenue.

17

The main objective of the IASB is to:

Develop a single set of global accounting standards.