F1

Question 1

What is included within the summary of significant accounting policies in the notes of the Financial Statements?

Answer 1

Measurement bases (basis)
Policies and procedures
criteria
pricing
policies
principles and methods

Question 2

What is the formula for segment profit (loss)

Answer 2

revenues
less: Directly traceable costs
Less: Reasonably allocated Costs
= the operating profit or loss

Question 3

What is a form 10-k?

Answer 3

Must be filed annually by companies (issuers)

60 days after the filing period for large filers, 75 days for regular filers, and 90 days for all others

Question 4

Large accelerated filers?

What are accelerated filers?

Answer 4

They have revenues of more than 700 million, and have worldwide market.

They are worldwide and have more than 75 million but not more than 700 million

Question 5

What is form 10-Q?

Answer 5

Must be filed quarterly. The deadlines are 40 days and 45 days

Question 6

What is form 11-k?

Answer 6

Employee benefit plan

Question 7

What are forms 20-f and 40-F?

Answer 7

Filed annually by foreign private issuers.

Form 40-F is filed by Canadian companies with the SEC, and 20F is all other international filers

Question 8

What is form 6-K?

Answer 8

Filed semi annually by foreign private issuers

Question 9

What is form 8-K?

Answer 9

This form indicates major corporate events like asset disposals, changes in securities and trading markets, corporate asset acquisitions

Question 10

What are forms 3, 4, 5?

Answer 10

These files are reported by directors, officers, or beneficial owners of more than 10% of a class of equity securities of a registered company

Question 11

What is regulation S-X?

Answer 11

This sets forth the form and requirements of the annual and interim financial statements

Question 12

What is included as selling expenses?

Answer 12

Freight out
selling expense
sales salaries
Office space
Advertising

Question 13

What is part of the general and administrative expenses.?

Answer 13

Legal and audit fees
If the audit space is occupied by the accounting department
Insurance
Officer Salaries

Question 14

How should a change in accounting estimate be reported?

Answer 14

It should not be reported anywhere, unless in the notes if it is material. The reason being it gets handed prospective treatment

Question 15

What are freight in and Freight-out costs associated with?

Answer 15

Freight out is a selling expense

Freight in is a cost of inventory

Question 16

Are operating or capital leases part of disposal activity?

Answer 16

The answer is that any cost associated with disposal of a lease will be considered okay, EXCEPT a capital lease.

Question 17

What is the SEC standards that are in the code?

Answer 17

Regulation - Regulation s-x  
For - FRR
Accounting - ASR
I- IR interpretive releases
S
Emergin

Question 18

What act of which year created the SEC?

What act do you have to comply with for a publicly traded company?

Answer 18

The act of 1933 created the SEC, and you must comply with the act of 1934.

Question 19

What does passing confirms money mean?

Answer 19

Passing confirms money is a qualitative characteristic that fall under Relevance.
P- predictive value
C- conforming value
M - materiality.

Question 20

What is the criteria under faithful representation?

Answer 20

This is the second topic under qualitative characteristics. 
Completely Neutral is Free from Error
C- must be complete
N- neutrality
F - free from error

Question 21

What are enhancing qualities?

Answer 21

• Comparability
• verifiability
• Timelines
• Understnadabiliy

Question 22

What are the five elements of present value measurement?

Answer 22

EVTUO

• E= estimated future cash flow
• V= timing of the variations of future cash flow
• T= time value of money
• U= Price of uncertainty.
• O= Other factors.

Question 23

What is the difference between replacement cost and market cost?

Answer 23

• Market cost is the price that you would get if you were to sell an asset, or get rid of a liability.
• Replacement cost is the cost to dispose of an asset and acquire another asset, the same one.

Question 24

If you go from cash basis to a accrual basis how is this accounted for?

Answer 24

This is a change that is handled retrospectively and will be handled as an error for you are not allowed to use the cash basis of accounting.

Question 25

What is the criteria for recognizing a liability associated with disposal and exit activities?

Answer 25

1. There is an obligating event
2. The event results in a present obligation to transfer the rights assets or services in the future.
3. The entity has little to no discretion to avoid the future transfer of assets.

Question 26

What are the thresholds that must be met in order for one to qualify for a reportable segment?

Answer 26

• 10% size test - applies to external and internal sales.
  revenue (if sales and inter segment sales is 10% or more of the combined revenues) or reported profit or loss.
• 75% reporting sufficiency test only applies sot external revenue only.
  you break down the reporting segment until you add up to 75% of the major revenues broken down.