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Flashcards in Financial Reporting Deck (70)
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61

What is an advantage of Modified Cash Basis Accounting?

It avoids the complexities of GAAP but provides more information that Cash Basis Accounting

62

Is Modified Cash Basis GAAP?

No - GAAP uses Accrual Accounting

63

What are the 3 acceptable options for Income Tax Basis Accounting

Cash Basis - Accrual Basis - Hybrid Method

64

What are the advantages of the Small and Medium Sized Entity Framework?

It simplifies reporting and disclosures for small companies - Reduces Book vs Tax differences - avoids Fair Value measurements (Historical Cost)

65

What are the two options for Income Taxes under the Small and Medium Sized Entity Framework?

Deferred Taxes Method and Taxes Payable Method

66

What are the two options for Startup Costs under the Small and Medium Sized Entity Framework?

Expensed or Amortized (15 years)

67

How is Goodwill treated under the Small and Medium Sized Entity Framework?

Amortized (15 years)

68

What are the required liquidation basis financial statements?

Statement of Net Assets in Liquidation and Statement of Changes in Net Assets in Liquidation

69

What is a Development Stage Entity?

A company that is still in the formation stage and hasn't yet begun principal operations or produced significant revenue

70

What is the key benefit of the accounting rules for Development Stage Entities?

Cost savings without sacrificing financial statement usefulness