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Flashcards in Framework & FASB Deck (23):
0

The FASB is a(n)...

A private sector body

1

The FASB has maintained that:

New GAAP should be neutral and not favor any particular reporting objective.

2

Where can fair value disclosures of financial instruments be made?

In the body of the financial statements and/or the footnotes.

3

Which fund would a salaries expense appear?

Water utilities fund

4

What is the reason for the FASB accounting standards codification?

To out all accounting guidance in one place

5

How are changes to the FASB Accounting Standards Codification accomplished?

Accounting Standards Updates (ASU)

6

What is the highest structure of the FASB acidification

The highest structure is areas.

7

What is the lowest structure of the FASB Codification?

Paragraphs.

8

What are the major areas in the FASB Codification?

General principals 100
Presentation 200
Assets 300
Liabilities 400
Equity 500
Revenue 600
Expenses 700
Broad transactions 800
Industry 900

9

Which characteristics relate to both accounting relevance and faithful representation?

Comparability.

10

Conceptually, interim financial statements can be described as emphasizing:

Timeliness over faithful representation

11

Which characteristic of accounting information primarily allows users of financial statements to generate predictions about an organization?

Relevance

12

What are the primary qualitative characteristics of financial information?

Faithful representation and Relevance (FARR)

13

What is understandability?

Info is understandable if the user comprehends it with reasonable effort and diligence.

14

What is confirmatory value?

To be RELEVANT, accounting info should assist decision makers in confirming past predictions.

15

What is predictive value?

To be RELEVANT, accounting info should assist F/S users in making predictions about future events.

16

What is timeliness?

To be RELEVANT, info must be received in time to make a difference to the decision maker.

17

List the enhancing qualitative characteristics of financial info

Comparability
Verifiability
Timeliness
Understandability

18

What are the ingredients of RELEVANCE?

Predictive value
Confirmatory value
Materiality

19

What are the ingredients of faithful representation?

Completeness
Free from material error
Neutrality

20

What is verifiability?

Info is verifiable if different knowledgeable and independent observers can reach similar conclusions.

21

Neutrality

Accounting info must be free from bias

22

Completeness

Includes all data necessary to be faithfully representative