Lesson 1 Flashcards
(23 cards)
What is the first step in the decision-making process?
Identify the issue.
What is the second step in the decision-making process?
Gather Information.
What is the third step in the decision-making process?
Identify Alternatives.
What is the fourth step in the decision-making process?
Select the option that will most likely result in the desired objective.
True or False: The decision-making process involves only one step.
False
Fill in the blank: The decision-making process includes _______.
four steps
Which primary financial statement reports the resources, obligations, and owner’s equity of a company?
Balance sheet
The balance sheet includes assets (resources), liabilities (obligations), and owner’s equity.
Which of the primary financial statements reports the resources, obligations, and owner’s equity of a company?
Balance sheet
The balance sheet details a company’s assets (resources), liabilities (obligations), and owner’s equity.
What is the role of the IASB in regulating accounting standards?
Establish international accounting standards
The IASB is a private organization based in London and does not have legal authority to set accounting standards for U.S. companies.
Is the IASB a governmental body?
No
The IASB is a standalone organization overseen by a Board of Trustees and is not under the jurisdiction of the SEC, the European Union, the United Nations, or any other governmental body.
Where is the IASB based?
London
The IASB establishes worldwide accounting standards but currently lacks legal authority for U.S. companies.
Can U.S. companies use IASB standards?
No, but non-U.S. companies with shares traded on U.S. stock exchanges can
The SEC allows the use of IASB standards for these non-U.S. companies.
True or False: The IASB works as a subcommittee of the AICPA.
False
The IASB is an independent organization and not a subcommittee of the American Institute of Certified Public Accountants.
What group of people make up the FASB?
People from a variety of business-related backgrounds
FASB members historically represent a broad business constituency including auditors, corporate accountants, analysts, and accounting academics. The FASB is not directly controlled by the SEC, although SEC input is extremely important to its deliberations.
What is the role of the GASB in setting accounting standards?
The GASB establishes accounting standards
The Governmental Accounting Standards Board (GASB) focuses on setting standards for state and local governments.
What does GASB stand for?
Governmental Accounting Standards Board
The GASB is responsible for establishing accounting and financial reporting standards for U.S. state and local governments.
What is the primary role of the GASB?
To establish accounting and financial reporting standards for U.S. state and local governments.
The GASB works to improve the quality of financial reporting in the public sector.
True or False: The GASB establishes accounting standards in collaboration with the IRS.
False
The GASB collaborates with the SEC and the IASB, not the IRS.
Fill in the blank: The GASB is a _______ organization.
private-sector
The GASB operates independently as a private-sector organization.
Which organizations does the GASB collaborate with?
- SEC
- IASB
The GASB works alongside these organizations to enhance accounting standards.
What types of governments does the GASB provide standards for?
State and local governments
The GASB focuses specifically on U.S. state and local governmental entities.
In what way do accountants have an economic incentive to conduct themselves ethically?
The value of the information produced by accountants is related to the confidence that users have in reliability of that information
How is it possible for an accountant intentionally deceive financial statement users and still technically be in compliance with GAAP
There is flexibility inherent in the assumptions underlying the preparation of financial statements
