ACCT 301 Smartbook Chapter 1 Environment and Theoretical Structure of Financial solutions answers

ACCT 301 Smartbook Chapter 1 Environment and Theoretical Structure of Financial Accounting solutions complete answers 

 

       accounting is chiefly concerned with providing information to external users.

 

What are the three primary forms of business organizations?

 

Which of the following models is best in helping predict future cash flows?

 

The financial reporting model used by the majority of profit oriented companies is        accounting. (Enter only one word.)

 

If the SEC does not agree with a standard issued by the private sector, it can

 

Financial accounting is chiefly concerned with providing information to various        users. (Enter only one word.)

 

Which organization is currently the national professional organization for certified professional public accountants?

 

Which of the following forms of business provide shares of stock as an ownership interest?

 

The        was established to set U.S. accounting standards and is the current standard setting body. (Use acronym.)

 

Which accounting model best meets the primary goal of users of financial reporting?

 

As of July 1, 2009, the single source of nongovernmental U.S. GAAP is found in the

 

What financial reporting model is used by most profit-oriented businesses and not-for-profit entities?

 

In developing standards, the FASB considers the:

 

The legal authority to set accounting and reporting standards for companies whose securities are publicly traded lies with the

 

Auditors examine financial statements to express a professional, independent        on the financial statements. (Enter one word per blank)

 

The AICPA is the national professional organization for certified professional public       . (Enter only one word.)

 

Ethics deals with the ability to distinguish        from       . (Only one word per blank)

 

The acronym for the private sector organization that sets accounting standards in the United States is the

 

The "Accounting Constitution", a coherent system of interrelated objectives and fundamentals that lead to consistent standards and that prescribe the nature, function, and limits of financial accounting and reporting is referred to as the        framework. (Enter only one word.)

 

The FASB Accounting Standards        organizes all relevant accounting pronouncements in a searchable, online database (Enter only one word.).

 

The primary purpose of financial reporting is to provide useful information for decision making to

 

Before issuing an Accounting Standards Update, the FASB undertakes a series of information-gathering steps including

 

The overriding objective in the hierarchy of qualitative characteristics of financial reporting information is

 

What is the purpose of the audit report?

 

A code or moral system that provides criteria for evaluating right or wrong is referred to as        . (Enter one word per blank)

 

Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events are referred to as       .

 

True or false: The conceptual framework does not prescribe GAAP.

 

What information regarding an entity's future cash flows are investors and lenders interested in? (Select all that apply.)

 

The four basic accounting assumptions (Select all that apply.)

 

The primary focus of the qualitative characteristics of accounting information is:

 

Recognition refers to the process of

 

What is the purpose of the auditor?

 

The process of associating numerical amounts to the elements of the financial statements is referred to as       . (Enter only one word.)

 

What element of the financial statements is described by the following definition? "Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions."

 

The purpose of the FASB's conceptual framework in accounting is to

 

The process of including additional pertinent information in the financial statements and accompanying notes is referred to as       . (Enter one word per blank)

 

Which of the following are among the basic assumptions underlying U.S. GAAP? (Select all that apply.)

 

According to SFAC 5, the four criteria that must be met for an item to be recognized in the basic financial statements are

 

The process of admitting or recording an item into the basic financial statements is referred to as

 

Expense recognition often matches        and        that arise from the same transaction.

 

Measurement is the process of associating numerical amounts to the        reported in financial statements. (Only one word per blank.)

 

Expense recognition is implemented by which of the following ways? (Select all that apply.)

 

Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events are referred to as       .

 

The principle stating that asset and liability measurements should be based on the amount given or received in the original transaction is referred to as the               principle. (Enter one word per blank.)

 

Disclosure refers to the process of

 

              bases measurements on the price that would be received in an orderly market transaction. (Only one word per blank.)

 

Select the four criteria used to determine if an item is recognized in the financial statements according to SFAC 5.

 

What level of the fair value hierarchy includes unobservable inputs that reflect the entity's own assumptions?

 

Expenses are        to revenues from the same transaction. (Enter only one word.)

 

An emphasis is placed on proper income statement item recognition under what approach under US GAAP?

 

Matching cost of goods sold with the revenues generated during the period is an example of which approach to expense recognition?

 

Measuring assets and liabilities based on their original transaction value is an example of

 

The price that would be received to sell assets or paid to transfer a liability in an orderly transaction between market participants at the measurement date is the               . (Only one word per blank.)

 

Match the fair value hierarchy level of input with its definition.

 

The revenue/expense approach focuses on the income statement because it relies on which accounting principles? (Select all that apply.)

 

The difference between revenue and expenses when expenses are greater is called 

 

The difference between revenue and expenses when revenue are greater is called 

 

Jody's expenses exceed her revenues for the period. Jody has a net        for the period. (Enter only one word.)

 

Accrual income attempts to measure the resource inflows and outflows generated by the company’s        during the reporting period.

 

Resource inflows and outflows may not correspond to cash inflows and outflows.

 

Cash basis accounting is the required accounting method for most profit-oriented companies. 

 

The citation used to reference generally accepted accounting principles is

 

It is the responsibility of___________to apply Generally Accepted Accounting Principles in preparation of the company's financial statements. (Enter only one word.)

 

What classification would the following auditor opinion receive?: "In our opinion, the consolidated financial statements listed in the accompanying index present fairly . . . in conformity with U.S. GAAP.“ 

 

The 1933 and 1934 Acts were designed to restore investor        in the stock market.

 

If the SEC does not agree with a standard issued by the private sector, it can 

 

In 2007, the SEC eliminated the requirement for _________companies that issue stock in the United States to include in their financial statements a reconciliation of IFRS to U.S. GAAP. (Enter only one word.) 

 

Differences in implementation and enforcement of IFRS across countries can impact the __________  of financial statements.

 

The first private accounting standard setting body in the United States was the

 

The first body to set accounting standards in the U.S. was the 

 

The private sector organization that is currently responsible for setting accounting standards in the United States is the

 

Which accounting standard setting body replaced the Accounting Principles Board in 1973?

 

The Emerging Issues Task Force (EITF) was formed to resolve _________ financial accounting issues within the framework of existing GAAP.

 

In addition to issuing accounting standards, the FASB has formulated a conceptual         to provide an underlying theoretical and conceptual structure for accounting standards.

 

Which of the following provides an underlying structure for the development of accounting standards?

 

The Emerging Issues Task Force (EITF) was formed to

 

True or false: The FASB Codification project revised and updated U.S. accounting standards with international accounting standards,

 

What was the purpose of the FASB Accounting Standards Codification project?

 

The acronym for the Accounting Standards Codification is 

 

The FASB considers written comments from interested parties before issuing an Accounting Standards Update.

 

Economic consequences for EU member nations are an important consideration in the adoption of International Financial Reporting Standards. 

 

Which of the following represent(s) an important objective of the IASB?

 

The International Accounting Standards Committee issued International Accounting Standards (IAS), whereas the International Accounting Standards Board currently issues

 

The IASB is dedicated to developing a set of high-quality, understandable, and enforceable _______________ accounting standards

 

Which of the following would be a likely advantage of a single set of accounting standards?

 

The International Accounting Standards Committee provides oversight, appoints members, and raises funds to support the: 

 

In which of the following areas did the FASB and IASB achieve converged standards?

 

Pressure from _______ and __________influenced the FASB to revise guidance on fair value accounting.

 

Who serves as an independent intermediary to help ensure that management has appropriately applied GAAP in preparing the financial statements? 

 

The Private Company Council (PCC) determines whether changes to existing GAAP are necessary to meet the needs of 

 

A(n) ___________ opinion signals that a company's financial statements do not contain material departures from US GAAP.

 

The Sarbanes-Oxley Act increases accountability of who?

 

The Sarbanes-Oxley Act requires that lead audit partners are required to rotate every ______ years.

 

Under the Sarbanes-Oxley Act, who is responsible for the selection of a corporation's auditor?

 

The organization responsible for the code of ethics for accountants working in government and industry is the

 

Which approach to standard setting emphasizes the use of professional judgment when choosing how to account for a transaction?

 

What is the distinguishing feature of a profession?