ACCOUNTING CRASH COURSE EXAM LATEST 2024 WITH ACTUAL QUESTIONS AND CORRECT VERIFIED ANSWERS/100% GUARANTEED PASS! ALREADY GRADED+ Accounting is important for - ANSWER -firm's officers, investors, lenders, and the general public Generally Accepted Accounting Principles (GAAP) - ANSWER -a set of accounting standards that is used in the preparation of financial statements Securities and Exchange Commission (SEC) - ANSWER --division of corporate finance: oversees financial reporting by corporations Financial Accounting Standards Board (FASB) - ANSWER -Types of pronouncements: -Statements of Financial Accounting Standards -Interpretations -Financial Accounting Concepts -Emerging Issues Task Force Statements International Financial Reporting Standards (IFRS) - ANSWER -unified set of international accounting standards Assumption 1: Accounting Entity - ANSWER --a company is considered a separate "living" enterprise apart from its owners -it is engaged in clearly -defined activities -regularly reports its financial health to the general publics -pays taxes and can file lawsuits Assumption 2: Going Concern - ANSWER --a corporation is assumed to remain in existence indefinitely -assets and liabilities are recognized values that assume the company will not have to sell them at liquidation Assumption 3: Measurement - ANSWER --financial statements must be reported in the national monetary unit -can only show measurable activities of a corporation Assumption 4: Periodicity - ANSWER --companies are required to file annual and interim reports -a fiscal year is frequently but not always aligned with the calendar year Principle 1: Historical Cost - ANSWER --financial statements report companies' resources at an initial historical cost -represents the easiest measurement method without a need a for appraisal and revaluation -minimized management discretion and subjectivity -IFRS is more willing to allow this subjectivity to avoid misrepresenting the true value of assets Principle 2: Revenue Recognition - ANSWER -accrual basis of accounting dictates that revenues must be recorded when earned and measurable -cannot be recorded until the order is shipped to a customer and collection from that customer (who uses a credit card) is reasonably assured Principle 3: Matching Principle - ANSWER -costs associated with making a product must be recorded during the same period as revenue generated from that product Principle 4: Full Disclosure - ANSWER -companies must reveal all relevant economic information that they determine to make a difference to its users -should be accomplished in: financial statements, notes to financial statements, and supplementary information Contraint 1: Estimates & Judgements - ANSWER -certain measurements cannot be performed completely accurately and must therefore utilize conservative estimates and judgements Constraint 2: Materiality - ANSWER -inclusion and disclosure of financial transactions in financial statements hinge on their size and effect on the company performing them -materiality varies across different entities Constraint 3: Consistency - ANSWER -for each company, the preparation financial statements must utilize measurement techniques and assumptions which are consistent from one period to another Constraint 4: Conservatism - ANSWER -financial statements should be prepared with a downward measurement bias -assets and revenues should not be overstates, while liabilities and expenses should not be understated Form 10 -K - ANSWER --required annual filing -must be filed within 60 -90 days within year end -provides the most detailed overview of companies' financial operations and regulations governing them Form 10 -Q - ANSWER --publicly -traded companies file a quarterly report with the SEC for the first three quarters -must be filed within 40 -45 days of quarter end 10-K vs. 10 -Q - ANSWER --10-K's are more detailed -10-K reports are audited by an independent firm while 10 -Q filings are reviewed by a CPA but are unaudited Form 8 -K - ANSWER -required filing any time a company undergoes or announces a materially significant event such as a n earnings press release, an acquisition, a disposal of assets, bankruptcy, etc. -usually filed within 4 days of the event Form 14A (Proxy Statement) - ANSWER --required filing prior to companies' annual shareholder meetings -contains detailed information about top officers and their compensations Important Sections of the 10 -K - ANSWER --Item 6: selected financial data -Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations -Item 8: Financial Statements and Supplementary Data
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