Inside, Internal - CORRECT ANSWER-Managerial info is inside or outside the
business?
True. Financial accounting is only outside. Managerial accounting can be inside
AND outside. - CORRECT ANSWER-True or false, managerial accounting uses
BOTH managerial and financial accounting?
Outside, External, includes lenders and investors - CORRECT
ANSWER-Financial is inside or outside the business?
Balance sheet, income statement, and statement of cash flows - CORRECT
ANSWER-The financial statement includes what 3 documents
Balance Sheet - CORRECT ANSWER-Point in time, Assets (resources) and
liabilities (obligations)
Income Statement - CORRECT ANSWER-Period of time (usually 1 year),
amount of profit made
Statement of Cash flows - CORRECT ANSWER-Period of time, where money
came from, and where it went. Inflow and outflow of cash (Cash Flows). Change
in money for the period.
,Operating, investing, and financial activities - CORRECT ANSWER-The
statement of cash flows includes what three activities
FASB: Financial accounting standards. Private, no government involvement. It is
a public process, includes individuals experienced in business and accounting (7
members). - CORRECT ANSWER-The decision makers in the U.S. (accounting
rules)
GAAP: General accepted accounting principles - CORRECT
ANSWER-Developed by accounting rule makers. No Legal authority.
comparability - CORRECT ANSWER-We need accounting rules for...
SEC: Security and exchange commission. Located in Article 1, Sec 8, Clause 3 -
CORRECT ANSWER-U.S. gov agency responsible for ensuring that investors,
creditors, and other financial statement users are provided with reliable
information. It watches behavior in financial markets.
Registration statements (prospectus), Form 10-K, Form 10-Q, and schedule 14A
(proxy statement). These are all publicly viewable. - CORRECT ANSWER-What
forms do the SEC regulate?
Oversees stock exchanges, can suspend a company, investigate and suspect
violations of the SEC rules. - CORRECT ANSWER-What does the SEC do?
YES. The SEC has legal authority to establish accounting rules and disclosure
requirements. - CORRECT ANSWER-Does the SEC have legal authority?
USA congress->SEC->FASB - CORRECT ANSWER-Financial accounting rule
per the US constitution
FASB: Financial accounting standards board - CORRECT ANSWER-The SEC
created the
GAAP (has no legal authority) - CORRECT ANSWER-FASB created
,AIPCA: American INSTITUTE of certified public accountants. - CORRECT
ANSWER-What sets auditory standards, continue education credits, CPA exam,
and is the code of professional conduct?
Only CPA's: Certified public accountants. - CORRECT ANSWER-Who is the only
person who can sign audit reports?
PCAOB: Public company accounting oversight board. - CORRECT
ANSWER-The Sarbanes-Oxley Act "SOX" created?
Under supervision of the SEC. - CORRECT ANSWER-PCAOB is under
supervision of?
PCAOB: Public Company Accounting OVERSIGHT Board. - CORRECT
ANSWER-Who appoints members, approves actions, gov standards,
inspections, and investigations? It is a private group and OVERSEES.
AUDITORS?
U.S. Gov agency that collects and regulates income taxes. Their primary goal is
to collect revenue. - CORRECT ANSWER-IRS
Economic income and accounting income books. & Tax income, and cash flow
books. - CORRECT ANSWER-There are two sets of books. Tax Books and
Financial accounting books.
Similar to the FASB, but not 100% the same. It is international, everywhere but
the U.S. - CORRECT ANSWER-IASB: Internatonal Accounting Standard Board
Who enforces and national policies. - CORRECT ANSWER-Barriers to
international convergence are?
Condorsement - CORRECT ANSWER-Rules set centrally, but legally adopted
and enforced locally?
The SEC, SOX, and PCAOB. - CORRECT ANSWER-To increase government
regulation, one would use:
, Reduce uncertainty and allows lenders and investors to target their financing and
investing to the level of risk they are willing to take. - CORRECT
ANSWER-Financial statements
Adudit - CORRECT ANSWER-A financial statement that furthermore decreases
uncertainty.
Income Statement - CORRECT ANSWER-Provides accountants the best attempt
at measuring the economic performance of a company.
Balance sheet - CORRECT ANSWER-Mother of all financial statements.
Assets (resoures) - CORRECT ANSWER-Resources owned or controlled by a
company that will provide probable future economic benefit.
Liabilities (obligations) - CORRECT ANSWER-Obligations that require the
probable future sacrifice of economic benefits in the form of the transfer of assets
or the providing of services.
Equity - CORRECT ANSWER-Investment amount in the business PLUS how
much profit they have left in the business. L-A=E
1 paid in capital, 2 retained earnings, 3 treasure stock, 4 accumulated other
comprehensive income. - CORRECT ANSWER-Owners Equity
PIC: Paid in capital - CORRECT ANSWER-The amount originally paid in
exchange for share of stock
Retained earnings - CORRECT ANSWER-CUMMULATIVE earnings that have
been retained in the business
Treasury stock - CORRECT ANSWER-Company buys back its own shares of
stock, shown as a subtraction from equity.
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