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Test bank For Intermediate Accounting Exam 1 Study Guide 11th Edition by David Spiceland
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Test bank For Intermediate Accounting Exam 1 Study Guide 11th Edition by David Spiceland
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Test bank For Intermediate AccountingExam 1 Study Guide 11th Edition by
David Spiceland
What is GAAP? - ANSStandards by which accounting info is prepared and presented to external
users. (FASB is source for GAAP through Accounting Standards Codification)
What are the means of Financial Reporting except Financial Statements? - ANSTo provide
financial information about the reporting entity that is useful to present/potential equity investors,
lenders, and other creditors in making decisions in their capacity as capital providers (can be
done through President's letter, prospectuses, reports filed with the SEC & other gov't agencies,
news releases & management forecasts, and social/environmental impact statements)
What are the major financial statements (5) and their purpose? - ANS-Income Statement:
Ultimately shows net income by providing revenues, expenses, gains, losses, and profitability
-Statement of Changes in Stockholders' Equity: Prepares retained earnings, changes in equity
-Balance sheet: Shows Assets= Liability + Owner's Equity ( resources and sources of assets)
-Statement of Cash Flow
-Statement of Comprehensive Income: Shows ALL gains and losses
What organizations were responsible for setting US accounting standards? - ANS-SEC
(Security & Exchange Commission): Federal agency w/ authority to prescribe accounting
standards to be employed by companies that fall within its jurisdiction
-CAP (Committee on Accounting Procedure): Issued standards from AICPA 1939-1959
-APB (The Accounting Principles Board): Issued standards from AICPA 1959-1973
-FASB (Financial Accounting Standards Board): Establishes and improves standards of financial
accounting and reporting for the guidance and education of the public
Who sets US and IFRS accounting standards now? - ANSFASB & IASB
Are there global accounting standards in the world? - ANSGAAP & International Financial
Reporting Standards (IFRS) which is issued by the International Accounting Standards Board
(IASB)
What were the main changes introduced in accounting by Sarbanes-Oxley act? -
ANSEstablished the Public Company Accounting Oversight Board (PCAOB), stronger
independent rules for auditors, requires CEOs and CFOs to perosnaly sign off on financial
statements, audit committees to be made up of independent members and members with
financial expertise, and requires code of ethics for senior officers
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