CPA FAR Exam With 100% Correct Solutions

Identifying a Variable Interest (VIE) - Correct Answer - All Must be Met: 1. There is an arrangement between company and business entity 2. The business entity is a legal entity 3. The business fails to qualify for an exclusion 4. The interest is more than insignificant 5. The company has an explicit or implicit variable interest in the entity Securities and Exchange Commission - Correct Answer - - established in 1934 by Securities and Exchange Act - all public and large private companies are subject to their rules and regulations - has issued specific accounting rules and regulations in Regulation S-X, Financial Reporting Releases (FRR), Accounting Series Releases (ASR), Interpretative Releases (IR), etc. Committee on Accounting Procedures - Correct Answer - determined GAAP from 1939 to 1959 - part-time committee of the AICPA that promulgated Accounting Research Bulletins Accounting Principles Board - Correct Answer - determined GAAP from 1959 to 1973 - part time committee of the AICPA that issued Accounting Principles Board Opinions and APB interpretations Financial Accounting Standards Board - Correct Answer - established in 1973 and has determined GAAP ever since then - up to 2009 issued Financial Accounting Standards, FASB interpretations, FASB technical Bulletins, Emerging Issues Task Force Statements, FASB Staff Positions, FASB implementation Guides, and Statements of Financial Accounting Concepts - has 7 full time members with 5 year terms FASB Accounting Standards Codification - Correct Answer - - codified on July 2009 - became the single source of authoritative nongovernmental US GAAP FASB updates to ASC & SEC content - Correct Answer - - FASB amendments issued for public comment through exposure drafts - majority vote of the Board need to approve an exposure draft for issuance - FASB staff analyzes all comment letters from public and then the Board re-deliberates the issue - FASB staff prepares an Accounting Standards Update for Board - majority vote of Board needed to amend the ASC IASB - Correct Answer - established in 2001 as part of the International Financial Reporting Standards Foundation FASB Conceptual Framework - Correct Answer - - statements of financial accounting concepts -serve as basis for financial accounting concepts for business and nonbusiness enterprises- NOT GAAP, just basic reasoning of why Objective of General Purpose Financial Reporting - Correct Answer - to provide financial information about the reporting entity that is useful to the primary users in making decisions about providing resources to the reporting entity Form 10-K Deadlines - Correct Answer - - Large Accelerated = 60 days - Accelerated = 75 days - All Others = 90 days Form 10K - Correct Answer - must be filed annually by US registered companies - contains financial disclosures, including a summary of financial data, management's discussion and analysis, and audited financial statements prepared using GAAP Form 10Q - Correct Answer - filed quarterly by US registered companies - includes unaudited financial statements, interim period MD & A and certain disclosures Form 10-Q Deadlines - Correct Answer - - Large Accelerated = 40 days - Accelerated = 40 days - All Others = 45 days Form 11K - Correct Answer - Employee Benefit Plans Form 20 F - Correct Answer - - non US annual report Form 40 F - Correct Answer - Canadian annual report Form 6 K - Correct Answer - filed semiannually by FOREIGN private issuers similar to 10-Q Form 8 K - Correct Answer - reports major events Ex: new CEO, audit firm, asset acquisitions, disposals Forms 3, 4, and 5 - Correct Answer - forms required by 10% owners Interim Financial Reporting - Correct Answer - - Balance Sheets: end of the most recent fiscal quarter and as of the end of the preceding fiscal year - Income Statements: most recent fiscal quarter, for period between the end of the preceding fiscal year and the end of the most recent fiscal quarter, and for the corresponding periods of the preceding fiscal year also for the cumulative 12 month period ended during the most recent fiscal quarter & the corresponding preceding period - Statement of Cash Flows: period between the end of the preceding fiscal year and the end of the most recent fiscal quarter, and corresponding period for the preceding fiscal year cumulative 12 month period ended during the most recent fiscal quarter and for the corresponding preceding period Annual Financial Reporting - Correct Answer - - 2 Balance Sheets - 3 Income Statements - 3 Cash Flows - 3 Changes in Owner's Equity Annual financial Reporting IFRS - Correct Answer - - 2 balance sheets - 2 statements of comprehensive income - 2 statements of changes in equity - 2 statements of cash flows XBRL - Correct Answer - software that uses XML to electronically file data and link it