Exam (elaborations)
Test bank For Intermediate Accounting I (Exam 1) Chapters 1-5 (11th Edition by David Spiceland)
- Course
- Institution
Test bank For Intermediate Accounting I (Exam 1) Chapters 1-5 (11th Edition by David Spiceland)
[Show more]
Content preview
Test bank For Intermediate AccountingI (Exam 1) Chapters 1-5 (11th Edition by
David Spiceland)
objective of financial reporting - ANSprovide financial information about the reporting entity that
is useful to present and potential equity investors, lenders, and other creditors
general-purpose financial statements - ANSprovide financial reporting information to a wide
variety of users
accrual basis accounting - ANSensures that a company records events that change its financial
statements in the periods in which it receives or pays cash
generally accepted accounting principles (GAAP) - ANScommon set of accounting standards
and procedures:
Securities and Exchange Commission (SEC)
American Institute of Certified Public Accountants (AICPA)
Financial Accounting Standards Board (FASB)
Financial Accounting Standards Board - ANSestablish and improve standards of financial
accounting and reporting for the guidance and education of the public which includes issuers,
auditors, and users of financial information
Accounting Standards Updates - ANSThese updates amend the Accounting Standards
Codification, which represents the source of authoritative accounting standards
Four primary financial statements - ANSBalance Sheet
Income Statement
Statement of Cash Flows
Statement of Owner's/Stockholders' Equity
Conceptual Framework - ANSestablishes the concepts that underlie financial reporting.
Relevance (Fundamental Quality) - ANSaccounting information must be capable of making a
difference in a decision. Financial information is capable of making a difference when it has
predictive value, confirmatory value, or both.
Predictive Value - ANSif it has value as an input to predictive processes used by investors to
form their own expectations about the future
, Confirmatory value - ANSrelevant information also helps users confirm or correct prior
expectations
Faithful Representation (fundamental quality) - ANSmeans that the numbers and descriptions
match what really existed or happened
Completeness - ANSmeans that all the information that is necessary for faithful representation
is provided
Neutrality - ANSmeans that a company cannot select information to favor one set of interested
parties over another. Unbiased information must be the overriding consideration.
Free from Error - ANSmore accurate (faithful representation) of a financial item
Comparability (Enhancing Qualities) - ANSenables users to identify the real similarities and
differences in economic events between companies.
Consistency - ANSwhen a company applies the same accounting treatment to similar events,
from period to period.
Verifiability - ANSoccurs when independent measurers, using the same methods, obtain similar
results.
Timeliness - ANShaving information available to decision-makers before it loses its capacity to
influence decisions.
Understandability - ANSDecision-makers vary widely in the types of decisions they make, how
they make decisions, the information they already possess or can obtain from other sources,
and their ability to process the information.
Assets - ANSprobably future economic benefits obtained or controlled by a particular entity as a
result of past transactions or events
Liabilities - ANSProbable future sacrifices of economic benefits arising from present obligations
of a particular entity to transfer assets or provide services to other entities in the future as a
result of past transactions or events.
Equity - ANSResidual interest in the assets of an entity that remains after deducting its liabilities.
Investments By Owners - ANSIncreases in net assets of a particular enterprise resulting from
transfers to it from other entities of something of value to obtain or increase ownership interests
(or equity) in it.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller AllLegitExams. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now
