CH. 1 CPA and CMA – Flashcards

Which of the following is not a qualitative characteristic of accounting information according to the FASB's conceptual framework? Auditor independence. Neutrality. Timeliness. Predictive value.

According to the conceptual framework, neutrality is a characteristic of Understandability. Faithful representation. Relevance. Both relevance and faithful representation.

The Financial Accounting Standards Board (FASB) Is a division of the Securities and Exchange Commission (SEC). Is a private body that helps set accounting standards in the United States. Is responsible for setting auditing standards that all auditors must follow. Consists entirely of members of the American Institute of Certified Public Accountants.

Confirmatory value is an ingredient of the primary quality of Relevance Faithful Rep a. Yes No b. No Yes c. Yes Yes d. No No

Predictive value is an ingredient of Faithful Repr Relevance a. Yes No b. No No c. Yes Yes d. No Yes

Completeness is an ingredient of the primary quality of Verifiability. Faithful representation. Relevance. Understandability

The objective of financial reporting for business enterprises is based on Generally accepted accounting principles. The needs of the users of the information. The need for conservatism. None of above.

According to the FASB's conceptual framework, comprehensive income includes which of the following? Op Inc Investments a. No Yes b. No No c. Yes Yes d Yes No

The equivalent to the FASB's Financial Accounting Standards Advisory Council (FASAC) for the IASB is: International Financial Reporting Interpretations Committee (IFRIC). International Organization of Securities Commissions (IOSCO). International Financial Accounting Advisory Council (IFAAC). Standards Advisory Council (SAC).

Which of the following is not a function of the IASB's conceptual framework? The conceptual framework provides guidance to standard setters to help them develop high quality standards. The conceptual framework provides guidance to practitioners when individual standards to not apply. The conceptual framework includes specific implementation guidance to enable consistent application of particular complex standards. The conceptual framework emphasizes a "true and fair representation" of the company.

Accounting standard setting in the United States is Done primarily by the Securities and Exchange Commission. Done primarily by the private sector. The responsibility of the public sector. Done primarily by the International Accounting Standards Committee.

Verifiability as used in accounting includes Determining the revenue first, then determining the costs incurred in earning that revenue. The entity's giving the same treatment to comparable transactions from period to period. Similar results being obtained by both the accountant and an independent party using the same measurement methods. The disclosure of all facts that may influence the judgment of an informed reader.

Recognition is the process of formally recording and reporting an item in the financial statements. In order for a revenue item to be recognized, it must be all of the following except Measurable. Relevant. Material. Realized or realizable.