Intermediate Accounting 2 Flashcards, test questions and answers

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What is Intermediate Accounting 2?

Intermediate Accounting 2 is the second of two levels of accounting courses that are part of an accounting program. It covers more advanced topics than those taught in Intermediate Accounting 1, such as financial statement analysis, cost accounting, and international accounting. Additionally, students learn about the Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standards (IFRS). These principles provide a framework for how businesses prepare and present financial statements. The course begins by examining assets and liabilities on a company’s balance sheet. This includes an in-depth look at current assets such as cash, marketable securities and receivables; long-term assets including investments; fixed assets like property plant and equipment; intangibles such as goodwill; liabilities including current debts, deferred taxes, bonds payable; stockholders’ equity including common stock, preferred stock and retained earnings. Students learn about measuring these items in accordance with GAAP or IFRS depending on the jurisdiction where the business operates. In addition to understanding how to record transactions for each item on a balance sheet, students also learn about depreciation methods for both tangible and intangible assets. This includes studying accelerated methods like double declining balance, sum-of-the year digits method or straight line depreciation along with cost recovery rules related to taxes imposed by different governments around the world. Furthermore they will analyze different types of leases (operating leases vs capital leases) that companies engage in as well as how impairment losses are calculated when an asset’s value decreases significantly due to something like natural disaster or obsolescence brought on by technology advances or changes in consumer preferences. Finally students will be exposed to various aspects of corporate reporting requirements based upon their jurisdiction’s regulations which may include preparing consolidated statements of cash flows under GAAP or IFRS standards along with other disclosures related to equity compensation plans adopted by corporations over time which are designed to incentivize employees with ownership interests in their respective firms.