Exam 3: Judgment and Applied Financial Accounting Research

When establishing and understanding the facts of an accounting research project, what questions should the researcher initially ask?

Give two examples of when accountants use estimates to derive the reported values of assets and briefly explain how those estimates are derived.

The Basis for Conclusions for pronouncements under U.S. GAAP are ________.

The first step in the accounting research process is to identify the issue.

Ann Byer is a first-year accountant who always did well academically. She is asked by her employer to estimate the amount of the accounts receivable balance that might not be paid by the customers. Although she remembers discussing the concept, she cannot quite remember how to go about estimating the amount. She does what she thinks is correct without double-checking. After all, she always received "A"s in class so she must be correct. What type of bias is represented in the above scenario?

You are the new accountant for Apple of my Eye Computer store. The company sells computers and computer-related accessories. Additionally, the company sells extended warranties for the computers. Because the extended warranties are a significant profit center for the company, salespeople are encouraged to promote the extended warranties. In return they receive a 35% commission on all warranties that they sell. You have never encountered commission sales before, so you will need to research this topic. Complete the first two steps of the research process based on the information provided in this problem.

An accountant may find that there is no single correct answer to his or her research question in the accounting literature.

Step 3 in the financial accounting research process involves ________.

The second step in the applied financial accounting research process is to ________.

Numerical references to the Accounting Standards Codification are structured as Topic-Subtopic-Section-Paragraph.

When accountants use judgment to interpret standards, it often detracts from the usefulness of the financial statements.

A statement that a company reported inventory at the lower-of-cost-or-market and valued inventory using the first-in, first-out method would be found ________.

Complete the following table. Give a definition and example of each of the cognitive biases listed (be original). Cognitive Bias Definition and Example anchoring bias overconfidence bias Confirmatory bias availability bias groupthink bias

Complete the following table. Provide a brief description of the literature included for each level of the IFRS Literature Hierarchy. Level Brief description Level 1 Level 2 Level 3 Level 4

In ASC 450-20-35-2, 35 represents the ________.

The highest level of authoritative guidance for U.S. GAAP is the Accounting Standards Codification.

Numerical references to the Accounting Standards Codification are structured as Section-Paragraph-Topic-Subtopic.

You've been assigned to write a research paper for your Intermediate Accounting class. You have been assigned "fair value measurements" and are supposed to begin your research in the Codification. In which topic grouping would you begin?

Why would an accountant engage in financial accounting research?

________ is the systematic investigation into an issue.