Exam 1: Introduction to Financial Reporting

Match the letter of each principle or assumption or qualitative characteristic with the appropriate statement. -A reasonable summarization of financial information is required.

The comment that "items that are not material may be recorded in the financial statements in the most economical and expedient manner possible" is representative of:

Match the letter of each phrase with the appropriate definition. -A task force of representatives from the accounting profession created by the FASB to deal with emerging issues of financial reporting.

Match the letter of each Concept Statement with the Concept Statement title. -Elements of Financial Statements of Business Enterprises

Match the letter of each element with the appropriate definition. -Probable 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.

All but one of the following statements indicates a difference between the Financial Accounting Standards Board (FASB)and prior approaches.Select the one that is not a difference.

Some firms question the costs/benefits of implementing Sarbanes-Oxley.

Accounting standards codification ^TM reorganizes the accounting pronouncements into approximately 90 accounting topics.

Accountants provide for inflation using which of the following accounting principles?

The accrual basis of accounting recognizes revenue when realized (realization concept)and expenses when incurred (matching concept).

Timeliness is a pervasive constraint imposed upon financial accounting information.

Understating expenses is justified based on:

Match the letter of each element with the appropriate definition. -Increases in the equity of a particular business enterprise resulting from transfers to the enterprise from other entities of something of value to obtain or increase ownership interests (or equity)in it.

The following data relate to Swift Company for the year ended December 31,2012.Swift Company uses the accrual basis. Sales on credit \2 50,000 Cost of inventory sold on credit 170,000 Collections from customers 220,000 Purchase of inventory on credit 150,000 Payment for purchases 140,000 Selling expenses (accrual basis) 40,000 Payment for selling expenses 45,0000 Which of the following amounts represents income for Swift Company for the year ended December 31,2012?

The Statements of Financial Accounting Concepts are intended to provide the Financial Accounting Standards Board with a common foundation and the basic underlying reasoning on which to consider the merits of various alternative accounting principles.

Valuing inventory at the lower of cost or market is an application of the:

The accountant records only the events that affect the financial position of the entity and that can be reasonably determined in monetary terms.

Match the letter of each principle or assumption or qualitative characteristic with the appropriate statement. -The decision is made to accept some inaccuracy because of incomplete information about the future in exchange for more timely reporting.

Match the letter of each principle or assumption or qualitative characteristic with the appropriate statement. -Involves the relative size and importance of an item to a firm.

In order to determine the economic success of a grocery store,we should view it as separate from the other resources that are owned by this individual.