Exam 3: Judgment and Applied Financial Accounting Research

In addition to disclosing judgments involving estimates and assumptions,________ requires that companies disclose judgments made when determining appropriate accounting treatments.

In the Accounting Standards Codification,the sub-topic numbers under each topic are uniform throughout the Codification.

The final step in the accounting research process is to develop conclusions.

Identify the level of the U.S.GAAP Literature Hierarchy that each item belongs to.

Airlines Insider is a well-respected publication for the airline industry.The publication prescribes a certain accounting treatment which differs from what is indicated in the Codification.How should this be handled?

Your classmate,Marla Smith,tells you that she likes accounting because it provides a clear cut set of methods and rules to follow.As a result it should be an easy job to get the hang of.Explain to her why accountants frequently need to use their judgment.Give specific examples.

In step five of the financial accounting research process,the accountant will ________.

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

Complete the following table.Provide a brief description of the literature included for each level of the IFRS Literature Hierarchy.

Management is afforded a certain amount of latitude and must exercise judgment when selecting accounting methods.Discuss why this could be problematic for users of financial statements.Provide examples.

Earnings management occurs when managers manipulate financial information and misrepresent the firm's financial position.

What is the Codification topic number and the International Accounting Standards number in which you would begin your research into a question about revenue recognition?

The first step in the accounting research process is to establish and understand the facts.

List five issues that are typically addressed in a company's accounting policy footnote.

Briefly explain how IFRS disclosures about accounting-related issues differ from U.S.GAAP disclosures.

Complete the following table.Identify the bias indicated in the definition.

An example of a judgment in accounting for product warranties is ________.

You are the new accountant for Crazy Caesar's 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.

The footnote outlining the portfolio of accounting choices is one of the first footnotes in the financial statements.

What prompted the development of the Accounting Standards Codification?