Exam 1: Environment and Theoretical Structure of Financial Accounting

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Accounting Principles Board

What are the key provisions of the Public Company Accounting Reform and Investor Protection (Sarbanes-Oxley) Act of 2002?

Gains are:

The FASB's conceptual framework's qualitative characteristics of accounting information include:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Materiality

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Faithful representation

Of the following, the most important objective for financial reporting is to provide information useful for:

-Compute net income for the first year for Alpaca Corporation.

-Compute the cash balance at the end of the first year for Alpaca Corporation.

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Losses

What is the EITF and what is its purpose?

For each of the following situations, state whether you agree or disagree with the financial reporting practice employed, and briefly explain the reason for your answer. 1. Cantor Corporation's accountant increased the book value of a patent from its original cost of $1 million to its recently appraised value of $6 million. 2. Stanton Corporation paid for the personal travel of its chief financial officer and charged travel expense. 3. At the end of its 2018 fiscal year, Dower, Inc., received an order from a customer for $60,000. The merchandise will ship early in 2019. Because the sale was made to a long-time customer and the invoice was paid in 2018, the controller recorded the sale in 2018. 4. In the middle of its 2018 fiscal year, Sanguinetti, Inc. paid $12,000 to its insurance company for one-year comprehensive insurance coverage. Sanguinetti recorded the entire expenditure as an expense in 2018. 5. The Churchill Pharmaceutical Company included a note in its financial statements that described a pending lawsuit against the company. 6. The Daily Corporation, a company whose securities are publicly traded, prepares monthly, quarterly, and annual financial statements for internal use but disseminates to external users only the annual financial statements.

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Revenue recognition

The monetary unit assumption requires that items in financial statements be measured in a particular monetary unit.

The Public Reform and Investor Protection Act of 2002 (Sarbanes-Oxley) changed the entity responsible for setting auditing standards in the United States.

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Assets

The most recent example of the political process at work in standard-setting is the heated debate that occurred on the issue of:

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Gains

The primary function of financial accounting is to provide relevant financial information to parties external to business enterprises.

Contrast the asset/liability and revenue/expense approaches to accounting standard setting.