Exam 1: Environment and Theoretical Structure of Financial Accounting

The enhancing qualitative characteristic of understandability means that information should be understood by:

What is the EITF and what is its purpose?

Enhancing qualitative characteristics of accounting information include:

Gains are:

Four different competent accountants independently agree on the amount and method of reporting an economic event. The concept demonstrated is:

The FASB's framework for measuring fair value doesn't change the situations in which fair value is used under current GAAP.

The funding of the standard-setting bodies that promulgate IFRS is as independent as that underlying U.S. GAAP.

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

With respect to the financial statements, what is the value of an audit?

In the United States the conceptual framework indicates GAAP when a more specific accounting standard does not apply.

What provisions did the Public Company Accounting Reform and Investor Protection (Sarbanes-Oxley) Act of 2002 make for performance of nonaudit services by an audit firm?

Accrual accounting attempts to measure revenues and expenses that occurred during accounting periods so they equal net operating cash flow.

Change in equity from nonowner sources is:

The revenue/expense approach emphasizes:

Revenues are inflows or other enhancements of assets or settlements of liabilities from activities that constitute the entity's ongoing operations.