ACCT 5110 exam pack

Role of financial accounting - ANSto identify, measure, and report relevant and reliable financial information about companies to present and potential future stakeholders Who are stakeholders? - ANSStakeholders are parties with an interest in a company and are impacted by companies decision. ...

Intangible assets desire their value from the right (claim) to receive cash in the future - t/f - ANSFalse Internally generated intangible assets are initially recorded at fair value - t/f - ANSFalse Limited-life intangibles are amortized by systematic charges to expense over their useful li...

Cash - Substantive - ANSReceipt of bank confirmations ◦ Not required for non-public entity audits; however, auditors usually obtain a direct receipt of a confirmation from every bank or other financial institutions ◦ Confirms usually verify loan information on the same form ◦ After auditor...

Role of financial accounting - ANSto identify, measure, and report relevant and reliable financial information about companies to present and potential future stakeholders Who are stakeholders? - ANSStakeholders are parties with an interest in a company and are impacted by companies decision. ...

Companies' motivations for investing in debt or equity securities issued by other companies: - ANS1) To earn a high rate of return 2) To secure certain operating or financing arrangements with another company How to provide useful information - ANSCompanies account for investment based on the...

Funds a company receives from shareholders are often called: Paid-in capital Net income Dividends Retained earnings - ANSPaid-in capital The Securities and Exchange Commission creates accounting standards. T/F - ANSFalse Privately held companies must produce financial statements that c...

After formulating a strategic plan, a company will engage in what three types of activities? - ANSFinancing, investing, and operating What is Financial Reporting? - ANSThe process of communicating financial accounting information to existing and potential investors, creditors, lenders, and othe...

An accrued expense is an expense - ANSincurred but not paid Recognition - ANSthe process of formally recording and reporting an item in the financial statements of a company To be relevant an earnings report is expected to have - ANSpredictive and confirmatory value Conservatism - ANSac...

Cash - Substantive - ANSReceipt of bank confirmations ◦ Not required for non-public entity audits; however, auditors usually obtain a direct receipt of a confirmation from every bank or other financial institutions ◦ Confirms usually verify loan information on the same form ◦ After auditor...