Intermediate Accounting Questions And Answers 2025/2026
Financial Accounting - CORRECT ANSWER-*The process that culminates in the
preparation of financial reports on the enterprise for use by both internal and
external parties.
Objective of Financial Reporting - CORRECT ANSWER-Provide information about
the reporting entity that is useful to present and potential to equity investors,
lenders, and others.
Securities and Exchange Commission (SEC) - CORRECT ANSWER--Federal agency
developed to help develop and standardize financial information presented to
stockholders
-Companies that issue securities to public are required to file with SEC
-Have powers to prescribe auditing practices and standards to be employed by
companies that fall within its jurisdiction
-Requires registrants to adhere to GAAP
-Relies on FASB to develop accounting standards
-Mission to protect investors, maintain fair, orderly, and efficient markets, and
facilitate capital formation
-Regulations require filing of annual (10-K) & quarterly (10-Q) reports and others
-Enforcement authority
,American Institute of CPAs (AICPA) - CORRECT ANSWER--National professional org
of CPAs
-Important to development of GAAP
-Established the Committee on Accounting Procedure (CAP) → Accounting
Principles Board (APB) → FASB
Financial Accounting Standards Board (FASB) - CORRECT ANSWER--Major
organization of the standard-setting structure for financial accounting
-Wants to establish and improve standards of financial accounting and reporting
for the guidance and education of the public
-Accounting guidance issued by FASB is considered GAAP
-Issues: Accounting standards updates & financial accounting concepts
Generally Accepted Accounting Principles (GAAP) - CORRECT ANSWER-common
set of accounting standards and procedures for which either an authoritative
accounting rule making body has established a principle of reporting in a given
area, or over time, a given practice has been accepted as appropriate because of
its universal application
FASB Codification - CORRECT ANSWER--Provides all the authoritative literature
related to a particular topic in one place
-Topic → subtopics → sections → paragraphs
Major Challenges in Financial Reporting - CORRECT ANSWER-GAAP is as much a
product of political action as it is of careful logic or empirical findings
, Measurement Principle - CORRECT ANSWER-Historical cost and fair value
Revenue Recognition Principle - CORRECT ANSWER-Requires companies recognize
revenue in the period performance obligation is satisfied.
Expense Recognition Principle - CORRECT ANSWER-Expenses follows the
revenues.
Full Disclosure Principle - CORRECT ANSWER-Providing information that is of
sufficient importance to influence the judgement and decisions of an informed
user (financial statements, notes to the statements, supplementary information).
Two Perspectives of Time - CORRECT ANSWER-1. Date (point in time): "as of";
balance sheet
2. Time between two dates (period): "for the year ended"; income statement,
cash flow
DEAD CRLS - CORRECT ANSWER-Debits
Expenses
Assets
Dividends declared
Credits
Revenues
Financial Accounting - CORRECT ANSWER-*The process that culminates in the
preparation of financial reports on the enterprise for use by both internal and
external parties.
Objective of Financial Reporting - CORRECT ANSWER-Provide information about
the reporting entity that is useful to present and potential to equity investors,
lenders, and others.
Securities and Exchange Commission (SEC) - CORRECT ANSWER--Federal agency
developed to help develop and standardize financial information presented to
stockholders
-Companies that issue securities to public are required to file with SEC
-Have powers to prescribe auditing practices and standards to be employed by
companies that fall within its jurisdiction
-Requires registrants to adhere to GAAP
-Relies on FASB to develop accounting standards
-Mission to protect investors, maintain fair, orderly, and efficient markets, and
facilitate capital formation
-Regulations require filing of annual (10-K) & quarterly (10-Q) reports and others
-Enforcement authority
,American Institute of CPAs (AICPA) - CORRECT ANSWER--National professional org
of CPAs
-Important to development of GAAP
-Established the Committee on Accounting Procedure (CAP) → Accounting
Principles Board (APB) → FASB
Financial Accounting Standards Board (FASB) - CORRECT ANSWER--Major
organization of the standard-setting structure for financial accounting
-Wants to establish and improve standards of financial accounting and reporting
for the guidance and education of the public
-Accounting guidance issued by FASB is considered GAAP
-Issues: Accounting standards updates & financial accounting concepts
Generally Accepted Accounting Principles (GAAP) - CORRECT ANSWER-common
set of accounting standards and procedures for which either an authoritative
accounting rule making body has established a principle of reporting in a given
area, or over time, a given practice has been accepted as appropriate because of
its universal application
FASB Codification - CORRECT ANSWER--Provides all the authoritative literature
related to a particular topic in one place
-Topic → subtopics → sections → paragraphs
Major Challenges in Financial Reporting - CORRECT ANSWER-GAAP is as much a
product of political action as it is of careful logic or empirical findings
, Measurement Principle - CORRECT ANSWER-Historical cost and fair value
Revenue Recognition Principle - CORRECT ANSWER-Requires companies recognize
revenue in the period performance obligation is satisfied.
Expense Recognition Principle - CORRECT ANSWER-Expenses follows the
revenues.
Full Disclosure Principle - CORRECT ANSWER-Providing information that is of
sufficient importance to influence the judgement and decisions of an informed
user (financial statements, notes to the statements, supplementary information).
Two Perspectives of Time - CORRECT ANSWER-1. Date (point in time): "as of";
balance sheet
2. Time between two dates (period): "for the year ended"; income statement,
cash flow
DEAD CRLS - CORRECT ANSWER-Debits
Expenses
Assets
Dividends declared
Credits
Revenues
