SolutionpoManualpoForpoFinancialpoStatementpoAnalysis,
13th Edition
po
BypoCharlespoH.poGibson,poVerifiedpoChapter'spo1po-po13po|poComplete
, Chapter 1
s s Introduct ion to ss
Financial Reporting
QUESTIONS
1-1.
s a.
The AICPA is an organization of CPAs that prior to s s
1973 ac cepted the primary responsibility for the
ss ss s
development of generall y accepted accounting principles.
ss ss ss
Their role was substantially re duced in 1973 when the
ss s s ss s
Financial Accounting Standards Board was established.
ss ss s
Their role was further reduced with the s
esta blishment of the Public Company Accounting
ss ss
Oversight Board w as established in 2002.
ss ss
b. The Financial Accounting Standards Board replaced
the Acc ounting Principles Board as the primary
ss ss s
rule-
ss
making body for accounting standards. It is an
independent organization and includes members other
ss ss
than public acco
ss
untants.
c. The SEC has the authority to determine generally
accepted a ccounting principles and to regulate the
ss ss s s
accounting profession. The SEC has elected to leave
ss s ss s
much of the determination of generally accepted
ss s
accounting principles to the private sector. ss
The Financial Accounting Standards Board has played
the major role in establishing accounting standards since
ss ss
1973.
ss R
egulation of the accounting profession was substantially
turned over to the Public Company Accounting Oversight
ss ss
Board in 2 002.
ss s s
1-
2. Consistency is obtained through the application of the same a
ss ss ss ss ss ss ss ss ss
ccounting principle
ss from period ssto period. A
changein principl
e requires statement disclosure.
1-
3. The concept
s s of s s historical cost determines the
s s s s s s s s s s s s s s s s s s s s s s
balance
s s sheet valuatio n of land.
s s The s s realization ss ss s s s s s s s s
s concept
s requires that a transaction
s s needs to occur s s s s ss s s s s ss s s s s
s for s sthes profit s to
s be s recognized.
s s s s s s s s s s s s s s s s s
1- 4. a. Entity e. Historical cost
,b. Realization f. Historical cost
, c. Materiality g. Disclosure
13th Edition
po
BypoCharlespoH.poGibson,poVerifiedpoChapter'spo1po-po13po|poComplete
, Chapter 1
s s Introduct ion to ss
Financial Reporting
QUESTIONS
1-1.
s a.
The AICPA is an organization of CPAs that prior to s s
1973 ac cepted the primary responsibility for the
ss ss s
development of generall y accepted accounting principles.
ss ss ss
Their role was substantially re duced in 1973 when the
ss s s ss s
Financial Accounting Standards Board was established.
ss ss s
Their role was further reduced with the s
esta blishment of the Public Company Accounting
ss ss
Oversight Board w as established in 2002.
ss ss
b. The Financial Accounting Standards Board replaced
the Acc ounting Principles Board as the primary
ss ss s
rule-
ss
making body for accounting standards. It is an
independent organization and includes members other
ss ss
than public acco
ss
untants.
c. The SEC has the authority to determine generally
accepted a ccounting principles and to regulate the
ss ss s s
accounting profession. The SEC has elected to leave
ss s ss s
much of the determination of generally accepted
ss s
accounting principles to the private sector. ss
The Financial Accounting Standards Board has played
the major role in establishing accounting standards since
ss ss
1973.
ss R
egulation of the accounting profession was substantially
turned over to the Public Company Accounting Oversight
ss ss
Board in 2 002.
ss s s
1-
2. Consistency is obtained through the application of the same a
ss ss ss ss ss ss ss ss ss
ccounting principle
ss from period ssto period. A
changein principl
e requires statement disclosure.
1-
3. The concept
s s of s s historical cost determines the
s s s s s s s s s s s s s s s s s s s s s s
balance
s s sheet valuatio n of land.
s s The s s realization ss ss s s s s s s s s
s concept
s requires that a transaction
s s needs to occur s s s s ss s s s s ss s s s s
s for s sthes profit s to
s be s recognized.
s s s s s s s s s s s s s s s s s
1- 4. a. Entity e. Historical cost
,b. Realization f. Historical cost
, c. Materiality g. Disclosure
