WGU Intermediate Accounting I
Accounting Principles Вoard (APB). - Answer: An accounting rule-making board which provided
official pronouncements, called APB Opinions, from 1959 through 1973.
Accounting Research Bulletins (ARBS). - Answer: Pronouncements issued by CAP dealing with a
variety of timely accounting problems during the years 1939 to 1959.
Accounting Standards Executive Committee (AcSEC) - Answer: The senior technical committee
that was authorized to speak for the AICPA in the area of financial accounting and reporting.
Accounting Standards Updates - Answer: These Updates amend the Accounting Standards
accounting standards, other than standards issued by the Codification, which represents the
source of authoritative SEC
American Institute of Certified Public Accountants (AICPA). - Answer: The national professional
organization of practicing Certified Public Accountants.
APB Opinions. - Answer: The APB's official pronouncements issued from 1959 through 1973
which were intended to be based mainly on research studies and be supported by reasons and
analysis.
The Codification - Answer: Created by the FASB and provides in one place all the authoritative
literature to a particular topic of GAAP
Committee on Accounting Procedure (CAP) - Answer: An organization composed of practicing
CPAS which issued Accounting Research Bulletins dealing with a variety of accounting problems
during the years 1939 to 1959.
Emerging Issues Task Force (EITF). - Answer: Created by the FASB with the purpose of having
members reach a consensus on how to account for new and unusual financial transactions that
have the potential for creating differing financial reporting practices.
,WGU Intermediate Accounting I
Emerging Issues Task Force Statements. - Answer: Pronouncements issued by the EITF which
examine emerging financial reporting issues and state how to account for new and unusual
accounting transactions
Financial Accounting Concepts. - Answer: A series of pronouncements issued by the FASB with
the concepts that the FASB will use in developing future purpose of setting forth fundamental
objectives and standards of financial accounting and reporting.
Financial Accounting Foundation. - Answer: The organization that selects the members of the
FASB and the FASAC, funds their activities, and generally oversees the FASB's activities.
Financial Accounting Interpretations. - Answer: Pronouncements issued by the FASB which
represent modifications or extensions of existing standards.
Financial Accounting Standards. - Answer: Pronouncements issued by the FASB which are
considered generally accepted accounting principles.
Financial Accounting Standards Advisory Council (FASAC) - Answer: A council responsible for
consulting with the FASB on both major policy and technical issues.
Financial Accounting Standards Board (FASB) - Answer: A seven member board created in 1973
which currently establishes and improves standards of financial accounting and reporting for
the guidance and education of the public.
Generally accepted accounting principles (GAAP) - Answer: A common set of standards and
procedures adopted by the accounting profession.
,WGU Intermediate Accounting I
Internal Controls - Answer: A system of checks and balances designed to prevent and detect
fraud and errors.
International Accounting Standards Board (IASB) - Answer: Based in London, it produces the
International Financial Reporting Standards (IFRS).
International Financial Reporting Standards (IFRS) - Answer: Standards created by the London-
based International Accounting Standards Board (IASB) that along with GAAP are accepted for
international use.
Public Company Accounting Oversight Board (PCAOB) - Answer: Established by the Sarbanes-
Oxley Act of 2002 and has auditing, quality control, and independence standards and oversight
and enforcement authority and establishes rules.
Sarbanes-Oxley Act of 2002 - Answer: Passed by Congress in response to accounting scandals
like Enron, Cendant, Sunbeam, Rite-Aid and WorldCom.
Securities and Exchange Commission (SEC). - Answer: An agency of the federal government that
administers the Securities Exchange Act of 1934
Assets. - Answer: Probable future economic benefits obtained or controlled bv a particular
entity as a result of past transactions or events.
Comparability - Answer: Ability to compare accounting information of different companies
because they measure and report information in a similar manner.
Comprehensive income. - Answer: Change in equity (net assets) of an entity during a period
from transactions and other events and circumstances from nonowner sources.
, WGU Intermediate Accounting I
Conceptual framework. - Answer: A coherent system of interrelated objectives and
fundamentals that can lead to consistent standards
Confirmatory value. - Answer: Information that confirms or corrects prior expectations.
Completeness - Answer: All information necessary for faithful representation is provided.
Consistency - Answer: An entity applies the same accounting treatment to similar events from
period to period.
Cost constraint. - Answer: The constraint that states that information should be provided only if
the benefits of providing such information outweigh the costs of providing it.
Economic entity assumption. - Answer: An assumption that states economic activity can be
identified with a particular unit of accountability.
Expense Recognition Principle. - Answer: The recognition of expenses is related to revenues;
"Let the expense follow the revenue."
Equity. - Answer: Residual interest in the assets of an entity that remains after deducting its
liabilities.
Expenses. - Answer: Outflows or other using up of assets or incurrences of liabilities (or a
combination of both) during a period from delivering or producing goods, performing services,
or other activities that constitute the entity's ongoing major or central operations.
Fair value principle - Answer: Defined as "the amount for which an asset could be exchanged, a
liability settled, or an equity instrument granted could be exchanged, between knowledgeable,
willing parties in an arm's length transaction."
Accounting Principles Вoard (APB). - Answer: An accounting rule-making board which provided
official pronouncements, called APB Opinions, from 1959 through 1973.
Accounting Research Bulletins (ARBS). - Answer: Pronouncements issued by CAP dealing with a
variety of timely accounting problems during the years 1939 to 1959.
Accounting Standards Executive Committee (AcSEC) - Answer: The senior technical committee
that was authorized to speak for the AICPA in the area of financial accounting and reporting.
Accounting Standards Updates - Answer: These Updates amend the Accounting Standards
accounting standards, other than standards issued by the Codification, which represents the
source of authoritative SEC
American Institute of Certified Public Accountants (AICPA). - Answer: The national professional
organization of practicing Certified Public Accountants.
APB Opinions. - Answer: The APB's official pronouncements issued from 1959 through 1973
which were intended to be based mainly on research studies and be supported by reasons and
analysis.
The Codification - Answer: Created by the FASB and provides in one place all the authoritative
literature to a particular topic of GAAP
Committee on Accounting Procedure (CAP) - Answer: An organization composed of practicing
CPAS which issued Accounting Research Bulletins dealing with a variety of accounting problems
during the years 1939 to 1959.
Emerging Issues Task Force (EITF). - Answer: Created by the FASB with the purpose of having
members reach a consensus on how to account for new and unusual financial transactions that
have the potential for creating differing financial reporting practices.
,WGU Intermediate Accounting I
Emerging Issues Task Force Statements. - Answer: Pronouncements issued by the EITF which
examine emerging financial reporting issues and state how to account for new and unusual
accounting transactions
Financial Accounting Concepts. - Answer: A series of pronouncements issued by the FASB with
the concepts that the FASB will use in developing future purpose of setting forth fundamental
objectives and standards of financial accounting and reporting.
Financial Accounting Foundation. - Answer: The organization that selects the members of the
FASB and the FASAC, funds their activities, and generally oversees the FASB's activities.
Financial Accounting Interpretations. - Answer: Pronouncements issued by the FASB which
represent modifications or extensions of existing standards.
Financial Accounting Standards. - Answer: Pronouncements issued by the FASB which are
considered generally accepted accounting principles.
Financial Accounting Standards Advisory Council (FASAC) - Answer: A council responsible for
consulting with the FASB on both major policy and technical issues.
Financial Accounting Standards Board (FASB) - Answer: A seven member board created in 1973
which currently establishes and improves standards of financial accounting and reporting for
the guidance and education of the public.
Generally accepted accounting principles (GAAP) - Answer: A common set of standards and
procedures adopted by the accounting profession.
,WGU Intermediate Accounting I
Internal Controls - Answer: A system of checks and balances designed to prevent and detect
fraud and errors.
International Accounting Standards Board (IASB) - Answer: Based in London, it produces the
International Financial Reporting Standards (IFRS).
International Financial Reporting Standards (IFRS) - Answer: Standards created by the London-
based International Accounting Standards Board (IASB) that along with GAAP are accepted for
international use.
Public Company Accounting Oversight Board (PCAOB) - Answer: Established by the Sarbanes-
Oxley Act of 2002 and has auditing, quality control, and independence standards and oversight
and enforcement authority and establishes rules.
Sarbanes-Oxley Act of 2002 - Answer: Passed by Congress in response to accounting scandals
like Enron, Cendant, Sunbeam, Rite-Aid and WorldCom.
Securities and Exchange Commission (SEC). - Answer: An agency of the federal government that
administers the Securities Exchange Act of 1934
Assets. - Answer: Probable future economic benefits obtained or controlled bv a particular
entity as a result of past transactions or events.
Comparability - Answer: Ability to compare accounting information of different companies
because they measure and report information in a similar manner.
Comprehensive income. - Answer: Change in equity (net assets) of an entity during a period
from transactions and other events and circumstances from nonowner sources.
, WGU Intermediate Accounting I
Conceptual framework. - Answer: A coherent system of interrelated objectives and
fundamentals that can lead to consistent standards
Confirmatory value. - Answer: Information that confirms or corrects prior expectations.
Completeness - Answer: All information necessary for faithful representation is provided.
Consistency - Answer: An entity applies the same accounting treatment to similar events from
period to period.
Cost constraint. - Answer: The constraint that states that information should be provided only if
the benefits of providing such information outweigh the costs of providing it.
Economic entity assumption. - Answer: An assumption that states economic activity can be
identified with a particular unit of accountability.
Expense Recognition Principle. - Answer: The recognition of expenses is related to revenues;
"Let the expense follow the revenue."
Equity. - Answer: Residual interest in the assets of an entity that remains after deducting its
liabilities.
Expenses. - Answer: Outflows or other using up of assets or incurrences of liabilities (or a
combination of both) during a period from delivering or producing goods, performing services,
or other activities that constitute the entity's ongoing major or central operations.
Fair value principle - Answer: Defined as "the amount for which an asset could be exchanged, a
liability settled, or an equity instrument granted could be exchanged, between knowledgeable,
willing parties in an arm's length transaction."
