Intermediate Accounting, 11th
Edition by David Spiceland MID
EXAM FULLY SOLVED
2024/2025
Financial Accounting - 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 - 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) - 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) - 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) - 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) - 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 - ANSWER>>>-Provides all the authoritative literature related to a particular topic in
one place
-Topic → subtopics → sections → paragraphs
Major Challenges in Financial Reporting - ANSWER>>>GAAP is as much a product of political action as it
is of careful logic or empirical findings
Measurement Principle - ANSWER>>>Historical cost and fair value
Revenue Recognition Principle - ANSWER>>>Requires companies recognize revenue in the period
performance obligation is satisfied.
Expense Recognition Principle - ANSWER>>>Expenses follows the revenues.
Full Disclosure Principle - 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 - 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 - ANSWER>>>Debits
Expenses
Assets
Dividends declared
Credits
Revenues
Liabilities
Stockholders Equity
Edition by David Spiceland MID
EXAM FULLY SOLVED
2024/2025
Financial Accounting - 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 - 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) - 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) - 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) - 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) - 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 - ANSWER>>>-Provides all the authoritative literature related to a particular topic in
one place
-Topic → subtopics → sections → paragraphs
Major Challenges in Financial Reporting - ANSWER>>>GAAP is as much a product of political action as it
is of careful logic or empirical findings
Measurement Principle - ANSWER>>>Historical cost and fair value
Revenue Recognition Principle - ANSWER>>>Requires companies recognize revenue in the period
performance obligation is satisfied.
Expense Recognition Principle - ANSWER>>>Expenses follows the revenues.
Full Disclosure Principle - 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 - 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 - ANSWER>>>Debits
Expenses
Assets
Dividends declared
Credits
Revenues
Liabilities
Stockholders Equity
