Solution Manual for Financial Statement Analysis, 13th Edition By Charles H. Gibson

SolutionpoManualpoForpoFinancialpoStatementpoAnalysis,
13th Edition
po



BypoCharlespoH.poGibson,poVerifiedpoChapter'spo1po-po13po|poComplete

, Chapter 1 Introduct l l



ion
ll l l to l l Financial Reporting l l




QUESTIONS

1- 1. ll a.
The AICPA is an organization of CPAs that prior to
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l l 1973 ac cepted the primary responsibility for the l l ll l l l l l l l l l l



l l development of generall y accepted accounting principles. l l l l ll l l l l l l



l l Their role was substantially re duced in 1973 when the
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l l Financial Accounting Standards Board was established. l l l l l l ll l l



Their role was further reduced with the l l l l l l l l l l l l



l l esta blishment of the Public Company Accounting
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l l Oversight Board w as established in 2002. l l l l ll l l l l l l




b. The Financial Accounting Standards Board replaced
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lthe Acc ounting Principles Board as the primary
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lrule- l



making body for accounting standards. It is an l l l l l l l l l l l l l l



independent organization and includes members other
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than public acco
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untants.

c.
The SEC has the authority to determine generally l l l l l l l l l l l l l l



accepted a ccounting principles and to regulate the
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accounting profession. The SEC has elected to leave
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much of the determination of generally accepted l l l l l l l l l l l l l l



accounting principles to the private sector. l l l l l l l l l l l l



The Financial Accounting Standards Board has played l l l l l l l l l l l l



lthe major role in establishing accounting standards since
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l1973. l R
egulation of the accounting profession was substantially
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lturned over to the Public Company Accounting Oversight
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lBoard in 2 002.
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1-
l 2.l Consistency is obtained through the application of the same a ccounting ll ll ll ll ll ll ll ll ll ll



lprinciple from period to period.
l A change in principl
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e requires statement disclosure.
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1-
l 3.l The concept of historical cost determines the balance sheet
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lvaluatio n of land. The realization concept requires that a
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ltransaction needs to occur for the profit to be recognized.
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1- 4. a. Entity e. Historical l l cost

b. Realization f. Historical l l cost

,c. Materiality g. Disclosure

, d. Conservatism

1-
ll l l 5. Entity concept
l l