ACCOUNTING CRASH COURSE Final EXAM
BANK LATEST FROM WALL STREET PREP
(WSP) TESTING VERSIONS AND A STUDY GUIDE
| WSP ACCOUNTING CRASHCOURSE LATEST
EXAM/ WALLSTREET PREP EXPERT VERIFIED
FOR GUARANTEED PASS!!
Accounting is important for - ANSWER ✓ firm's officers,
investors, lenders, and the general public
Generally Accepted Accounting Principles (GAAP) - ANSWER
✓ a set of accounting standards that is used in the preparation
of financial statements
Securities and Exchange Commission (SEC) - ANSWER ✓ -
division of corporate finance: oversees financial reporting by
corporations
Financial Accounting Standards Board (FASB) - ANSWER ✓
Types of pronouncements:
-Statements of Financial Accounting Standards
-Interpretations
,-Financial Accounting Concepts
-Emerging Issues Task Force Statements
International Financial Reporting Standards (IFRS) - ANSWER
✓ unified set of international accounting standards
Assumption 1: Accounting Entity - ANSWER ✓ -a company is
considered a separate "living" enterprise apart from its owners
-it is engaged in clearly-defined activities
-regularly reports its financial health to the general publics
-pays taxes and can file lawsuits
Assumption 2: Going Concern - ANSWER ✓ -a corporation is
assumed to remain in existence indefinitely
-assets and liabilities are recognized values that assume the
company will not have to sell them at liquidation
Assumption 3: Measurement - ANSWER ✓ -financial
statements must be reported in the national monetary unit
-can only show measurable activities of a corporation
, Assumption 4: Periodicity - ANSWER ✓ -companies are
required to file annual and interim reports
-a fiscal year is frequently but not always aligned with the
calendar year
Principle 1: Historical Cost - ANSWER ✓ -financial
statements report companies' resources at an initial historical
cost
-represents the easiest measurement method without a need a for
appraisal and revaluation
-minimized management discretion and subjectivity
-IFRS is more willing to allow this subjectivity to avoid
misrepresenting the true value of assets
Principle 2: Revenue Recognition - ANSWER ✓ accrual basis
of accounting dictates that revenues must be recorded when
earned and measurable
-cannot be recorded until the order is shipped to a customer and
collection from that customer (who uses a credit card) is
reasonably assured
Principle 3: Matching Principle - ANSWER ✓ costs associated
with making a product must be recorded during the same period
as revenue generated from that product
, Principle 4: Full Disclosure - ANSWER ✓ companies must
reveal all relevant economic information that they determine to
make a difference to its users
-should be accomplished in: financial statements, notes to
financial statements, and supplementary information
Contraint 1: Estimates & Judgements - ANSWER ✓ certain
measurements cannot be performed completely accurately and
must therefore utilize conservative estimates and judgements
Constraint 2: Materiality - ANSWER ✓ inclusion and
disclosure of financial transactions in financial statements hinge
on their size and effect on the company performing them
-materiality varies across different entities
Constraint 3: Consistency - ANSWER ✓ for each company,
the preparation financial statements must utilize measurement
techniques and assumptions which are consistent from one
period to another
Constraint 4: Conservatism - ANSWER ✓ financial statements
should be prepared with a downward measurement bias
BANK LATEST FROM WALL STREET PREP
(WSP) TESTING VERSIONS AND A STUDY GUIDE
| WSP ACCOUNTING CRASHCOURSE LATEST
EXAM/ WALLSTREET PREP EXPERT VERIFIED
FOR GUARANTEED PASS!!
Accounting is important for - ANSWER ✓ firm's officers,
investors, lenders, and the general public
Generally Accepted Accounting Principles (GAAP) - ANSWER
✓ a set of accounting standards that is used in the preparation
of financial statements
Securities and Exchange Commission (SEC) - ANSWER ✓ -
division of corporate finance: oversees financial reporting by
corporations
Financial Accounting Standards Board (FASB) - ANSWER ✓
Types of pronouncements:
-Statements of Financial Accounting Standards
-Interpretations
,-Financial Accounting Concepts
-Emerging Issues Task Force Statements
International Financial Reporting Standards (IFRS) - ANSWER
✓ unified set of international accounting standards
Assumption 1: Accounting Entity - ANSWER ✓ -a company is
considered a separate "living" enterprise apart from its owners
-it is engaged in clearly-defined activities
-regularly reports its financial health to the general publics
-pays taxes and can file lawsuits
Assumption 2: Going Concern - ANSWER ✓ -a corporation is
assumed to remain in existence indefinitely
-assets and liabilities are recognized values that assume the
company will not have to sell them at liquidation
Assumption 3: Measurement - ANSWER ✓ -financial
statements must be reported in the national monetary unit
-can only show measurable activities of a corporation
, Assumption 4: Periodicity - ANSWER ✓ -companies are
required to file annual and interim reports
-a fiscal year is frequently but not always aligned with the
calendar year
Principle 1: Historical Cost - ANSWER ✓ -financial
statements report companies' resources at an initial historical
cost
-represents the easiest measurement method without a need a for
appraisal and revaluation
-minimized management discretion and subjectivity
-IFRS is more willing to allow this subjectivity to avoid
misrepresenting the true value of assets
Principle 2: Revenue Recognition - ANSWER ✓ accrual basis
of accounting dictates that revenues must be recorded when
earned and measurable
-cannot be recorded until the order is shipped to a customer and
collection from that customer (who uses a credit card) is
reasonably assured
Principle 3: Matching Principle - ANSWER ✓ costs associated
with making a product must be recorded during the same period
as revenue generated from that product
, Principle 4: Full Disclosure - ANSWER ✓ companies must
reveal all relevant economic information that they determine to
make a difference to its users
-should be accomplished in: financial statements, notes to
financial statements, and supplementary information
Contraint 1: Estimates & Judgements - ANSWER ✓ certain
measurements cannot be performed completely accurately and
must therefore utilize conservative estimates and judgements
Constraint 2: Materiality - ANSWER ✓ inclusion and
disclosure of financial transactions in financial statements hinge
on their size and effect on the company performing them
-materiality varies across different entities
Constraint 3: Consistency - ANSWER ✓ for each company,
the preparation financial statements must utilize measurement
techniques and assumptions which are consistent from one
period to another
Constraint 4: Conservatism - ANSWER ✓ financial statements
should be prepared with a downward measurement bias
