INTERMEDIATE ACCOUNTING BY KIESO
COMPREHENSIVE SOLVED QUESTIONS AND
COMPLETE ANSWERS
◉ 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
◉ Owners Equity is made up of ....
Answer: -Net contributed capital: accumulated capital contributed
to the firm by owners to repurchase shares since inception
-Retained earnings: accumulated earnings of the firm less
accumulated dividend payments since inception
◉ Steps in the Accounting Cycle.
Answer: 1. Record and post basic "transactions"
COMPREHENSIVE SOLVED QUESTIONS AND
COMPLETE ANSWERS
◉ 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
◉ Owners Equity is made up of ....
Answer: -Net contributed capital: accumulated capital contributed
to the firm by owners to repurchase shares since inception
-Retained earnings: accumulated earnings of the firm less
accumulated dividend payments since inception
◉ Steps in the Accounting Cycle.
Answer: 1. Record and post basic "transactions"
