Intermediate Accounting Exam #1
MEASUREMENT*** - ANS-amount to be recognized.
5 ways
1. historical cost
2. net realizable value
3. current cost
4. present/discounted slue of future cash flows
5. fair value
\1st levee of framework - ANS-objective: to provide financial information useful to capital
providers
\2nd level of framework - ANS-qualitative characteristics, elements
\3rd level of framework - ANS-constraints, assumptions, principles (CAP)
\4 underlying assumptions - ANS-economic entity, going concern, monetary unit, periodicity
\assets - ANS-probable future economic benefits obtained or controlled by a particular entity as
a result of past transactions or events
\comparability and consistency - ANS-important for making interfirm comparisons
applying the same accounting practices overtime
\completeness - ANS-contains all necessary information
\comprehensive income - ANS-change in business equity during a period from transactions and
other events/circumstances from non owner sources. all changes in equity in period except
those resulting from investments by/distributions to owners
\conceptual framework - ANS-underlying structure for the development of accounting standards
\confirmatory value - ANS-info confirms expectations
\conservatism - ANS-accountants require greater verification before recognizing good news
than bad news
\constraints - ANS-cost-benefit, materiality, conservatism
\cost-benefit - ANS-requires consideration of the costs and value of information
\current cost - ANS-cost that would be incurred to purchase or reproduce the goods
\distribution to owners - ANS-decreases in equity from transfers to owners
\economic entity - ANS-economic events can be identified with an economic entity
\elements of financial statements - ANS-building blocks with which financial statements are
constructed
\enhancing qualitative characteristics - ANS-comparability, verifiability, timeliness and
understandability
\equity - ANS-(net assets)
called shareholders equity or stockholders equity for corporations. its the residual interest in the
assets of an entity that remains after deducting its liabilities
\expense recognition: matching principle - ANS--cause and effect relationship between revenue
and its expense
MEASUREMENT*** - ANS-amount to be recognized.
5 ways
1. historical cost
2. net realizable value
3. current cost
4. present/discounted slue of future cash flows
5. fair value
\1st levee of framework - ANS-objective: to provide financial information useful to capital
providers
\2nd level of framework - ANS-qualitative characteristics, elements
\3rd level of framework - ANS-constraints, assumptions, principles (CAP)
\4 underlying assumptions - ANS-economic entity, going concern, monetary unit, periodicity
\assets - ANS-probable future economic benefits obtained or controlled by a particular entity as
a result of past transactions or events
\comparability and consistency - ANS-important for making interfirm comparisons
applying the same accounting practices overtime
\completeness - ANS-contains all necessary information
\comprehensive income - ANS-change in business equity during a period from transactions and
other events/circumstances from non owner sources. all changes in equity in period except
those resulting from investments by/distributions to owners
\conceptual framework - ANS-underlying structure for the development of accounting standards
\confirmatory value - ANS-info confirms expectations
\conservatism - ANS-accountants require greater verification before recognizing good news
than bad news
\constraints - ANS-cost-benefit, materiality, conservatism
\cost-benefit - ANS-requires consideration of the costs and value of information
\current cost - ANS-cost that would be incurred to purchase or reproduce the goods
\distribution to owners - ANS-decreases in equity from transfers to owners
\economic entity - ANS-economic events can be identified with an economic entity
\elements of financial statements - ANS-building blocks with which financial statements are
constructed
\enhancing qualitative characteristics - ANS-comparability, verifiability, timeliness and
understandability
\equity - ANS-(net assets)
called shareholders equity or stockholders equity for corporations. its the residual interest in the
assets of an entity that remains after deducting its liabilities
\expense recognition: matching principle - ANS--cause and effect relationship between revenue
and its expense
