Podcast
Questions and Answers
What is the primary role of the Financial Accounting Standards Board (FASB)?
What is the primary role of the Financial Accounting Standards Board (FASB)?
Which of the following options represents a guideline formulated by the FASB?
Which of the following options represents a guideline formulated by the FASB?
What does the Going Concern Assumption imply about an entity?
What does the Going Concern Assumption imply about an entity?
Which principle states that assets should be recorded at their actual cost?
Which principle states that assets should be recorded at their actual cost?
Signup and view all the answers
Which type of business structure is characterized by a single owner?
Which type of business structure is characterized by a single owner?
Signup and view all the answers
What does the Audit process involve?
What does the Audit process involve?
Signup and view all the answers
What does the Monetary Unit Assumption require regarding financial statements?
What does the Monetary Unit Assumption require regarding financial statements?
Signup and view all the answers
What legislation requires companies to take responsibility for the accuracy of their financial reports?
What legislation requires companies to take responsibility for the accuracy of their financial reports?
Signup and view all the answers
Study Notes
Governing Organizations and Standards in Accounting
- Financial Accounting Standards Board (FASB): Private body responsible for developing and governing accounting standards in the U.S.
- Securities and Exchange Commission (SEC): U.S. government agency that oversees the financial markets and protects investors.
- Generally Accepted Accounting Principles (GAAP): Comprehensive guidelines for accounting established by FASB, serving as the primary accounting framework in the U.S.
- International Financial Reporting Standards (IFRS): An international set of accounting guidelines created by the International Accounting Standards Board (IASB), aimed at providing consistency across global financial reporting.
- International Accounting Standards Board (IASB): A private organization responsible for the development and governance of IFRS.
Key Accounting Principles and Concepts
- Economic Entity Assumption: Concept that dictates a business is treated as a separate unit from its owners or other businesses.
- Cost Principle: Accounting principle stating that assets and services should be recorded at their actual cost at acquisition.
- Going Concern Assumption: Presumption that an entity will continue its operations indefinitely and will not liquidate in the near future.
- Monetary Unit Assumption: Requirement that all financial statement items are expressed in a stable monetary unit, facilitating measurement and comparison.
Business Structures
- Sole Proprietorship: A business owned and managed by a single individual, bearing all the risks and rewards.
- Partnership: A business entity owned by two or more individuals who share management and profits, not set up as a corporation.
- Corporation: A legally distinct entity from its owners, created under state law, providing limited liability to its shareholders.
- Limited-Liability Company (LLC): A hybrid business structure where owners have limited liability for company debts, protecting personal assets.
Regulatory Framework and Compliance
- Audit: Process of reviewing a company's financial statements and records to ensure accuracy and adherence to accounting standards.
- Sarbanes-Oxley Act (SOX): U.S. federal law aimed at enhancing corporate governance and accountability, requiring companies to maintain internal controls and verify the integrity of financial reports.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Explore the key organizations and rules that govern accounting practices in the United States. This quiz covers important entities such as the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC), along with standardized principles like GAAP. Test your knowledge on how these components contribute to the integrity of financial reporting.
