Intermediate Accounting Chapter 1 Homework

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Questions and Answers

The topic number for business combinations is ____.

805

The topic number for related party disclosures is ____.

850

The specific seven-digit Codification citation for the initial measurement of internal-use software is ____.

350-40-30

The specific seven-digit Codification citation for the subsequent measurement of asset retirement obligations is ____.

410-20-35 Signup and view all the answers

The specific seven-digit Codification citation for the recognition of stock compensation is ____.

718-10-25 Signup and view all the answers

Match the organizations with the groups they primarily represent:

Securities and Exchange Commission = Users Financial Executives International = Preparers American Institute of Certified Public Accountants = Auditors Institute of Management Accountants = Preparers Association of Investment Management and Research = Users Signup and view all the answers

What is the primary objective of financial reporting?

Useful to capital providers. Signup and view all the answers

What do Statements of Financial Accounting Concepts issued by the FASB identify?

The conceptual framework within which accounting standards are developed. Signup and view all the answers

When is revenue generally recognized?

A good or service has been delivered to a customer. Signup and view all the answers

What are accountants most concerned with when depreciating the cost of an asset?

Recognizing expense in the appropriate period. Signup and view all the answers

What is the primary objective of expense recognition?

Record expenses in the period that related revenues are recognized. Signup and view all the answers

The separate entity assumption states that, in the absence of contrary evidence, all entities will survive indefinitely.

False Signup and view all the answers

An obligation to transfer cash or other resources as a result of a past transaction is called a ____.

liability Signup and view all the answers

Dividends paid by a corporation to its shareholders are classified as ____.

distribution to owners Signup and view all the answers

An inflow of an asset from providing a good or service is referred to as ____.

revenue Signup and view all the answers

The financial position of a company is represented by its ____.

assets, liabilities, and equity Signup and view all the answers

An increase in equity during a period from non-owner transactions is known as ____.

comprehensive income Signup and view all the answers

An increase in equity from peripheral or incidental transactions is termed a ____.

gain Signup and view all the answers

A sale of an asset used in the operations of a business for less than the asset's book value results in a ____.

loss Signup and view all the answers

The owners' residual interest in the assets of a company is called ____.

equity Signup and view all the answers

An item owned by the company representing probable future benefits is called an ____.

asset Signup and view all the answers

Revenues plus gains less expenses and losses result in ____.

net income Signup and view all the answers

An owner's contribution of cash to a corporation in exchange for ownership shares of stock is termed an ____.

investment by owner Signup and view all the answers

An outflow of an asset related to the production of revenue is referred to as an ____.

expense Signup and view all the answers

Pair associated terms with their definitions:

Predictive value = Information is useful in predicting the future Relevance = Pertinent to the decision at hand Timeliness = Information is available prior to the decision Distribution to owners = Decreases in equity resulting from transfers to owners Confirmatory value = Information confirms expectations Understandability = Users understand the information in the context of the decision being made Gain = Increases in equity from peripheral or incidental transactions Faithful representation = Agreement between a measure and the phenomenon it purports to represent Comprehensive income = The change in equity from nonowner transactions Materiality = Concerns the relative size of an item and its effect on decisions Comparability = Important for making interfirm comparisons Neutrality = The absence of bias Recognition = The process of admitting information into financial statements Consistency = Applying the same accounting practices over time Cost effectiveness = Requires consideration of the costs and value of information Verifiability = Implies consensus among different measurers Signup and view all the answers

Study Notes

Financial Accounting Standards Board (FASB) Codification

Business Combinations: Topic number 805.
Related Party Disclosures: Topic number 850.
Initial Measurement of Internal-use Software: Codification citation 350-40-30.
Subsequent Measurement of Asset Retirement Obligations: Codification citation 410-20-35.
Recognition of Stock Compensation: Codification citation 718-10-25.

Groups Establishing GAAP

Securities and Exchange Commission: Primarily represents users.
Financial Executives International: Primarily represents preparers.
American Institute of Certified Public Accountants: Primarily represents auditors.
Institute of Management Accountants: Primarily represents preparers.
Association of Investment Management and Research: Primarily represents users.

Objectives and Concepts of Financial Reporting

Primary Objective: To provide useful information to capital providers.
Statements of Financial Accounting Concepts: Establish the conceptual framework for accounting standards.
Revenue Recognition: Recognized when a good or service is delivered to a customer.
Expense Recognition: Focuses on recognizing expenses in the period related revenues are recognized.
Separate Entity Assumption: Incorrectly understood as implying all entities will survive indefinitely.

Financial Statement Elements

Recent Transactions: Obligations from past transactions classified as liabilities.
Dividends: Recognized as distributions to owners.
Inflow of Assets: Recorded as revenue from goods or services provided.
Financial Position: Comprises assets, liabilities, and equity.
Equity Increases: Refers to comprehensive income from non-owner transactions.
Peripheral Transactions: Increases classified as gains; decreases are recorded as losses.
Owner's Interest: Defined as equity in the assets of a company.
Probable Future Benefits: Represented by assets owned by the company.
Profit Measurement: Calculated as revenues plus gains less expenses and losses.
Investments by Owners: Reflected as cash contributions for ownership shares.
Revenue-Related Outflows: Classified as expenses regarding the production of revenue.

FASB Conceptual Framework Terms

Predictive Value: Information useful for future predictions.
Relevance: Information pertinent to current decisions.
Timeliness: Availability of information prior to decision-making.
Distribution to Owners: Decrease in equity due to owner's transfers.
Confirmatory Value: Information that confirms expectations.
Understandability: Clarity of information in relation to decisions.
Gains: Increases in equity from peripheral or incidental transactions.
Faithful Representation: Accuracy between measures and the represented phenomenon.
Comprehensive Income: Change in equity from non-owner transactions.
Materiality: Concerned with the impact size of an item on decision-making.
Comparability: Important for evaluating different firms.
Neutrality: Absence of bias in reporting.
Recognition: Process of admitting information into financial statements.
Consistency: Use of the same accounting practices over time.
Cost Effectiveness: Balancing costs of information with its value.
Verifiability: Consensus among different measurers of the same information.

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Dive into the fundamentals of Intermediate Accounting with this homework-based flashcard set. Focus on understanding FASB Accounting Standards Codification and related topic numbers. Perfect for students looking to strengthen their grasp on accounting standards and citations.