Intermediate accounting 2-4

PREPAID insurance

current assets

notes payable

current liabilities

common stock

capital stock

land

property plan and equipment

allowance for doubtful accounts

other assets

accounts receivable 

current assets

goodwill

intangible assets

wages payable

current liabilities

premium on BONDS PAYABLE

non-current liabilities

trade accounts PAYABLE (OWE)

current liabilities

DEPRECIATION of machinery.

Operating activity- add to net income

PAYMENT OF CASH dividends.

Financing activity

DECREASE in accounts PAYABLE during the year.

Operating activity- deduct from net income

INCREASE in accounts receivable during the year. (PEOPLE OWING YOU MONEY)

Operating activity- deduct from net income

loss on SALE of equipment. (

Operating activity- add to net income

Exchange of furniture for office equipment.

Not reported as cash flow

Sale of EQUIPMENT at BOOK VALUE.

Investing activity

Purchase of land and building.

Investing activity

AMORTization of PATENT.

Operating activity- add to net income

ISSURANCE of capital stock.

Financing activity

The Financial Accounting Foundation (FAF) has charged the Financial Accounting Standards Board (FASB) with being "robust, comprehensive and inclusive." Which characteristic is part of this demand?

Enabling interested parties to express their views on issues under consideration

Which entity does the Securities and Exchange COMMISSION (SEC) currently rely on to develop ACCOUNTING STANDARDS?

Financial Accounting standards Board (FASB)

Which statement provides a distinction between the Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA)?

The SEC is responsible for enforcement of securities-related regulations.

What is an ingredient of the fundamental quality of RELEVANCE in regards to accounting INFORMATION?

Predictivity

Which characteristic describes the fundamental quality of relevance?

Materiality

Which ingredient is associated with the fundamental quality of RELEVANCE?

Materiality

Which statement accurately describes the conceptual FRAMEWORKS developed by Financial Accounting Standards Board (FASB) and International Accounting Standards Board (IASB)?

The two frameworks have the same qualitative characteristics for reporting.

Why is a conceptual FRAMEWORK for financial accounting necessary?

It enables standard-setters to issue pronouncements that are consistent and useful.

What is the purpose of the Financial Accounting Foundation (FAF)?

To select the members of the FASB and FASAC , to fund their activities, and generally oversee the FASB's activities.

Which requirement should be in place for an item to be RECOGNIZED in the main body of financial STATEMENTS?

It is relevant to decision makers.

The Financial Accounting Foundation (FAF) has charged the Financial Accounting Standards Board (FASB) with being "robust, comprehensive and inclusive." Which characteristic is part of this demand?

Enabling interested parties to express their views on issues under consideration

Which type of income includes GAINS AND LOSSES that affect stockholders' equity and are not part of net income?

Comprehensive income

Economic activity is measured without considering PRICE-LEVEL CHANGES according to generally accepted accounting principles (GAAP) as long as a certain assumption is met.

Which assumption must be present?

MONETARY unit

Which accounting assumption is applied when a company keeps DISTINCT and SEPERATE records of financial activities

Economic entity

Which ingredient is associated with FAITHful representation?

Neutrality

Which organization enforces appropriate accounting practices for publicly TRADED companies?

Securities and Exchange Commission (SEC)

To be useful for decision-making, financial statements must have the fundamental quality of relevance.

What are the ingredients for RELEVANCE?

Predictive value, confirmatory value, and materiality

Which organization was formed in HOPES of PREVENTING the government from establishing accounting standards?

Study Group on Establishment of Accounting Principles

Which ingredient supports faithful representation?

Completeness

Which organization ENFORCE Federal SECURITIES laws?

Securities and Exchange Commission (SEC)

The Financial Accounting Foundation (FAF) has charged the Financial Accounting Standards Board (FASB) with being "robust, COMPREHENSIVE, and inclusive."

What is part of this demand?

Enabling interested parties to express their views on issues under consideration