Week 1 Homework Essay

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Week 1 Homework – ACCT550 CA1-3 (Financial Reporting and Accounting Standards) 1. GAAP stands for: (d) Generally Accepted Accounting Principles. 2. Accounting standard-setters use the following process in establishing accounting standards: (d) Research, discussion paper, exposure draft, standard. 3. GAAP is comprised of: (d) any accounting guidance included in the FASB Codification. 4. The authoritative status of the conceptual framework is as follows. (a) It is used when there is no standard or interpretation related to the reporting issues under consideration. 5. The objective of financial reporting places most emphasis on: (a) reporting to capital providers. 6. General purpose financial statements are prepared primarily for: (b) external users. 7. Economic consequences of accounting standard-setting means: (d) accounting standards can have detrimental impacts on the wealth levels of the providers of financial information. 8. The expectations gap is: (b) what the public thinks accountants should do and what accountants think they can do. E2-5 (Elements of Financial Statements) (a) Arises from peripheral or incidental transactions. Gaines and Losses. (b) Obligation to transfer resources arising from a past transaction. Liabilities. (c) Increases ownership interest. Investments by owners, Comprehensive income, Revenues, and Gains. (d) Declares and pays cash dividends to owners. Distribution to owners. (e) Increases in net assets in a period from non-owner sources. Comprehensive income. (f) Items characterized by service potential or future economic benefit. Assets. (g) Equals increase in assets less liabilities during the year, after adding distributions to owners and subtracting investments by owners. Comprehensive income. (h) Arises from income statement activities that constitute the entity’s ongoing major or central

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