Card Set Information
STUDY FOR 1st Test
What are the two types of Adjustments?
Deferrals and Accruals
What are the two types of Deferrals?
1.)Prepaid expenses and 2.) Unearned Revenue
What are the two types of prepaids?
Cost allocation of a short term asset, and cost allocation of a long term asset
What are two types of Accruals?
Accrued Revenues and Accrued Expenses ( ex. db AR/ cr Revenue) ( db. Rent exp/ Cr accounts payable)
What are the four most frequently provided financial statements?
The four are : (1) balance sheet, (2) income statement, (3) Statement of stockholder/ owners equity, (4) Statement of Cash flows.
What is GAAP?
the common set of standards and procedures.
What three organizations make GAAP?
AICPA, FASB, SEC
When and why was the SEC created?
The SEC was created in 1934 as a result of the stock market crash.
What commited did the AICPA form in 1939 and what did they issue?
They formed the Commite on Accounting Procedures and they issued 51 (ARB)s
What was the 4 problems with CAP?
1.not productive, 2. no research, 3. brush fire approach, 4. no sec backed
In 1959 what new commitee was formed by AICPA?
The Accounting Principles Board( APB)
what was the purposes of the APB?
1. research, 2. develop framework, 3. sec backed
How many opinions did they release and what were their problems?
they relased 31 APB opinions, Problems were 1. not productive, 2. poor research, 3. No framework ( disband 1972-73)
When was the Wheat commitee formed and what did they do?
In 1972, they recommended the demise of the APB Formed the FINANCIAL ACCOUNTING FOUNDATION( F.A.F.) decided private sector should not set G.A.A.P.
What were the 3 commitees created as result of Wheat ?
Financial Accounting Foundation,(FAF)/ Financial Accounting Standards Board(FASB), and Financial Accounting Standards Advisory Council( FASAC).
What does the FAF do?
The FAF selects members of the FASB and Advisory council and oversees FASB activites
What were the improvements of FASB?
1. Smaller Membership, 2. full-time, membership(well paid), 3. sever all previous employment ties, 4. Broader representation.
What are the 6 parts of Due process?
1. Identify topics set agenda, 2. conduct research, 3. issue discussion memo, 4. public hearings, 5. issue exposure draft, 5. comment period
What is a FASB Standards Statement?
requires support of three of five members and is considered GAAP and therby binding in practice
what are the three major types of pronouncements?
1. Standards, interpretations, and staff positions. 2. financial accounting concepts. 3. emmerging issues task force statements
what are financial accounting standards?
Issued by Fasb and are conisdered GAAP
What are interpretations?
they modify or extend existing standards.
what are staff positions?
they provide interpretive guidance and also minor amendments to standards and interpretations.
What are Financial ccounting concepts?
they are created framework which are fundamental objectives.
what is first level GAAP?
AICPA( CAP-51 ARBS) ( APB- 31 opinions) and FASB a. standards. b. interpretations
What is second level GAAP?
2nd level is Authoritatvie support... SEC , AICPA, EMERGING ISSUES TASK FORCE
What are the first four parts of the accounting cycle?
Journal entry> Post to general ledger> Unadjusted trial balance > Analyze adjusting journal entries
What are the last four parts of the accounting cycle?
Adjusted trial balance> Transactions prepare four statements> closing journal entries> post general ledger