Chapter 1 Study Guide .docx - Chapter 1 Study Guide Types...

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Chapter 1 Study Guide Types of Pronouncements- Statements on Financial Accounting Standards- - Issued by FASB, has the highest authority within GAAP - Establishes methods and procedures required on specific accounting issues Interpretations: - Refine GAAP by clarifying conflicting or unclear issues relating to previously issued Standards Staff Positions- - Staff pronouncements that provide timely and consistent application guidance - Narrow and limited revisions to Standards Technical Bulletins- - FASB staff issued to clarify, explain, or elaborate on accounting and reporting problems related to specific standards Statements of Financial Accounting Concepts- - Establishes a theoretical foundation for financial and reporting standards - Fundamental principles that guide the development of GAAP Other Pronouncements- - On a major topic, the FASB staff also may issue a guide for implementation, in the form of questions and answers Accounting Research Bulletins (no longer issued, but may still equal GAAP)- - Committee on Accounting’s way of establishing GAAP- - Constitutes GAAP unless superseded or amended by FASB Opinions- (no longer issued, but still may be GAAP) - Pronouncements od Accounting Principles Board that set GAAP - Constitute GAAP unless specifically amended or rescinded
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Learning Objective 1.1- 1.2 Why do we need accounting information? We need accounting information to make decisions on the allocation of scarce resources Financing Activities- Activities that raise capital to run operations by getting money from investors or borrowing from lenders Investing Activities- Activities that use capital form Financing activities to obtain productive resources Operating activities- The day to do business activities Stakeholders- Individuals or entities that have an interest in the company- -Internal or external What drives stakeholders need for Accounting information: -Resource allocation
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