Final Exam Study Sheet

Final Exam Study Sheet - SEC: help develop and standardize...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
SEC: help develop and standardize financial information FASB: develops accounting standards: tech bulletins, interpretations, staff positions, financial accounting concepts, emerging issues AICPA: Accounting research bulletins, APB Opinions, failed GAAP: FASB Codification, APB Opinions, AICPA Interpretations, Sarbanes Oxley set up PCAOB Framework : 1) objectives 2) characteristics: Primary- understandability, relevance(predictive feedback timeliness), reliability(verifiable faithful neutral) Secondary- comparability, consistency 3) Assumptions : economic entity, going concern, monetary unit, periodicity Principles : measurement (historical cost/ fair value), revenue recognition (when realized and earned), expense recognition (period as incurred, product match revenue), full disclosure Constraint : cost-benefit, materiality(5% of net income), industry practices, conservatism Income : sales-COGs-selling-admin= inc from operations+ other gains – other losses= income before tax- taxes = net income Retained earnings : Begin RE + net income – dividends = ending RE Balance Sheet : current assets + PPE = assets current liab + long-term liab + stock equity = liab and equity Cash (excludes AP and AR) to accrual : cash rec. + ARend-ARbeg+URbeg-URend cash paid +PPDbeg-PPDend+ALend-ALbeg Income : 1)operating= sales, COGs, selling, admin 2) non-operating= others gains/losses 3)income tax 4)discontinued operations 5)extraordinary items 6)earnings per share Irregular items: part of operating income : unusual gains/losses, change in estimates below line : discontinued operations(intent and ability), extraordinary items(infrequent and unusual) not included : change in principle(retrospective entry to RE), correction of errors(no entry) Comprehensive Income : net income + other comprehensive income. Non-owner transactions (net of tax gains/losses on AFS, foreign currencies, hedging transactions, gross margin) report on income statement or statement of SE Current assets = cash/equivalents, short-term(held to maturity trading AFS), receivables, inventory, prepaid exp. Non-current = long- term, PPE (include depr), intangible Current liab = payables, unearned rev, current maturities disclose : inventory valuation, estimates, contractual situations, fair value (parenthetical, cross reference, and supporting) Ordinary annuity start payment in year one; interest rate = pure rate, inflation, and credit risk; risk free rate : pure and inflation Cash Equivalent (readily convertible and near maturity), compensating balance(have to have in account), overdraft=liab, petty cash=cash, short-term paper=equiv/invest, checks=receiv, advances=receiv, stamps=prepaid non-trade receivable(advances, deposits, dividends/interest receivable, claims) Gross method : don’t account discount until payment allowance method : percentage of sales= don’t account for amount there
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

Final Exam Study Sheet - SEC: help develop and standardize...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online