HAND OUT FOR PREPARING FOR PART A
I. Financial Accounting
1) Cost, full disclosure, and matching are three of the basic accounting _________. 2) The FASB is responsible for developing new accounting _____________, which will become part of GAAP. 3) GAAP is the acronym for generally ___________ accounting principles. 4) Large companies must use the _________-basis of accounting, rather than the cash-basis of accounting. 5) A corporation's annual report to the SEC is the Form _______-K. 6) The difference between the amounts of assets and liabilities is stockholders' __________. 7) The balance sheet is also referred to as the statement of financial __________. 8) If a corporation's stock is _________-traded, it will have additional financial reporting requirements. 9) Distributions of some of a corporation's net income to the stockholders. 10) The word for an entry on the right side of an account.
1) The title of the asset account that reports the unexpired cost of insurance premiums that have already been paid is _____________ Insurance. 2) The owner's equity section of a corporation's balance sheet is known as shareholders equity or _______________________ equity. 3) The title of the liability account that reports amounts that were received by the company before they were earned is ________________ Revenues. 4) The financial statement that reports the financial position of a company as of an instant or point in time is the ________________ sheet. 5) The balance sheet reports amounts that apply at a particular ____________ in time. 6) An entry to the left-side of an account.
7) This component of Property, Plant & Equipment is not depreciated. 8) The accounting guideline that prevents assets from being reported at amounts greater than their cost is the __________ principle. 9) Sometimes inventory is reported at an amount that is __________ than cost. 10) The basis or method of accounting that is less effective than the accrual basis in measuring profitability.
III. Accounting Basics
1) Liabilities are amounts _______ by a company.
2) The collection of an account receivable will affect two _________ accounts. 3) Double-entry accounting is a key reason why the accounting ______________ remains in balance. 4) Along with owner's equity these are claims against a company's assets. 5) This word is often part of the account title of liabilities. 6) The accounting equation remains in balance because of the accounting system known as __________-entry. 7) The financial statement with a structure similar to the accounting equation is the __________ sheet. 8) Revenues + gains – expenses – losses = _____ income. 9) The balance sheet reports the financial position of a company at a moment or ________ in time. 10) A listing of all the accounts to which amounts can be posted is the ___ of accounts.
IV. Accounting Principles
1) The Conceptual _________________ was a discussion memorandum issued by the FASB in the 1970s. Out of this came the FASB Statements of Financial Accounting Concepts. 2) Accounting Research __________ were issued between 1939 and 1959. The ARBs remain a source of accounting principles unless superseded by the APB or FASB. 3) _______________ practices or peculiarities allow for modifications of accounting principles. Often this involves companies that are regulated by the federal government, such as banks, utilities, investment firms, and insurance companies. 4) The matching principle requires that expenses be matched with the related __________________ reported on the income statement. 5) Conservatism is often associated with this rule for inventory valuation. (acronym) 6) The assumption that the purchasing power of the dollar is constant is the __________________ unit assumption. 7) A qualitative characteristic associated with verifiability and "you can depend on it". 8) The cost principle is often referred to as the ______________ cost principle....
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