Accounting 201 Flash Cards
Chapter 1: Environment and Theoretical Structure of Financial Accounting
Accounting Principles Board (APB)
The Accounting Principles Board (APB) followed the CAP.
Asset/liability approach
With the asset/liability approach, recognition and measurement of assets and liabilities drives revenue and expense recognition.
Auditors
Auditors express an opinion on the compliance of financial statements with GAAP.
Capital markets
The capital markets provide a mechanism to help our economy allocate resources efficiently.
Certified public accountants (CPAs)
Certified public accountants (CPAs) are licensed by states to provide audit services.
Comparability
Accounting information should be comparable across different companies and over different time periods.
Complete
A depiction is complete if it includes all information necessary for faithful representation.
Conceptual framework
The conceptual framework does not prescribe GAAP. It provides an underlying foundation for accounting standards.
Conservatism
Conservatism is inconsistent with neutrality.
Consistency
Accounting information is consistent if it is measured and reported the same way in each time period.
Corporation
Corporations acquire capital from investors in exchange for ownership interest and from creditors by borrowing.
Cost effectiveness
Information is cost effective only if the benefit of increased decision usefulness exceeds the costs of providing that information.
Economic entity
The economic entity assumption presumes that economic events can be identified specifically with an economic entity.
Emerging Issues Task Force (EITF)
The Emerging Issues Task Force (EITF) identifies financial reporting issues and attempts to resolve them without involving the FASB.
Ethics
Ethics deals with the ability to distinguish right from wrong.
Fair Value
Fair value bases measurements on the price that would be received to sell assets or transfer liabilities in an orderly
Accounting Principles Board (APB)
The Accounting Principles Board (APB) followed the CAP.
Asset/liability approach
With the asset/liability approach, recognition and measurement of assets and liabilities drives revenue and expense recognition.
Auditors
Auditors express an opinion on the compliance of financial statements with GAAP.
Capital markets
The capital markets provide a mechanism to help our economy allocate resources efficiently.
Certified public accountants (CPAs)
Certified public accountants (CPAs) are licensed by states to provide audit services.
Comparability
Accounting information should be comparable across different companies and over different time periods.
Complete
A depiction is complete if it includes all information necessary for faithful representation.
Conceptual framework
The conceptual framework does not prescribe GAAP. It provides an underlying foundation for accounting standards.
Conservatism
Conservatism is inconsistent with neutrality.
Consistency
Accounting information is consistent if it is measured and reported the same way in each time period.
Corporation
Corporations acquire capital from investors in exchange for ownership interest and from creditors by borrowing.
Cost effectiveness
Information is cost effective only if the benefit of increased decision usefulness exceeds the costs of providing that information.
Economic entity
The economic entity assumption presumes that economic events can be identified specifically with an economic entity.
Emerging Issues Task Force (EITF)
The Emerging Issues Task Force (EITF) identifies financial reporting issues and attempts to resolve them without involving the FASB.
Ethics
Ethics deals with the ability to distinguish right from wrong.
Fair Value
Fair value bases measurements on the price that would be received to sell assets or transfer liabilities in an orderly