Intermediate Accounting Ch. 2

  1. Retained earnings category?
  2. Sales category?
  3. Additional paid-in capital category?
  4. Inventory Category?
  5. Depreciation category?
  6. Loss on sale of equipment category?
  7. Interest payable category?
  8. Dividends category?
    Distribution to owners.
  9. Gain on sales of investment category?
  10. Issuance of common stock category?
    Investment by owners.
  11. The economic activities of FedEx Corporation are divided into 12-month periods for the purpose of issuing annual reports. Accounting Assumption?
  12. Solectron Corporation, Inc. does not adjust amounts in its financial statements for the effects of inflation. Accounting assumption?
    Monetary unit
  13. Walgreen Co. reports current and noncurrent classifications in its balance sheet. Accounting assumption?
    Going concern
  14. The economic activities of General Electric and its subsidiaries are merged for accounting and reporting purposes. Accounting assumption?
    Economic entity
  15. Oracle Corporation reports information about pending lawsuits in the notes to its financial statements. Principle?
    Full disclosure
  16. Eastman Kodak Company reports land on its balance sheet at the amount paid to acquire it, even though the estimated fair market value is greater. Principle?
    Historical cost
  17. Greco's Farms, Inc. reports agricultural crops on its balance sheet at fair value. Constraint?
    Industry practices
  18. Rafael Corporation does not accrue a contingent lawsuit gain of $650,000. Constraint?
  19. Willis Company does not disclose any information in the notes to the financial statements unless the value of the information to financial statement users exceeds the expense of gathering it.
    Cost-benefit relationship
  20. Favre Corporation expenses the cost of wastebaskets in the year they are acquired.
  21. Accounting assumption that money is the common denominator of economic activity.
    Monetary Unit Assumption.
  22. An accepted accounting principle that companies account for and reports most assets and liabilities on the basis of acquisition price.
    Historical cost principle
  23. A convention in accounting that dictates that when in doubt, choose the solution that will least likely to overstate assets and income.
  24. Accounting assuption that a company will continue in operation for the foreseeable future.
    Going concern assumption
  25. Accounting principle that dictates in deciding what information to report.
    Full disclosure principle
  26. Indicates that a company applied the same accounting to similiar events from period to period.
  27. Peculiarities of some industries and business concerns that cause variations from basic accounting theory or practice.
    Industry practices
  28. A quailitative characteristic of accounting that lets reasonably informed users see it significance.
  29. The first level of the conceptual framework is the?
    Objectives of financial reporting.
  30. Secondary qualities of accounting information are?
    Comparability and consistency.
  31. Increases in equity from peripheral or incidental transactions of an entity are?
  32. Depreciation and amortization policies are justifiable and appropriate because of the?
    Going concern assumption.
  33. Generally, revenue should be recognized?
    At the time of sale.
  34. In providing information with the qualitative characteristics that make it useful, two overriding constraints that must be considered are?
    Cost-benefit relationship and materiality.
  35. Companies and their auditors have adopted a general rule of thumb that anything under 5% of _______ is considered not material?
    Net income.
  36. All of the following statements are false regarding the IASB and FASB convergence efforts except?
    The FASB framework does not identify accrual accounting as an assumption.
  37. The conceptual framework contains how many Statements of Financial Accounting Concepts that related to financial reporting for business enterprises?
  38. The conceptual framework for financial reporting consists of how many levels?
  39. Which level of the conceptual framework is devoted to recognition and measurement concepts?
  40. The primary qualities of accounting information are?
    Relevance and reliability.
Card Set
Intermediate Accounting Ch. 2