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Becker FAR 1 2024/2025 Detailed Questions And Expert Answers, Exams of Nursing

Becker FAR 1 2024/2025 Detailed Questions And Expert Answers

Typology: Exams

2024/2025

Available from 09/01/2024

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Becker FAR 1
Name the single source of authoritative nongovernmental U.S. GAAP. -
ANS>The FASB "Accounting Standards Codification" (ASC).
The term "International Financial Reporting Standards" includes what
standards? - ANS>-International Accounting Standards (IAS)
-International Financial Reporting Standards (IFRS)
-IFRIC Interpretations
-SIC Interpretations
Who are the primary users of general purpose financial reports? -
ANS>Existing & potential investors, lenders, and other creditors.
Name the pervasive constraint on the information provided in financial
reporting. - ANS>Cost constraint: The benefits of reporting financial
information must be greater than the costs of obtaining and presenting
the information.
Name the fundamental qualitative characteristics of useful financial
information. - ANS>Relevance and Faithful Representation
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Becker FAR 1

Name the single source of authoritative nongovernmental U.S. GAAP. - ANS>The FASB "Accounting Standards Codification" (ASC). The term "International Financial Reporting Standards" includes what standards? - ANS>-International Accounting Standards (IAS) -International Financial Reporting Standards (IFRS) -IFRIC Interpretations -SIC Interpretations Who are the primary users of general purpose financial reports? - ANS>Existing & potential investors, lenders, and other creditors. Name the pervasive constraint on the information provided in financial reporting. - ANS>Cost constraint: The benefits of reporting financial information must be greater than the costs of obtaining and presenting the information. Name the fundamental qualitative characteristics of useful financial information. - ANS>Relevance and Faithful Representation

Name the three elements of relevance. - ANS>Predictive value, Confirming value, and Materiality Name the three elements of faithful representation. - ANS>Neutrality, Completeness, and Freedom from error Name the enhancing qualitative characteristics of financial information.

  • ANS>Comparability, Verifiability, Timeliness, and Understandability According to SFAC #5, what should a full set of financial statements include? - ANS>-Statement of Financial Position (the balance sheet) -Statement of Earnings (the income statement) -Statement of Comprehensive Income -Statement of Cash Flows -Statement of Changes in Owners' Equity What is the difference between realization and recognition? - ANS>Realization: When sold and converted to cash (or claims to cash) Recognition: When recorded in the financial statements List the 10 elements of financial statements according to SFAC #6 - ANS>Comprehensive income, Revenues, Expenses, Gains and Losses,

Extraordinary items Retained Earnings Statement: Cumulative effect of a change in Accounting principle The gain (loss) from discontinued operations can consist of... - ANS>An impairment loss, a gain (loss) from actual operations, and a gain (loss) on disposal. In what period are the following reported: An impairment loss? A gain (loss) from actual operations? A gain (loss) on disposal? - ANS>All are reported in the period in which they occur. In reporting discontinued operations, how is a "component" of an entity defined under U.S. GAAP and IFRS? - ANS>U.S. GAAP: An operating segment, a reportable segment, a reporting unit, a subsidiary, or an asset group IFRS: A separate major line of business or geographical area of operations, or A subsidiary acquired exclusively with a view to resale.

How do we account for subsequent increases in the fair value of a discontinued component? - ANS>A gain is recognized for the subsequent increase in fair value minus costs to sell (but not in excess of the previously recognized cumulative loss). The gain is reported in the period of increase. What types of costs are associated with exit and disposal activities? - ANS>-Involuntary employee-termination benefits -Costs to terminate a contract that is NOT a capital lease -Other costs associated with exit or disposal activities Define extraordinary items. - ANS>-Material in nature -Of a character significantly different from the typical or customary business activities (unusual) -Not expected to recur in the foreseeable future (infrequent) -Not normally considered in evaluating the ordinary operating results of an enterprise **Remember: Extraordinary items are recognized under U.S. GAAP but not IFRS. List some examples of extraordinary items. - ANS>-The abandonment of, or damage to, a plant due to an infrequent earthquake or an infrequent flood.

How is a change in an accounting estimate reported? - ANS>- Prospectively -The effect is shown in the current and/or future periods that are affected by the change -Financial statements are NOT restated Under U.S. GAAP, how is a change in the accounting entity reported? - ANS>All current and prior period financial statements presented are restated. How are error corrections reported? - ANS>Reported as prior period adjustments to retained earnings and all comparative financial statements presented are restated. Define comprehensive income. - ANS>Change in equity (net assets) that results from revenue, expenses, gains, and losses during a period, as well as any other recognized changes in equity that occur for reasons other than investments by owners and distributions to owners. Identify five items included in other comprehensive income. PUFER - ANS>-Pension adjustments -Unrealized gains/losses on available-for-sale securities

-Foreign currency translation adjustments and gains/losses on foreign currency transactions that are designated as economic hedges of a net investment in a foreign entity -Effective portions of cash flow hedges -Revaluation surpluses (IFRS only) List the three formats acceptable for reporting comprehensive income. Which format is prohibited under IFRS? - ANS>1. Statement of Comprehensive Income (single-statement approach)

  1. Statement of Income followed by separate Statement of Comprehensive Income (two-statement approach)
  2. Component of the Statement of Owners' Equity (prohibited under IFRS, will be prohibited under U.S. GAAP for public companies as of 12/15/11 and for nonpublic companies as of 12/15/12) List some disclosure requirements for comprehensive income. - ANS>- Tax effects of each component included in current "Other Comprehensive Income" -Changes in the accumulated balances of components of "Other Comprehensive Income" -Total accumulated other comprehensive income -Reclassification adjustments between other comprehensive income and net income

What are the guidelines for interim reporting? - ANS>-Use same accounting principles that were used in the most recent annual report. -Allocate expenses to the interim period benefited. -Revenues are recognized in the period in which they are earned and realized/realizable. -A total for comprehensive income in condensed financial statements of interim periods. What income tax rate is used in interim financial reporting? - ANS>Use best estimate of effective tax rate to be applicable for full fiscal year on quarterly statements. Name the four required disclosures for segments of an enterprise. - ANS>-Operating segments -Products and services -Geographic areas -Major customers Define operating segment. - ANS>Distinct revenue-producing components of the enterprise about which separate financial information is produced internally, and whose operating results are regularly reviewed by the enterprise. Determined using a "management approach."

Name two quantitative thresholds used in identifying reportable operating segments. - ANS>-10% "Size" test -75% "Reporting Sufficiency" test Describe the 10% test for identifying reportable segments. - ANS>- Revenue: reported revenue, including both sales to external customers and intersegment sales or transfers, is 10% or more of the combined revenue, internal & external, of all operating segments. -Reported profit/loss: The absolute amount of its reported profit/loss is 10% or more of the greater, in absolute amount, of: 1. The combined reported profit of all op. segments that did not report a loss, or 2. The combined reported loss of all op. segments that did report a loss. -Assets: Assets are 10% or more of the combined assets of all op. segments. NOTE: Must meet only one of the above. What is the 75% test for identifying reportable segments? - ANS>Combined external (consolidated) revenue of all reportable segments must be at least 75% of the total consolidated revenue of the entity. The practical limit is 10 segments, but this is not a precise limit.

-In the I/S, show revenue & expenses, & cumulative total of both amts from company's inception. -In Stmt of Cash Flows, include cumulative amts of cash inflows and outflows from enterprise's inception and current amts of cash inflows & outflows for each pd presented. -Issue a separate stmt of stockholders' equity, indicating shares issued, date of issuance, dollar amts assigned, and noncash consideration, if any. What is the date of an entity's transition to IFRS? - ANS>The date of the opening balance sheet. Describe the Form 10-K and the Form 10-Q. What level of assurance must be provided with the financial statements submitted in these forms? - ANS>Form 10-K: Filed annually by U.S. registered companies. Includes a summary of financial data, MD&A, and AUDITED financial statements prepared using U.S. GAAP. Form 10-Q: Filed quarterly by U.S. registered companies. Includes unaudited (REVIEWED) financial statements, interim MD&A, and certain disclosures.