1 Not complete Marked out of 10.00 Flag question Identifying Objectives of Financial Reporting The objective of financial reporting as outlined in the conceptual framework guides the financial reporting process. Identify whether each of the following phrases aligns with the objective of financial reporting or not. a.Provides information on general-purpose financial information. b.Provides information on specialized financial information. c.Focused on financial reporting needs of internal financial statement users. d. Focused on financial reporting needs of external financial statement users. e.Provides information for an identifiable accounting unit with distinct economic activities. Identifying Accounting Entities Match the following organization descriptions with the appropriate organization. 1. Private sector board with a goal of creating a single set of high quality, globally accepted standards. AICPA 2. Committee that identifies, discusses, and resolves accounting issues within the framework of the Codification with an emphasis on timely resolution. EITF FASB IASB SEC 3. U.S. governmental agency with authority granted by Congress, to prescribe and enforce financial reporting standards. 4. Private sector board that is primarily responsible for establishing generally accepted accounting principles. 5. Private sector organization of certified public accountants that establishes audit standards for private companies and develops and grades the Uniform CPA Examination Question 3 Not complete Marked out of 10.00 Flag question Applying Accounting Assumptions Identify which accounting assumption (economic entity, going concern, monetary unit, or periodicity) applies in each of the following situations a through d. a.Eagles Corp. reports financial information quarterly and annually. b.Eagles Corp. does not adjust dollar amounts in its financial statements for the effects of inflation. c. Debt of Eagles Corp.'s individual investors is not consolidated into the financial results of Eagles Corp. d.Eagles Corp. depreciates its buildings over 40 years. Check economic entity going concern monetary unit periodicity Identifying Influencers of GAAP Development For each responsibility a through j, indicate which entity is primarily responsible for that duty SEC (Securities and Exchange Commission) AICPA (Accounting Institute of Certified Public Accountants) FASB (Financial Accounting Standards Board) The following responsibilities relate to the development of GAAP. a. Issues Accounting Standard Updates that are included in the Codification. b. Arranged the committees that developed GAAP from 1939-1973. c. Primarily responsible for the development of GAAP since 1973. AICPA FASB d. Holds the authority to develop and enforce GAAP but has delegated the development of GAAP to the private sector. SEC e. Created the Committee on Accounting Procedure and the Accounting Principles Board. f. Includes 7 board members who serve the board on a full-time basis, with renewable 5-year terms. g. Primarily responsible for conclusions reached by the Emerging Issues Task Force. h. Mission is to ensure that the investor community has the information needed to make decisions on resources allocated to investments. i. Responsible for developing the Uniform CPA Examination. j. Develops or improves GAAP through a transparent process that often involves public meetings, public comment solicitation, and public hearings. Principles, Assumptions, Constraint Following are accounting assumptions, accounting principles, and constraints, lettered a through i. a. Economic entity assumption b. Going concern assumption c. Periodicity assumption d. Monetary unit assumption e. Revenue recognition principle f. Measurement principle g. Expense recognition principle h. Full-disclosure principle i. Cost effectiveness constraint Match the following phrases 1 through 9 with their best assumption, principle or constraint. Key Phrase 1. Recognition of revenue when performance obligation is met. 2. Common denominator-the U.S. dollar. 3. Expenses recorded as revenue is incurred, as expense is incurred, or systematically over time. 4. Preparation cost versus value of benefit to the user. 5. Separate and apart from its owners and other entities. 6. Report all relevant information. 7. Reporting periods-such as monthly, quarterly, or yearly. 8. Historical cost and current market value measurements. 9. Business continuity for the foreseeable future. Assumption, Principle orConstraint = = =