Financial Accounting and Reporting concepts tested on the CPA FAR exam section.
44 cards · basic cards · AI-written, checked twice. Edit anything.
- What is the fundamental accounting equation?
- Assets = Liabilities + Equity
- What are the two fundamental qualitative characteristics of useful financial information under the FASB conceptual framework?
- Relevance and faithful representation
- What are the three components of relevance in the FASB conceptual framework?
- Predictive value, confirmatory value, and materiality
- What are the three components of faithful representation?
- Completeness, neutrality, and freedom from error
- What are the four enhancing qualitative characteristics of financial information?
- Comparability, verifiability, timeliness, and understandability
- What does the going concern assumption presume about an entity?
- That the entity will continue operating for the foreseeable future
- What does the materiality principle allow a preparer to do?
- Omit or misstate information that would not influence a user's decisions
- What does the full disclosure principle require?
- That all information relevant to users' decisions appear in the statements or notes
- What does the conservatism (prudence) concept favor when uncertainty exists?
- Anticipating losses but not gains
- Under the ASC 606 revenue recognition model, step one is to ____.
- identify the contract with a customer
- Under the ASC 606 revenue recognition model, step two is to ____.
- identify the performance obligations in the contract
- Under the ASC 606 revenue recognition model, step three is to ____.
- determine the transaction price
- Under the ASC 606 revenue recognition model, step four is to ____.
- allocate the transaction price to the performance obligations
- Under the ASC 606 revenue recognition model, step five is to ____.
- recognize revenue when or as each performance obligation is satisfied
- Under FIFO inventory costing, which units are assumed to be sold first?
- The oldest units purchased