FIS – Exam 1 Study Guide and Practice Questions
Financial accounting - ANS✔✔ process that culminates in the preparation of financial reports on
the enterprise for use by both internal and external parties.
Managerial accounting - ANS✔✔ the process of identifying, measuring, analyzing, and
communicating financial information needed by management to plan, control and evaluate a
company's operations.
Financial statements - ANS✔✔ most frequently provided are the balance sheet, income
statement, statement of cash flows and the statement of owner's or stockholders equity.
Financial reporting - ANS✔✔ examples include: president's letter or supplementary schedules in
the corporate annual report, prospectus, government agencies, news releases and
managements forecasts.
Objective of financial reporting - ANS✔✔ to provide financial information about the reporting
entity that is useful to present and potential equity investors, lenders and other creditors in
decisions about providing resources to the entity.
General-purpose financial statements - ANS✔✔ provide financial reporting information to a
wide variety of users for the least cost. also identifies investors and creditors as the primary
users for general-purpose financial statements.
Entity perspective - ANS✔✔ companies are viewed as separate and distinct from their owners.
Decision-usefullness - ANS✔✔ The ability of the information to be useful in decision making -
the company's ability to generate net cash flows and managements ability to protect and
enhance the capital providers investments.
,Accrual based accounting - ANS✔✔ ensures that a company records events that change its
financial statements in the periods in which the events occur, rather than only in the periods in
which it receives or pays cash
Generally accepted accounting principles - ANS✔✔ common set of standard and procedures.
Generally accepted means either that an authoritative accounting rule making body has
established a principle of reporting gin a given area of that over time a given practice has been
accepted as appropriate because of its universal application.
Securities and exchange commission - ANS✔✔ federal government established - helped to
develop and standardize information presented to stockholders. Listed on the stock exchange.
American Institute of Certified Public Accountants - ANS✔✔ national professional organization
of practicing CPA, has been an important contributor to development of GAAP.
Committee on Accounting Procedures (CAP) - ANS✔✔ composed of practicing CPA's. They
issued 51 accounting research bulletins.
Accounting research bulletins - ANS✔✔ deal with a variety of accounting problems. But the
problem to problem approach failed.
Accounting principles board - ANS✔✔ major purposes were to advance the written expression
of accounting principles, determine appropriate practices and narrow the areas of difference
and inconsistency in practice.
APB opinions - ANS✔✔ intended to be based mainly on research studies and be supported by
reason and analysis
,Wheat committee - ANS✔✔ group that examined the organization and operation of the APB
and determined the necessary changes to attain better results; named after chair Francis
Wheat. Led to the replacement of APB with FASB.
Auditing Standards board - ANS✔✔ sarbanes oxley act requires the public company accounting
oversight board to oversee the development of auditing standards
Financial accounting standards board - ANS✔✔ It's mission is to establish and improve
standards of financial accounting and reporting for the guidance and education of the public,
which issue issuers, auditors, and users of financial information.
Financial Accounting Foundation - ANS✔✔ To select members of the FASB and GASB and their
advisory councils, fund their activities, and exercise general oversight.
Financial accounting standards advisory council - ANS✔✔ to consult on major policy issues,
technical issues, project priorities, and selection and organization of task forces.
Accounting standards updates - ANS✔✔ These Updates amend the Accounting Standards
Codification, which represents the source of authoritative accounting standards, other than
standards issued by the SEC.
Emerging issues task force (EITF) - ANS✔✔ Group created in 1984 by the FASB to reach a
consensus on how to account for new and unusual financial transactions that might create
differing financial reporting practices. The FASB reviews and approves all EITF consensuses, and
the SEC views consensus solutions as preferred accounting.
Statements of financial accounting concepts - ANS✔✔ The series sets forth fundamental
objectives and concepts that the board uses in developing future standards of financial
accounting and reporting. DOES not establish GAAP.
, Financial accounting standards board accounting standards codification - ANS✔✔ FASB's
primary goal is to provide in one place all the authoritative literature related to a particular
topic.
Financial accounting standards board codification research system (CRS) - ANS✔✔ An online,
real-time database that provides easy access to the Codification, through a topically organized
structure, subdivided into topics, subtopics, sections, and paragraphs, using a numerical index
system.
Sarbanes-Oxley Act - ANS✔✔ increased the resources for the SEC to combat fraud and curb
poor reporting practices.
Public company accounting oversight board (PCAOB) - ANS✔✔ has oversight and enforcement
authority and establishes auditing, quality control and independence standards and rules.
The expectations gap - ANS✔✔ what the public thinks accountants should do and what
accountants think they can do.
Non-financial information - ANS✔✔ ex of satisfaction indexes, backlog info, reject rates on
goods purchased, results of companies sustainability efforts.
Forward-looking information - ANS✔✔ Financial reports failed to provide forward-looking
information needed by present and potential investors and creditors. Signify their use of
historical cost and accumulation of past events.
Soft assets - ANS✔✔ Intangibles. (brand image example)
Timeliness - ANS✔✔ companies only prepared financial statements quarterly and provided
audited financials annually. Little to no real-time financial statement information was available.
Financial accounting - ANS✔✔ process that culminates in the preparation of financial reports on
the enterprise for use by both internal and external parties.
Managerial accounting - ANS✔✔ the process of identifying, measuring, analyzing, and
communicating financial information needed by management to plan, control and evaluate a
company's operations.
Financial statements - ANS✔✔ most frequently provided are the balance sheet, income
statement, statement of cash flows and the statement of owner's or stockholders equity.
Financial reporting - ANS✔✔ examples include: president's letter or supplementary schedules in
the corporate annual report, prospectus, government agencies, news releases and
managements forecasts.
Objective of financial reporting - ANS✔✔ to provide financial information about the reporting
entity that is useful to present and potential equity investors, lenders and other creditors in
decisions about providing resources to the entity.
General-purpose financial statements - ANS✔✔ provide financial reporting information to a
wide variety of users for the least cost. also identifies investors and creditors as the primary
users for general-purpose financial statements.
Entity perspective - ANS✔✔ companies are viewed as separate and distinct from their owners.
Decision-usefullness - ANS✔✔ The ability of the information to be useful in decision making -
the company's ability to generate net cash flows and managements ability to protect and
enhance the capital providers investments.
,Accrual based accounting - ANS✔✔ ensures that a company records events that change its
financial statements in the periods in which the events occur, rather than only in the periods in
which it receives or pays cash
Generally accepted accounting principles - ANS✔✔ common set of standard and procedures.
Generally accepted means either that an authoritative accounting rule making body has
established a principle of reporting gin a given area of that over time a given practice has been
accepted as appropriate because of its universal application.
Securities and exchange commission - ANS✔✔ federal government established - helped to
develop and standardize information presented to stockholders. Listed on the stock exchange.
American Institute of Certified Public Accountants - ANS✔✔ national professional organization
of practicing CPA, has been an important contributor to development of GAAP.
Committee on Accounting Procedures (CAP) - ANS✔✔ composed of practicing CPA's. They
issued 51 accounting research bulletins.
Accounting research bulletins - ANS✔✔ deal with a variety of accounting problems. But the
problem to problem approach failed.
Accounting principles board - ANS✔✔ major purposes were to advance the written expression
of accounting principles, determine appropriate practices and narrow the areas of difference
and inconsistency in practice.
APB opinions - ANS✔✔ intended to be based mainly on research studies and be supported by
reason and analysis
,Wheat committee - ANS✔✔ group that examined the organization and operation of the APB
and determined the necessary changes to attain better results; named after chair Francis
Wheat. Led to the replacement of APB with FASB.
Auditing Standards board - ANS✔✔ sarbanes oxley act requires the public company accounting
oversight board to oversee the development of auditing standards
Financial accounting standards board - ANS✔✔ It's mission is to establish and improve
standards of financial accounting and reporting for the guidance and education of the public,
which issue issuers, auditors, and users of financial information.
Financial Accounting Foundation - ANS✔✔ To select members of the FASB and GASB and their
advisory councils, fund their activities, and exercise general oversight.
Financial accounting standards advisory council - ANS✔✔ to consult on major policy issues,
technical issues, project priorities, and selection and organization of task forces.
Accounting standards updates - ANS✔✔ These Updates amend the Accounting Standards
Codification, which represents the source of authoritative accounting standards, other than
standards issued by the SEC.
Emerging issues task force (EITF) - ANS✔✔ Group created in 1984 by the FASB to reach a
consensus on how to account for new and unusual financial transactions that might create
differing financial reporting practices. The FASB reviews and approves all EITF consensuses, and
the SEC views consensus solutions as preferred accounting.
Statements of financial accounting concepts - ANS✔✔ The series sets forth fundamental
objectives and concepts that the board uses in developing future standards of financial
accounting and reporting. DOES not establish GAAP.
, Financial accounting standards board accounting standards codification - ANS✔✔ FASB's
primary goal is to provide in one place all the authoritative literature related to a particular
topic.
Financial accounting standards board codification research system (CRS) - ANS✔✔ An online,
real-time database that provides easy access to the Codification, through a topically organized
structure, subdivided into topics, subtopics, sections, and paragraphs, using a numerical index
system.
Sarbanes-Oxley Act - ANS✔✔ increased the resources for the SEC to combat fraud and curb
poor reporting practices.
Public company accounting oversight board (PCAOB) - ANS✔✔ has oversight and enforcement
authority and establishes auditing, quality control and independence standards and rules.
The expectations gap - ANS✔✔ what the public thinks accountants should do and what
accountants think they can do.
Non-financial information - ANS✔✔ ex of satisfaction indexes, backlog info, reject rates on
goods purchased, results of companies sustainability efforts.
Forward-looking information - ANS✔✔ Financial reports failed to provide forward-looking
information needed by present and potential investors and creditors. Signify their use of
historical cost and accumulation of past events.
Soft assets - ANS✔✔ Intangibles. (brand image example)
Timeliness - ANS✔✔ companies only prepared financial statements quarterly and provided
audited financials annually. Little to no real-time financial statement information was available.
