ACG Exam 1 with all Correct & 100% Verified Answers |
Actual Complete Exam |Already Graded A+
U.S. Generally Accepted Accounting Principles (GAAP) ✔Correct Answer-Primarily rules-based
standards of accounting determined by the Financial Accounting Standards Board (FASB)
International Financial Reporting Standards (IFRS) ✔Correct Answer-Attempt to create
standard principles-based accounting determined by International Accounting Standards Board
(IASB)
Increased globalization requires improved comparability
The International Accounting Standards Committee (IASC) was founded in ✔Correct Answer-
1973
Initially, the IASC made decisions on accounting issues and reported them in the form of
✔Correct Answer-IAS
In January 2001, the IASC announced formation of the ✔Correct Answer-International
Accounting Standards Board (IASB)
IASB is responsible for issuing standards known as ✔Correct Answer-International Financial
Reporting Standards (IFRS)
Standard setter for IFRS is the ✔Correct Answer-International Accounting Standards Board
(IASB)
Newer standards are called: ✔Correct Answer-International Financial Reporting Standards
IFRS
US concerns about the IASB ✔Correct Answer-No government agency oversees IASB
25% of financing came from major accounting firms
When a foreign company wants to sell shares on an United States based market, they file a
✔Correct Answer-F-1
When a domestic company wants to sell shares on an United States based market, they file a
✔Correct Answer-S-1
Annual report can be filed using either IFRS or the company's local GAAP on form ✔Correct
Answer-20-F
If foreign company has local GAAP, ✔Correct Answer-must reconcile to GAAP
,If foreign company has IFRS filing, ✔Correct Answer-No reconciliation
Best solution to merge IFRS & GAAP ✔Correct Answer-Convergence
Condorsement of IFRS ✔Correct Answer-Converge what exists as much as possible (while
minimizing costs)
For new standards, add necessary provisions for use locally
Convergence Approach ✔Correct Answer-Maintain local standards and work with IASB to
converge standards over time
Endorsement Approach ✔Correct Answer-Pick and choose which parts of IFRS to incorporate
into local standards
2005-2009 IFRS adoption ✔Correct Answer-FASB and IASB committed to convergence of U.S.
GAAP and IFRS and identified key convergence projects
In general, U.S. GAAP are considered to be more ✔Correct Answer-rules-based
In general, U.S. IFRS are considered to be more ✔Correct Answer-principles-based
Still the fact remains that _________ includes far more details at present than _______
✔Correct Answer-U.S. GAAP, IFRS
"Active" Convergence Projects ✔Correct Answer-Revenue recognition - fully converged
Leases - discontinued
Insurance costs - discontinued
Financial Instruments - partial convergence
Inventory difference ✔Correct Answer-GAAP: lower of cost or MV;
LIFO allowed
IFRS: lower of cost of NRV; LIFO prohibited
Development costs difference ✔Correct Answer-GAAP: R&D expensed
IFRS: R&D capitalized
PPE difference ✔Correct Answer-GAAP: Historical cost
IFRS: Historical cost or reevaluated amt
Contingent liability difference ✔Correct Answer-GAAP: Record if probable and estimable
IFRS: Not recognized
Leases difference ✔Correct Answer-GAAP: operating vs capital leases differ
, IFRS: operating vs capital leases same presentation
Insurance contracts difference ✔Correct Answer-GAAP: profit recog. by type of contract
IFRS: profit recog. by timing of pmts and risk of pmt
fin. instruments difference ✔Correct Answer-GAAP: accounting depends on type of
instrument
IFRS: accounting depends on cash flow from instrument
Component Depreciation difference ✔Correct Answer-IFRS requires, GAAP allows
component depreciation ✔Correct Answer-Break property into smaller, depreciable parts
Financial periods presented difference ✔Correct Answer-GAAP: 2 years BS, 3 rest
IFRS: 2 years for all
Balance sheet presentation difference ✔Correct Answer-GAAP: Classified or Non-classified,
dec. liquidity order
IFRS: Classified format, inc. liquidity order
Income statement presentation difference ✔Correct Answer-GAAP: expenditures listed by
function
IFRS: expenditures listed by function or nature
Unusual items difference ✔Correct Answer-GAAP: reported on IS & notes
IFRS: reporting on IS is optional, notes are required
Statement of cash flows difference ✔Correct Answer-GAAP: Direct or Indirect
IFRS: Can begin with indirect, less guidance on operating, investing, and financing
GAAP hierarchy ✔Correct Answer-refers to how an entity identifies the sources of accounting
principles and the framework for selecting the principles used in preparing financial statements
the FASB Accounting Standards Codification (ASC) ✔Correct Answer-will become the source of
authoritative accounting and reporting standards for nongovernmental entities in the U.S.
Revenue is recognized only when ✔Correct Answer-a performance obligation is satisfied by
transferring goods or services.
Customer consideration model: revenue is recognized ✔Correct Answer-when there is an
increase in the contract asset or a decrease in the contract liability from satisfying performance
obligations
Actual Complete Exam |Already Graded A+
U.S. Generally Accepted Accounting Principles (GAAP) ✔Correct Answer-Primarily rules-based
standards of accounting determined by the Financial Accounting Standards Board (FASB)
International Financial Reporting Standards (IFRS) ✔Correct Answer-Attempt to create
standard principles-based accounting determined by International Accounting Standards Board
(IASB)
Increased globalization requires improved comparability
The International Accounting Standards Committee (IASC) was founded in ✔Correct Answer-
1973
Initially, the IASC made decisions on accounting issues and reported them in the form of
✔Correct Answer-IAS
In January 2001, the IASC announced formation of the ✔Correct Answer-International
Accounting Standards Board (IASB)
IASB is responsible for issuing standards known as ✔Correct Answer-International Financial
Reporting Standards (IFRS)
Standard setter for IFRS is the ✔Correct Answer-International Accounting Standards Board
(IASB)
Newer standards are called: ✔Correct Answer-International Financial Reporting Standards
IFRS
US concerns about the IASB ✔Correct Answer-No government agency oversees IASB
25% of financing came from major accounting firms
When a foreign company wants to sell shares on an United States based market, they file a
✔Correct Answer-F-1
When a domestic company wants to sell shares on an United States based market, they file a
✔Correct Answer-S-1
Annual report can be filed using either IFRS or the company's local GAAP on form ✔Correct
Answer-20-F
If foreign company has local GAAP, ✔Correct Answer-must reconcile to GAAP
,If foreign company has IFRS filing, ✔Correct Answer-No reconciliation
Best solution to merge IFRS & GAAP ✔Correct Answer-Convergence
Condorsement of IFRS ✔Correct Answer-Converge what exists as much as possible (while
minimizing costs)
For new standards, add necessary provisions for use locally
Convergence Approach ✔Correct Answer-Maintain local standards and work with IASB to
converge standards over time
Endorsement Approach ✔Correct Answer-Pick and choose which parts of IFRS to incorporate
into local standards
2005-2009 IFRS adoption ✔Correct Answer-FASB and IASB committed to convergence of U.S.
GAAP and IFRS and identified key convergence projects
In general, U.S. GAAP are considered to be more ✔Correct Answer-rules-based
In general, U.S. IFRS are considered to be more ✔Correct Answer-principles-based
Still the fact remains that _________ includes far more details at present than _______
✔Correct Answer-U.S. GAAP, IFRS
"Active" Convergence Projects ✔Correct Answer-Revenue recognition - fully converged
Leases - discontinued
Insurance costs - discontinued
Financial Instruments - partial convergence
Inventory difference ✔Correct Answer-GAAP: lower of cost or MV;
LIFO allowed
IFRS: lower of cost of NRV; LIFO prohibited
Development costs difference ✔Correct Answer-GAAP: R&D expensed
IFRS: R&D capitalized
PPE difference ✔Correct Answer-GAAP: Historical cost
IFRS: Historical cost or reevaluated amt
Contingent liability difference ✔Correct Answer-GAAP: Record if probable and estimable
IFRS: Not recognized
Leases difference ✔Correct Answer-GAAP: operating vs capital leases differ
, IFRS: operating vs capital leases same presentation
Insurance contracts difference ✔Correct Answer-GAAP: profit recog. by type of contract
IFRS: profit recog. by timing of pmts and risk of pmt
fin. instruments difference ✔Correct Answer-GAAP: accounting depends on type of
instrument
IFRS: accounting depends on cash flow from instrument
Component Depreciation difference ✔Correct Answer-IFRS requires, GAAP allows
component depreciation ✔Correct Answer-Break property into smaller, depreciable parts
Financial periods presented difference ✔Correct Answer-GAAP: 2 years BS, 3 rest
IFRS: 2 years for all
Balance sheet presentation difference ✔Correct Answer-GAAP: Classified or Non-classified,
dec. liquidity order
IFRS: Classified format, inc. liquidity order
Income statement presentation difference ✔Correct Answer-GAAP: expenditures listed by
function
IFRS: expenditures listed by function or nature
Unusual items difference ✔Correct Answer-GAAP: reported on IS & notes
IFRS: reporting on IS is optional, notes are required
Statement of cash flows difference ✔Correct Answer-GAAP: Direct or Indirect
IFRS: Can begin with indirect, less guidance on operating, investing, and financing
GAAP hierarchy ✔Correct Answer-refers to how an entity identifies the sources of accounting
principles and the framework for selecting the principles used in preparing financial statements
the FASB Accounting Standards Codification (ASC) ✔Correct Answer-will become the source of
authoritative accounting and reporting standards for nongovernmental entities in the U.S.
Revenue is recognized only when ✔Correct Answer-a performance obligation is satisfied by
transferring goods or services.
Customer consideration model: revenue is recognized ✔Correct Answer-when there is an
increase in the contract asset or a decrease in the contract liability from satisfying performance
obligations
