TEST BANK for Intermediate Accounting (Volume 1 &
2), 8th Canadian Edition By Thomas H. Beechy, Joan E.
Conrod
Conceptual Framework - ANSWER: Developed by the FASB as a theoretical
foundation of interrelated objectives, concepts, principles, and definitions that leads
to the establishment of consistent high-quality financial accounting standards and
the appropriate application of those standards in accounting practice.
Statements of Financial Accounting Concepts (Concepts Statements) - ANSWER:
General proclamations that establish fundamental principles of accounting,
objectives of financial reporting, qualities of useful financial accounting information,
definitions of basic elements of accounting, and other important aspects of financial
accounting.
Accounting Principles - ANSWER: Fundamental theories, truths, and propositions
that serve as the foundation for financial accounting and financial reporting.
Generally Accepted Accounting Principles (GAAP) - ANSWER: The principles,
concepts, guidelines, methods, and practices that regulated companies in the U.S.
are required to use in preparing and reporting the accounting information in
financial statements for use by external stakeholders and decision makers.
Accounting Standards - ANSWER: Professional standards (U.S. GAAP and IFRS) for
how companies should account for and report revenues, expenses, assets, liabilities,
and equities that provide the concepts, rules, guidance, and methods that principals
and agents need to measure and report financial statements that are relevant and
representationally faithful.
Accounting Standards Codification - ANSWER: A searchable electronic database that
integrates and topically organizes U.S. GAAP into one coherent body of literature.
Accounting Standards Updates - ANSWER: A new standard issued by the FASB.
Rules - ANSWER: Specific implementation guidelines through which financial
statement preparers apply accounting standards to measure and report a company's
financial statements.
Stewardship - ANSWER: How efficiently and effectively the company's management
and governing board have discharged their responsibilities to use the company's
resources.
Return on Investment - ANSWER: Serves as useful information to investors, lenders,
and other creditors in providing a measure of overall company profitability and
performance.
, Risk - ANSWER: The uncertainty or unpredictability of the future results of a
company.
Financial Flexability - ANSWER: The ability of a company to use its financial resources
to adapt to change and to take advantage of opportunities.
Liquidity - ANSWER: A characteristic of an asset that refers to how quickly a company
can convert that asset into cash to meet short-term obligations and cover operating
costs.
Operating Capability - ANSWER: The ability of a company to produce goods and
services for customers.
Decision Usefulness - ANSWER: The overall qualitative characteristic that is the
ultimate objective of accounting information.
Relevance - ANSWER: A primary attribute of accounting information that indicates it
is capable of making a difference in decisions made by financial statement users.
Financial information is capable of making a difference if the information is capable
of helping users predict future outcomes and/or confirm or correct prior
expectations, and the information is material in nature and amount.
Predictive Value - ANSWER: An attribute of accounting information that should help
users form expectations about the future.
Confirmatory Value - ANSWER: An attribute of accounting information that provides
feedback to confirm or correct prior predictions and expectations.
Materiality - ANSWER: The nature and magnitude of an omission or misstatement of
accounting information that would influence the judgment of a reasonable person
relying on that information.
Faithful Representation - ANSWER: Accounting information is a faithful
representation of the underlying economic transactions, events, and arrangements
when the words and numbers accurately depict the economic substance of what
they purport to represent. To be a faithful representation, the information must be
complete, neutral, and free from error.
Complete Representation - ANSWER: Full disclosure of all the information necessary
to understand the information being reported in the financial statements, with all
the necessary facts, descriptions and explanations.
Neutral Representation - ANSWER: Unbiased measurement and presentation of the
financial statements and amounts.
2), 8th Canadian Edition By Thomas H. Beechy, Joan E.
Conrod
Conceptual Framework - ANSWER: Developed by the FASB as a theoretical
foundation of interrelated objectives, concepts, principles, and definitions that leads
to the establishment of consistent high-quality financial accounting standards and
the appropriate application of those standards in accounting practice.
Statements of Financial Accounting Concepts (Concepts Statements) - ANSWER:
General proclamations that establish fundamental principles of accounting,
objectives of financial reporting, qualities of useful financial accounting information,
definitions of basic elements of accounting, and other important aspects of financial
accounting.
Accounting Principles - ANSWER: Fundamental theories, truths, and propositions
that serve as the foundation for financial accounting and financial reporting.
Generally Accepted Accounting Principles (GAAP) - ANSWER: The principles,
concepts, guidelines, methods, and practices that regulated companies in the U.S.
are required to use in preparing and reporting the accounting information in
financial statements for use by external stakeholders and decision makers.
Accounting Standards - ANSWER: Professional standards (U.S. GAAP and IFRS) for
how companies should account for and report revenues, expenses, assets, liabilities,
and equities that provide the concepts, rules, guidance, and methods that principals
and agents need to measure and report financial statements that are relevant and
representationally faithful.
Accounting Standards Codification - ANSWER: A searchable electronic database that
integrates and topically organizes U.S. GAAP into one coherent body of literature.
Accounting Standards Updates - ANSWER: A new standard issued by the FASB.
Rules - ANSWER: Specific implementation guidelines through which financial
statement preparers apply accounting standards to measure and report a company's
financial statements.
Stewardship - ANSWER: How efficiently and effectively the company's management
and governing board have discharged their responsibilities to use the company's
resources.
Return on Investment - ANSWER: Serves as useful information to investors, lenders,
and other creditors in providing a measure of overall company profitability and
performance.
, Risk - ANSWER: The uncertainty or unpredictability of the future results of a
company.
Financial Flexability - ANSWER: The ability of a company to use its financial resources
to adapt to change and to take advantage of opportunities.
Liquidity - ANSWER: A characteristic of an asset that refers to how quickly a company
can convert that asset into cash to meet short-term obligations and cover operating
costs.
Operating Capability - ANSWER: The ability of a company to produce goods and
services for customers.
Decision Usefulness - ANSWER: The overall qualitative characteristic that is the
ultimate objective of accounting information.
Relevance - ANSWER: A primary attribute of accounting information that indicates it
is capable of making a difference in decisions made by financial statement users.
Financial information is capable of making a difference if the information is capable
of helping users predict future outcomes and/or confirm or correct prior
expectations, and the information is material in nature and amount.
Predictive Value - ANSWER: An attribute of accounting information that should help
users form expectations about the future.
Confirmatory Value - ANSWER: An attribute of accounting information that provides
feedback to confirm or correct prior predictions and expectations.
Materiality - ANSWER: The nature and magnitude of an omission or misstatement of
accounting information that would influence the judgment of a reasonable person
relying on that information.
Faithful Representation - ANSWER: Accounting information is a faithful
representation of the underlying economic transactions, events, and arrangements
when the words and numbers accurately depict the economic substance of what
they purport to represent. To be a faithful representation, the information must be
complete, neutral, and free from error.
Complete Representation - ANSWER: Full disclosure of all the information necessary
to understand the information being reported in the financial statements, with all
the necessary facts, descriptions and explanations.
Neutral Representation - ANSWER: Unbiased measurement and presentation of the
financial statements and amounts.
