intermediate accountingfifteenth edition ch01.docx

1、intermediate accountingfifteenth edition ch01CHAPTER 1Financial Accounting and Accounting StandardsASSIGNMENT CLASSIFICATION TABLE (By Topic)TopicsQuestions Cases1.Subject matter of accounting.142.Environment of accounting.2, 3, 286, 73.Role of principles, objectives, standards, and accounting theor

2、y.4, 5, 6, 71, 2, 3, 54.Historical development of GAAP.8, 9, 10, 1185.Authoritative pronouncements and rule-making bodies.12, 13, 14, 15, 16, 17, 18, 19, 20, 213, 9, 11, 12, 146.Role of pressure groups.22, 23, 24, 25, 26, 2710, 16, 177.Ethical issues.2913, 15ASSIGNMENT CLASSIFICATION TABLE (By Learn

3、ing Objective)Learning ObjectivesQuestionsCases1.Identify the major financial statements and other means of financial reporting. 1, 2CA1-4, CA1-52.Explain how accounting assists in the efficient use of scarce resources.3, 53.Identify the objective of financial reporting.4, 7CA1-2, CA1-3, CA1-4, CA1-

4、5, CA1-64.Explain the need for accounting standards.6CA1-3, CA1-7, CA1-95.Identify the major policy-setting bodies and their role in the standard-setting process.8, 9, 10, 11,13, 14, 15, 16, 19CA1-1, CA1-2, CA1-3, CA1-7, CA1-8, CA1-9, CA1-11, CA1-146.Explain the meaning of generally accepted account

5、ing principles (GAAP) and the role of the codification for GAAP.12, 14, 18, 19, 20, 21CA1-2, CA1-3, CA1-7, CA1-8, CA1-127.Describe the impact of user groups on the rule-making process. 17, 22, 23, 24, 25, 26, 27CA1-10, CA1-11, CA1-13, CA1-16, CA1-178.Describe some of the challenges facing financial

6、reporting.289.Understand issues related to ethics and financial accounting.16, 17, 29CA1-6, CA1-13, CA1-15ASSIGNMENT CHARACTERISTICS TABLEItemDescriptionLevel of DifficultyTime (minutes)CA1-1FASB and standard-setting.Simple1520CA1-2GAAP and standard-setting.Simple1520CA1-3Financial reporting and acc

7、ounting standards.Simple1520CA1-4Financial accounting.Simple1520CA1-5Objective of financial reporting.Moderate2025CA1-6Accounting numbers and the environment.Simple1015CA1-7Need for GAAP.Simple1520CA1-8AICPAs role in rule-making.Simple2025CA1-9FASB role in rule-making.Simple2025CA1-10Politicalizatio

8、n of GAAP.Complex3040CA1-11Models for setting GAAP.Simple1520CA1-12GAAP terminology.Moderate3040CA1-13Rule-making Issues.Complex2025CA1-14Securities and Exchange Commission.Moderate3040CA1-15Financial reporting pressures.Moderate2535CA1-16Economic consequences.Moderate2535CA1-17GAAP and economic con

9、sequences.Moderate2535SOLUTIONS TO CODIFICATION EXERCISESCE1-1The information at this link describes the elements offered in The FASB Accounting Standards Codification. As indicated, the website offers several resources to enhance your working knowledge of the Codification and the Codification Resea

10、rch System. This page includes links to help pages which describe specific functions and features of the Codification. Links to frequently asked questions, the FASB Learning Guide, and the Notice to Constituents are also available on this page. Help pages FAQ Learning Guide About the CodificationNot

11、ice of ConstituentsCE1-2The following information is provided at the Providing Feedback link:The Codification includes a feature which can be used to submit content-related feedback or general, system-related comments. The feedback system is not designed for comments on proposed Accounting Standards

12、 Updates.Content-related feedbackAs a registered user of the FASB Accounting Standards Codification Research System website, you are able and are encouraged to provide feedback, at the paragraph level, to the FASB about any content-related matters. For specific information about the Codification and

13、 the feedback process, please read the Notice to Constituents.To provide content-related feedback:Click the Submit feedback button beneath the paragraph for which you want to provide feedback. Enter or copy/paste your comments in the text box. Note that formatting (lists, bold, etc.) is not retained

14、 and there is a 4,000 character limit on feedback submissions.Click SUBMIT. Your comments are sent to the FASB and reviewed by FASB staff. You can also submit multiple comments for any given paragraph, if, for example, you determine that more information would be useful to the FASB staff.General fee

15、dbackClick here to provide general feedback on the Codification in general, the Codification Research System website, and other system-related items that are not content specific.CE1-3The “Whats New” page provides links to Codification content that has been recently issued. During the verification p

16、hase, updates may result from either the issuance of Codification update instructions that accompany new Standards or from changes to the Codification due to incorporation of constituent feedback.ANSWERS TO QUESTIONS1. Financial accounting measures, classifies, and summarizes in report form those ac

17、tivities and that information which relate to the enterprise as a whole for use by parties both internal and external to a business enterprise. Managerial accounting also measures, classifies, and summarizes in report form enterprise activities, but the communication is for the use of internal, mana

18、gerial parties, and relates more to subsystems of the entity. Managerial accounting is management decision oriented and directed more toward product line, division, and profit center reporting.2. Financial statements generally refer to the four basic financial statements: balance sheet, income state

19、ment, statement of cash flows, and statement of changes in owners or stockholders equity. Financial reporting is a broader concept; it includes the basic financial statements and any other means of communicating financial and economic data to interested external parties. Examples of financial report

20、ing other than financial statements are annual reports, prospectuses, reports filed with the government, news releases, management forecasts or plans, and descriptions of an enterprises social or environmental impact.3. If a companys financial performance is measured accurately, fairly, and on a tim

21、ely basis, the right managers and companies are able to attract investment capital. To provide unreliable and irrelevant information leads to poor capital allocation which adversely affects the securities market.4. The objective of general purpose financial reporting is to provide financial informat

22、ion 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 through equity investments and loans or other forms of credit. Information that is decision-useful to capital providers (investor

23、s) may also be useful to other users of financial reporting who are not investors.5. Investors are interested in financial reporting because it provides information that is useful for making decisions (referred to as the decision-usefulness approach). When making these decisions, investors are inter

24、ested in assessing the companys (1) ability to generate net cash inflows and (2) managements ability to protect and enhance the capital providers investments. Financial reporting should therefore help investors assess the amounts, timing, and uncertainty of prospective cash inflows from dividends or

25、 interest, and the proceeds from the sale, redemption, or maturity of securities or loans. In order for investors to make these assessments, the economic resources of an enterprise, the claims to those resources, and the changes in them must be understood. 6. A common set of standards applied by all

26、 businesses and entities provides financial statements which are reasonably comparable. Without a common set of standards, each enterprise could, and would, develop its own theory structure and set of practices, resulting in noncomparability among enterprises.7. General-purpose financial statements

27、are not likely to satisfy the specific needs of all interested parties. Since the needs of interested parties such as creditors, managers, owners, governmental agencies, and financial analysts vary considerably, it is unlikely that one set of financial statements is equally appropriate for these var

28、ied uses.Questions Chapter 1 (Continued)8. The SEC has the power to prescribe, in whatever detail it desires, the accounting practices and principles to be employed by the companies that fall within its jurisdiction. Because the SEC receives audited financial statements from nearly all companies tha

29、t issue securities to the public or are listed on the stock exchanges, it is greatly interested in the content, accuracy, and credibility of the statements. For many years the SEC relied on the AICPA to regulate the profession and develop and enforce accounting principles. Lately, the SEC has assume

30、d a more active role in the develop-ment of accounting standards, especially in the area of disclosure requirements. In December 1973, in ASR No. 150, the SEC said the FASBs statements would be presumed to carry substantial authoritative support and anything contrary to them to lack such support. It

31、 thereby supports the development of accounting principles in the private sector.9. The Committee on Accounting Procedure was a special committee of the American Institute of CPAs that, between the years of 1939 and 1959, issued 51 Accounting Research Bulletins dealing with a wide variety of timely accounting problems. These bulletins provided solutions to immediate problems and narrowed the range of alternative practices. But, the Committees problem-by-problem approach failed to provide a well-defined and