Exam 2: Financial Reporting Theory

Explain comprehensive income in terms of other elements of the financial statements.

What is equity and how does it change during a period of time?

Discuss how standard setters use the conceptual framework in developing new standards.

According to IFRS,point-in-time elements include assets,liabilities,and equity.

Black Gold Gem Co omitted the fact that a mine has been depleted ahead of estimates.Because of this omission,the financial information provided to users ________.

________ elements appear on the balance sheet.

When developing new standards,the standard setters must first determine ________.

All of the following are primary components of the conceptual framework for financial reporting except ________.

Identify the element,and whether it is point-in-time or period-of-time.

Leonetta's Leather Store reported revenue of $375,000 in its cash based income statement for the year ended December 31,2014.Additional information from the books: What would Leonetta's revenue be under the accrual basis of accounting?

The attribute ________ relates to information that is relevant.

The economic entity concept stipulates that an entity will measure and report economic activities in monetary units.

Financial capital maintenance refers to the concept that capital is viewed in terms of ________.

What drives the measurement and timing of revenue recognition?

The two fundamental characteristics of financial information are ________.

According to the FASB's conceptual framework,gains include increases in equity from which of the following activities?

Under U.S.GAAP revenues are considered ________ when the seller has accomplished what it must do to be entitled to the revenues.

The FASB and IASB are converged in general recognition principles.

Purrfect Pets,Inc.provides animal daycare for $25 per day.Customers buy three month packages,which provide 15 days of care per month.In January,they received cash payments from 10 customers.For the month of February,they will recognize ________ of revenue under the cash basis,and ________ of revenue under the accrual basis.

S&C Company services elevators at a fee of $175 per month.Clients pay in advance every quarter - and the company currently services 100 buildings.During the first quarter of the year,S&C collected all service fees on January 1; they also incurred the following expenses: $8,000 in January,$15,000 in February,and $7,000 in March.They paid half of the expense total in February and the rest in March,they did not pay expenses in January.Determine S&C's net income for each month,as well as the quarterly total,under both the cash and accrual basis.Is the quarterly total the same? If it is different,what would account for this?