![]() It is information that is verifiable, factual and neutral. What is reliable accounting information? Accounting information that can be verified as accurate if needed and is not just an educated guess. It is information that makes a difference in decision making. What is the IASB? International Accounting Standards Board What does the IASB do? The body that sets global standards for international accounting What is relevant accounting information? Accounting information that has an impact on the financial status of a company. The FASB outlines the fundamental principles for the preparation of financial reports so that reporting and accounting procedures are consistent and accurate across all types of industries and financial markets. Purpose of the FASB? The FASB is an independent full-time organization dedicated to setting the guidelines and standards for accounting practices and procedures in the US. It was established in 1973 and replaced the CAP. What is the FASB, when was it established, and who did it replace? FASB stands for the Financial Accounting Standards Board. It was created by the AIA as a sub-committee in the late 1930s to specifically create the GAAP principles. What is the CAP? Committee on Accounting Procedure. The SEC asked the AIA for assistance in examine the formation of financial statements. E.g., if the price of an asset is understated by $10, will that misstatement have enough of an effect on the financial statement to matter? Conservatism Principle calls for recognizing expenses as soon as possible, but delaying the recognition of revenues until they are ensured What does the SEC stand for? Securities and Exchange Commission Purpose of the SEC to regulate financial practices among publicly-traded companies and to protect the public against deception or fraud in the selling of securities What is the AIA? The American Institute of Accountants. Materiality Principle states that an amount can be ignored if its effect on the financial statements is unimportant to users' business decisions. Revenue Recognition Principle The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied or earned. This principle requires that businesses use the accrual form of accounting and match business expenses in a given time period. Matching Principle Refers to the manner in which a business reports income and expenses.
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