Question

Required: Provide brief written responses to the following questions:

1. How many Accounting Research Bulletins were issued?

2. What was the time period the above bulletins were issued?

3. What was the name of the organization that issued the bulletins?

4. What was the main purpose of the Accounting Principles Board?

5. How many members were on this board?

6. What were the reports they issued?

7. What lead to the replacement of the Accounting Principles Board?

8. What organization replaced the Accounting Principles Board?

9. When and why was the “SEC” Securities and Exchange Commission established?

10. Briefly explain the following principles:

a. Revenue Recognition

b. Expense Recognition

c. Full Disclosure

Answer 1

1. 17 bulletins

2. between 1938 and 1959

3. Committee on Accounting Procedure (CAP)

4. The main purpose of the Accounting Principles Board was to issue guidelines and rules on accounting principles.

5.  Its membership consisted of between 18 and 21 representatives of accounting firms, corporate executives, and academics.

6. The Accounting Principles Board issued 31 opinions during its brief existence, including guidelines related to accounting for leases, income taxes, business combinations, intangibles, and early extinguishment of debt.A

7. The Accounting Principles Board was disbanded in the hopes that the smaller, fully independent FASB could more effectively create accounting standards.

8. Financial Accounting Standards Board.

9. The Securities And Exchange Commission (SEC) was created in June 6,1934 to help restore investor confidence in the wake of the 1929 stock market crash. They provide a place where investors can trade already issued stock.

10. a. Revenue Recognition: Revenue recognition is an accounting principle that outlines the specific conditions under which revenue. In accounting, the terms "sales" and "revenue" can be, and often are, used interchangeably, to mean the same thing. Revenue does not necessarily mean cash received.

b. Expense Recognition: Expenses recognition primarily refers to the accounting principle that follows the accrual basis concept where expenses are recognized and matched in the books in the same period as that of the revenues. There are two types of expense recognition principle – Accrual Basis and Cash Basis.

c. Full Disclosure: Full disclosure is the U.S. Securities and Exchange Commission's (SEC) requirement that publicly traded companies release and provide for the free exchange of all material facts that are relevant to their ongoing business operations. The full disclosure principle is a concept that requires a business to report all necessary information about their financial statements and other relevant information to any persons who are accustomed to reading this information.