Questions from General Accounting

Q: Should constituents have input into the FASB decisions, or should the

Should constituents have input into the FASB decisions, or should the FASB neutrally and independently set standards?

Q: Do you think that the so-called equity theories of accounting

Do you think that the so-called equity theories of accounting are really theories in the scientific sense? If so, how would you classify them?

Q: What is comprehensive income?

What is comprehensive income?

Q: SFAC No. 6 is largely a repetition of SFAC No.

SFAC No. 6 is largely a repetition of SFAC No. 3. Discuss two possible reasons why this repetition occurred.

Q: Very carefully explain why conflicts can exist between prediction of cash flows

Very carefully explain why conflicts can exist between prediction of cash flows and accountability. Can these conflicts be resolved?

Q: How is accounting data useful to investors? To creditors?

How is accounting data useful to investors? To creditors?

Q: Comment on the following. “Maximizing residual income is the same

Comment on the following. “Maximizing residual income is the same as maximizing earnings. Managers should be rewarded for maximizing either one.”

Q: Why do managers of Berkshire Hathaway have an incentive to send cash

Why do managers of Berkshire Hathaway have an incentive to send cash to Omaha?

Q: Conservatism is discussed in paragraphs 91–97 of SFAC No.

Conservatism is discussed in paragraphs 91–97 of SFAC No. 2. Why is its role in SFAC No. 2 rather ambiguous? Why is conservatism absent from SFAC No. 8?

Q: Is it fair to categorize ARS 1 and ARS 3 as failures

Is it fair to categorize ARS 1 and ARS 3 as failures?