Your old friend, Bumble Beasley, just completed his account- ing degree at Dewey
ID: 3859097 • Letter: Y
Question
Your old friend, Bumble Beasley, just completed his account- ing degree at Dewey, Cheatham and Howe University. Although he studied XBRL in several of his accounting and information systems courses, he’s not really sure he has mastered the topic. In talking with you, Bumble made the following statements.Determine whether each one is true or not true.
XBRL is a new set of accounting principles that everyone must use, similar to the Interna- tional Financial Reporting Standards (IFRS).
The Securities and Exchange Commission encourages companies to use XBRL when they file forms like 10-K and 10-Q.
Different organizations may use different taxonomies depending on where they are located and what type of company they are.
If a taxonomy does not include an appropriate tag for a specific company, the company can- not use XBRL.
The risks associated with using XBRL must be mitigated with internal controls unique to XBRL; existing controls cannot be adapted for that purpose.
Since the tagging process is automated, most accounting professionals will never prepare an instance document manually.
XBRL should only be used by publicly traded corporations that must file with the SEC in its EDGAR database.
In the EDGAR database, instance documents are labeled “interactive data.”
An XBRL namespace is a file on a company’s main computer server; it cannot be accessed by people outside the company.
No relationship exists between XBRL and relational database concepts.
- a. b.XBRL is a new set of accounting principles that everyone must use, similar to the Interna- tional Financial Reporting Standards (IFRS).
- a. b.The Securities and Exchange Commission encourages companies to use XBRL when they file forms like 10-K and 10-Q.
- a. b.Different organizations may use different taxonomies depending on where they are located and what type of company they are.
- a. b.If a taxonomy does not include an appropriate tag for a specific company, the company can- not use XBRL.
- a. b.The risks associated with using XBRL must be mitigated with internal controls unique to XBRL; existing controls cannot be adapted for that purpose.
- a. b.Since the tagging process is automated, most accounting professionals will never prepare an instance document manually.
- a. b.XBRL should only be used by publicly traded corporations that must file with the SEC in its EDGAR database.
- a. b.In the EDGAR database, instance documents are labeled “interactive data.”
- a. b.An XBRL namespace is a file on a company’s main computer server; it cannot be accessed by people outside the company.
- a. b.No relationship exists between XBRL and relational database concepts.
Explanation / Answer
1. XBRL is a new set of accounting principles that everyone must use, similar to the Interna- tional Financial Reporting Standards (IFRS). ----- This is True
Explanation : XBRL stands for Extensible Business Reporting Language. This is a standerdised language for electronic communication ffor Business Reporting and it has been designed keeping in mind the IFRS architecture.
2. The Securities and Exchange Commission encourages companies to use XBRL when they file forms like 10-K and 10-Q. ---------- True
Explanation : Both fork 10K and 10Q which are annual and quaterly financial report filed by a publically listed companies and Securitiies and Exchange Commission encourages the companies to use XBRL to file the same.
3. Different organizations may use different taxonomies depending on where they are located and what type of company they are. -- False
Explanation :Organizations should use latest XBRL taxonomy developed by the Financial Accounting Standards Board (FASB) and which is accepted by the SEC for use in the XBRL conversion.
4. XBRL should only be used by publicly traded corporations that must file with the SEC in its EDGAR database.---False
Explanation : It can be used by both public and private sectors.
5. In the EDGAR database, instance documents are labeled “interactive data.” -- True
6. An XBRL namespace is a file on a company’s main computer server; it cannot be accessed by people outside the company.---False
XBRL can be used by people outisde thereby providing more transperency in financial reports.
7. No relationship exists between XBRL and relational database concepts. --- False
Explanation : Relationship exisits but then it should not be confused with the concept of RDBMS, XBRL is a reporting language and not querying language like RDBMS.
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