1 Flashcards
Qualitative
Relevant and Faithful Representation
Relevant
Predict
Confirm
Material Value
Faithful Representation
Complete
Neutral
Free from error
entity assumption
separate corporation/division
going concern assumption
continue to operate in foreseeable future
monetary unit assumption
measurable
periodicity assumption
meaningful periods
measurement principal
allows A&L to be measured at bases
replacement cost
cash that would be paid to acquire an asset
unusual/infrequent
- non operating g/l
- separately reported as part of income from continuing operations
incremental cost of obtaining a contract
not been incurred and recognized as an asset
Disco Ops (NET OF TAX)
- NET OF TAX
- bottom of IS
- After income from continuing ops
disco rules
strategic shift and major effect
deferred revenue (prepaid)
cash received before revenue is earned
deferred expense (prepaid)
cash paid before expense is incurred
accrued revenue
cash received after revenue has been earned
accrued expense
cash paid after expense has been incurred
single step IS
- total revenue and total expenses displayed
- no discounts or recovery
selling expense
advertising, freight out, salaries and commissions
G&A expense
legal fees, accounting fees, officers salary, insurance
when fixed asset is sold at a gain or loss…
record as part of income from continuing operations at net amount
deferred revenue
liability until the service has been performed
