1Bi Balance Sheet/Statement of Financial Position Flashcards
Current Assets
Cash and other assets expected to be converted into cash or consuming within one year or one operating cycle (Whichever is longer)
What if a company has an operating cycle longer than a year - how are current assets defined
The assets have to be converted into cash or consumed within that operating cycle
When you’re looking at the trial balance - and you’re given prepaid tax and a tax rate - but not tax expense…
How do you find tax expense and the real amount of prepaid tax
- Take difference of revenues and expenses in trial balance
- Multiply that by take rate to find tax expense
- Subtract tax expense from prepaid tax to find real amount
When you have an overdraft in account - with no available cash in another account at the same bank to offset - How is the overdraft accounted for?
Current Liability
How are Deferred Tax Assets/Liabilities Classified on the Balance Sheet (Current or non current)?
Non Current
How is Discount on Bonds Payable Treated in Regards to Current Liabilities?
It is subtracted from current liabilities
A check made out to a vendor - dated Dec 1 yr 1 - not mailed until January yr 2
How does that affect cash in yr 1?
Should not be recorded towards cash in balance until Jan yr 2
If it was recorded and money was taken out, it should be added back
A check payable to you with the date January yr 2 - for the payment of a sale Dec yr 1
How does that affect cash in balance in yr 1?
Should not be recorded as cash in balance year 1
Check Payable to you - Deposited Dec 15 yr 1 - included in Dec 31 yr 1 checkbook balance - but returned by bank Dec 30 yr 1 for NSF - Check redeposited on Jan 2, yr 2 and cleared Jan 9
How does that affect cash in balance in yr 1?
Would not be included as cash for the balance sheet yr 1
Since it was recorded in the yr 1 balance sheet, it would have to be subtracted
How is cash placed in a bond sinking fund for long term bonds payable classified (current or non current assets)?
Non current asset
Accounts receivable with allowance for doubtful accounts
How is it recorded in current assets?
It should be recorded as accounts receivable for the net amount
Example: 20k A/R 5k allowance, record as 15k A/R
Merchandise Inventory (Current or non current asset)
Current Asset
Investment in Trading Securities (current or non current assets)
Current Assets
Deposits Received from customers - How is it classified in balance sheet?
Liability
Unearned Rent - How’s it Classified?
Liability
