2 Flashcards
deck 2
selling expense includes:
advertising, freight out, sales salaries and commissions
*also includes any expenses allocated to sales dept
general and admin expenses include:
officers’ salaries, acct and legal, insurance, DE
(multi-step) nonop. expenses include:
auxiliary activities and interest expense
how do we treat a loss on abandonment of equipment?
Treat as a sale
*DISPOSAL of a comp. of a business is discontinued op’s
the account for a sinking fund bond is classified as:
noncurrent Asset
overdrafts should be classified as:
CL
how are deposits received by customers classified?
a liability
large loss from foreign currency TRANSACTION, union strike that shuts down op’s for 3 months, foreign gov takes possession of company’s only plant, and damage to factory as U/I all have what in common?
they are items included in income from cont. op’s (IFRS+GAAP)
what is unearned revenue reported as?
A liability at PV, net discounts
what are some examples of the output method for revenue recognition?
milestones achieved, units produced/delivered, time elapsed, surveys of performance completed to date, and appraisals of results achieved
input method examples for revenue recognition:
costs incurred relative to total expected costs, resources consumed, labor-hours expended, and time elapsed
what is the most approp. way to assign a discount from a contract w/ multiple embedded obligations?
allocate it proportionally to all obligations within the contract
when is revenue recognized at a point in time?
*phys. possession transfer to buyer (control)
or
* buyer has legal title to asset (control)
when is revenue recognized over time?
Ben’s rec’d by the buyer as selller performs
what happens when rewards and risks of ownership remain with the seller?
do not recognize revenue
