9A Wrong Answers Flashcards
Realization occurs…
At the time of sale rather than when cash is collected
According to SFAC 6, realization is the process of…
Converting noncash resources and rights into money through
Sale of assets for cash or claims to cash
Per, SFAC 6, the major difference between financial and physical capital maintenance is related to…
The effects of price changes on assets held and liabilities owed
During the period
The financial capital concept is applied in…
Current GAAP
In the financial capital concept, the effects of the price changes are considered…
“Holding gains and losses” and are included in computing return
On capital
Comprehensive income is described in SFAC 5 as…
Change in equity of business enterprise during period from
Transactions and other events and circumstances from nonowner
Sources
Comprehensive income is a measure of…
Return on financial capital
Physical capital maintenance seeks to measure the…
Effects of price changes that aren’t currently captured under
GAAP
EX. Replacement costs of nonmonetary assets
According to SFAC 7, The most relevant measure of a liability always reflects…
The credit standing of an entity obligated to pay
Those who hold the entity’s obligations as assets incorporate the…
Entity’s credit standing in determining prices they’re willing to pay
The Codification provides guidance on the determination of gain or loss on disposal of…
2) according to this guidance, such determination should be based on…
A component of business
2) estimates of net realizable value
Historical cost, current reproduction and replacement costs are not appropriate measurement bases for assets (under SFAC 6) once an entity has decided to…
Discontinue its operations because these amounts don’t reflect
Entity’s probable future benefit
IASB element defined as increases in economic benefits in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity. What is this IASB element?
Income
The IASB definition of income includes both…
Revenues and gains
If the outcome of rendering services can’t be measured reliably, what revenue recognition method does IFRS require?
Cost recovery method