A/R & A/P

Question 1

How do you amortize service assets?

Answer 1

Measure in proportion to and over the estimated period of service income or loss.

Question 2

Under the net method, when discounts are offered when paid within two weeks and % is estimated…….

Answer 2

There is a credit to discounts not taken.

Question 3

When deciding which PV % to use when valuing securities, should you use the states rate or market rate if they are not electing to report at fair value?

Answer 3

Stated rate.

Question 4

How much should be amortized of a bond discount when the face interest and market interest are different?

Answer 4

Calculate interest based on the market interest of the carrying value (discounted bond amount). Next calculate face interest of bond. The difference is the amortization..

Question 5

Under IFRS, are borrowing costs expensed or capitalized?

Answer 5

Capitalized if it meets certain tests, otherwise expensed.

Question 6

How is interest on a loan calculated when the interest rate is not reasonable?

Answer 6

The present value of the note times the market rate.