Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

acc > ACC 1 > Flashcards

ACC 1 Flashcards

1
Q

Retrospective Application:
Prior Periods adjusted
Retained Earnings adjusted
Completed Contract to % Completion
Ex: LIFO to FIFO

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

A change of principle.

Applied retrospectively.

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

A change in accounting principle.

Applied retrospectively.

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

A change in accounting estimate is applied prospectively (going forward).

No backwards adjustment is made.

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Change in depreciation method would be a change in accounting estimate.

It is applied prospectively.

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Cumulative effect of error gets adjusted to the beginning balances of assets and liabilities in the earliest period presented in the comparative statements.

The correction of the error must be included in the footnotes.

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Effect is Material

Is identifiable in Prior Period

Couldn’t be estimated in Prior Periods

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

It is treated as a correction of an accounting error.

Cumulative effect of error gets adjusted to the beginning balances of assets and liabilities in the earliest period presented in the comparative statements

Correction of the error must be included in the footnotes

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Effect on Ending Inventory : Effect on Net Income

If one is overstated- both overstated. If one is understated- both understated.

Misstating inventory corrects itself after TWO periods.

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Applied retrospectively.

All prior periods presented for comparative purposes must reflect the change

Footnote disclosures must be made

Changing to Consolidated Statements

A

Accounting Changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Any bond that matures in installments

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Any bond that matures on a single date

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

A bond not secured by any collateral

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Cash is held in a sinking fund for repayment of bond at maturity

5 years of requirements and maturity details should be disclosed

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Present Value of the principal payment at maturity+ Present Value of Interest Payments made
: Market Value of Bond Proceeds

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Step 1: PV of $1 @ Yield Rate (not Stated Rate)
x Bond Face Value

PLUS

Step 2: PV of an Ordinary Annuity of $1 for Term @Yield
x (Stated Rate x Face)

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Include Engraving; Printing; Legal; Underwriter; Registration

Debited to a deferred charge account and amortized over life of Bond using S/L

Bond Proceeds - Bond Issuance Costs : Net Bond Proceeds

Time of amortization begins when issued

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Reported at FMV with unreleased gains and losses being included in earnings

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Both discount and premium amortization amounts increase each year

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

No gain or loss recognized

APIC is the plug for the difference between the Bond’s Book Value and the Par Value of the Common Stock

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Rate on the face of the bond

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Rate that bonds are currently selling for

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Bond will need to sell at a discount in order for buyers to be interested. The difference in market rate vs. the stated is made up by the buyer purchasing the bond for less than par value

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Bond will need to sell at a premium in order for buyers to be interested. The difference in market rate vs. the stated is made up by the buyer purchasing the bond for more than par value

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

The total cash that seller receives will be MORE than they normally would (set aside any considerations for premium or discount; they are irrelevant for this point).

Basically; the purchaser of the bonds must give the bond issuer the amount of accrued interest up front.

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

When the bonds are issued

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Cash for payment : Stated rate x Face amount

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Interest expense : effective yield x carrying value

Any difference between expense and cash payment is applied as amortization against premium/discount

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Bonds that can be converted to stock

Book value method used if no gain or loss

Market value method used if there is a gain or loss

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Gain or Loss is Ordinary

Extraordinary if both unusual and infrequent

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

If terms are modified; and future payments are now less than the carrying amount of the debt; then a Gain is recognized

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Gain recognized:

Difference between cash paid and carrying amount of debt

Difference between non-cash asset given and re-valued at FMV and debt carrying amount

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

If future cash flows discounted at loan’s Effective Interest Rate are less than Carrying Value:

Effective Rate calculated using original rate; not modified rate

A

Bonds & Debt Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

20% Ownership or Less

Accounted for as a purchase

If amount paid is less than fair value; results in a gain in current period

A

Consolidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Ownership 21% to 50%

Gives significant influence

Purchase Price - Par Value : Goodwill

Dividends received from the investee reduce the investment account and are not income

A

Consolidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Ownership of other company is greater than 50%

Investment account is eliminated

Only parent company prepares consolidated statements; not subsidiary.

Acquired assets/liabilities are recorded at Fair Value on acquisition date.

Eliminating entries for inter-company sales of inventory & PPE; also inter-company investments

A

Consolidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Ownership less than 50%

OR

Majority owner does not control - i.e. bankruptcy or foreign bureaucracy

A

Consolidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Acquirer held previous shares accounted for under Fair Value Method or Equity Method; and are now re-valued to Fair Value

Results in a Gain or Loss in current period

A

Consolidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Acquired companies continue to exist as a legal entity - their books are just consolidated with the parent company in the parent’s financial statements

Merged companies cease to exist and only the parent remains

A

Consolidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Expensed in period incurred - i.e. NOT capitalized:
Accounting; Legal; Valuation; Consulting; Professional

Netted against stock proceeds:
Stock registration and issuance costs

A

Consolidations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Cash plus other assets that are expected to be sold or converted to cash during the current operating cycle

Includes: Demand deposits, cash equivalents, accounts receivable, inventory, pre-paids, and short-term investments

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

A liability expected to be paid within 12 months or less

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

(Cash + A/R + Trading Securities) / Current Liabilities

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Currents Assets / Current Liabilities

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Currents Assets - Current Liabilities

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Credit Sales / Average A/R

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

COGS / Average Inventory

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

365 / Inventory Turnover

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Average A/R / Average Sales per Day

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

They are NOT accrued due to Conservatism

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

If Probable - they are accrued (if estimable) and disclosed

If Reasonably Possible - they are disclosed

If Remote - don’t accrue or disclose

A

Current Assets & Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

GAAP says to recognize a revenue/expense in one period and tax laws say to recognize it in another

Example: Dividends from a subsidiary accounted for using the Equity Method - tax income but not book income

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Deduction will reduce future income taxes expense.

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Income will be taxable in a future period and will increase future tax expense

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

The FUTURE enacted tax rate not the current one.

It is never discounted to present value.

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

If it isprobable that not all of a Deferred Tax Asset (debit) will be realized then the Deferred Tax Asset account must be written down (credit) to reflect this

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

They have no tax impact.

When calculating the total differences between book and tax income subtract the permanent differences from the total before applying a future enacted tax rate

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

The sum of Net Changes in Deferred Tax Assets and Deferred Tax Liabilities

GAAP Method for calculating is theAsset and Liability Approach

Note: IFRS uses the Liability approach only

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

Current Deferred Tax Assets and Liabilities will impact income tax expense within 12 months. All current amounts are netted and reported as a single amount on the Balance Sheet

Non-Current Deferred Tax Assets and Liabilities will impact income tax expense 12 months or more fromt he Balance Sheet Date. All non-current amounts are netted and reported as a single amount on the Balance Sheet

A

Deferred Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

At cost when acquired re-valued to fair value each period on Balance Sheet.

A

Derivatives Hedging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

Recorded on income statement

A

Derivatives Hedging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

They are included in Other Comprehensive Income.

A

Derivatives Hedging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

Fair Value Hedge offsets exposure to changes in the value of a recognized asset/liability or of an unrecognized commitment

Initially recorded on Balance Sheet at Fair Value

Gains/Losses recorded on Income Statement

A

Derivatives Hedging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

Cash flow hedges protect from exposure to fluctuations in cash flows.

Initially recorded on Balance Sheet at Fair Value

Gains/Losses going to OCI

Example: A cereal company enters into a futures contract on grain purchases to offset the risk that grain will go up in price.

A

Derivatives Hedging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

In Other Comprehensive Income (OCI)

A

Derivatives Hedging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

Objectives and Strategies

Context to help investor understand the instrument

Risk Management Policies

Complete List of Hedged Instruments

A

Derivatives Hedging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

Fluctuations in that currency cause a gain or loss that must be recognized on the income statement as Income from Continuing Operations

A

Foreign Currency Translation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

The current translation rate as of the balance sheet date is used to report assets and liabilities.

A

Foreign Currency Translation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
69
Q

Use the weighted average exchange rate for the current year.

A

Foreign Currency Translation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
70
Q

Foreign Currency Financial Statements are remeasured into the Reporting Currency (Dollar) using the weighted-average exchange rate

A

Foreign Currency Translation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
71
Q

On the income statement as Other Income.

A

Foreign Currency Translation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
72
Q

To measure income

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
73
Q

The FASB Codification

All pronouncements fall under the Codification umbrella

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
74
Q

Authoritative and Non-Authoritative

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
75
Q

Managerial Accounting has a timeliness focus

Managerial Accounting is not required to follow GAAP

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
76
Q

Form 10K - Annual and Audited

Form 10Q - Quarterly and Reviewed

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
77
Q

Focus is on the needs of users to help them make decisions and assessments about the company

Does not make assessments of the economy

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
78
Q

Cost vs. Benefit

Materiality

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
79
Q

Consistency - Year vs. Year

Comparability - Company vs. Company

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
80
Q

Relevance & Faithful Representation

Relevance - Makes a difference to the user
Includes:
Predictive Value - Future Trends
Confirming Value - Past Predictions
Materiality - Could affect User Decisions

Faithful Representation
Includes:
Completeness - Nothing omitted that would impact the decision-making of a user
Neutrality - Information is presented is without bias
Free from Error - No material errors or omissions

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
81
Q

Comparability Verifiability Timeliness and Understandability

Comparability - Allows users to compare different items among various periods
Verifiability - Different people would reach a similar conclusion on the information presented
Timeliness - Information is made available early enough to impact the decision making of users
Understandability - Information is easy to understand

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
82
Q

When an estimate is necessary due to uncertainty conservatism chooses the best option that won’t overstate the financial position of the company

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
83
Q

Earned (Revenue) or Incurred (Expense) but no Cash Receipt/Outlay yet

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
84
Q

Cash Receipt/Outlay but not Earned (Revenue) or Incurred (Expense)

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
85
Q

When an item is recorded and included in the financial statements

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
86
Q

The price you would receive if you sold the asset

Assumes asset is at its highest and best value

Assumes asset is sold at its most advantageous market to get the best price possible

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
87
Q

Buyer and Seller are not Related

Buyer and Seller are Knowledgeable

Buyer and Seller are able to transact - i.e. This isn’t a hypothetical transaction for Fair Value measurement purposes. The buyer actually does have the $10M to purchase the asset you’re trying to value at $10M

Buyer and Seller are both motivated to buy/sell

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
88
Q

Price quotes or market prices

For example NYSE or NASDAQ

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
89
Q

Interest rates

Prime rate

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
90
Q

Unobservable inputs such as assumptions or forecasts

Lowest priority for valuation

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
91
Q

Market approach - uses market transactions and prices to value the asset

Income approach - uses present value discounts earnings

Cost approach - uses replacement cost to value the asset

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
92
Q

Cash

Inventory or Assets expected to be converted or consumed during a business’ operating cycle

Deferred Gross Profit on Installment Sales (Contra Asset)

Receivables expected to be collected in 12 months or less

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
93
Q

Liabilities that will use current assets during the present operating cycle

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
94
Q

Expense that has been incurred but not paid

Example: rents payable

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
95
Q

A type of current liability

Payments that have been received but cannot be recorded as revenue yet

Example: Tenant pre-pays rent - Landlord still must perform to earn it and is a liability until this happens

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
96
Q

When they have been earned; i.e. company has performed

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
97
Q

Increase in equity from an activity or event that is not central to the main activities of the business

Can be operating or non-operating

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
98
Q

Decrease in equity from an activity or event that is not central to the main activities of the business

Can be operating or non-operating

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
99
Q

Average time it takes to turn materials or services into Cash

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
100
Q

Valuation method - the current value of a future amount of money using a specific interest rate

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
101
Q

How much an asset cost - (net of depreciation and amortization)

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
102
Q

How much it would cost to reacquire an asset today (Entrance Cost)

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
103
Q

The sale price of an asset (Exit Cost)

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
104
Q

Sale Price of an Asset - Selling/Disposal Fee

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
105
Q

Recognized when earned

If the royalty % is applied against net sales then subtract the estimated return amount from the gross sales first and then apply the royalty rate

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
106
Q

Revenue recognized upon receipt of cash

Only used when cash collection is uncertain

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
107
Q

Gross Profit that can’t be recognized until cash is received

D.GP : Gross Profit % x Accounts Receivable

Pay attention to the year if GP% varies

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
108
Q

No revenue recognized until all costs are recovered from purchase of the asset

Most conservative method of revenue recognition when collection of sale price is uncertain

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
109
Q

Payment has been received but performance is not complete.

As company performs revenue is recognized.

Recorded as a Deferred Revenue (Liability) on Balance Sheet

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
110
Q

Franchiser - Startup franchise fee revenue deferred until substantial performance

Franchisee - Costs are deferred until corresponding revenue is recognized

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
111
Q

Mnemonic: SPEAR-BAR

Sales (i.e. Customer Payments)
+ Ending Accounts Receivable
- Beginning Accounts Receivable
: Sales Revenue on an Accrual Basis

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
112
Q

Mnemonic: CRAP-I

Cash Remitted (i.e. paid)
+Increase in Accounts Payable
-Increase in Inventory
:COGS on an Accrual Basis

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
113
Q

Reported Net of Tax after Continuing Operations but before Extraordinary Items

Company decides to cease operating a segment of its business

Includes Income (or loss) from the period plus the gain (or loss) from disposal

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
114
Q

Both unusual AND infrequent

Reported Net of Tax after Discontinued Operations

Note: Usual or Infrequent Items are reported as part of Continuing Operations

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
115
Q

Adjusts assets to reflect a consistent level of purchasing power due to inflation

Uses the Consumer Price Index (CPI)

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
116
Q

When they are incurred. Accrue if not yet paid.

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
117
Q

Those incurred but not paid.

Product costs - Expenses should be matched with associated revenues as they are recognized (sales commission on a used car sale)

Period costs - Expenses amortized and recognized with the passage of time

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
118
Q

Immediately.

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
119
Q

Office staff salaries

Office/building rent

Office supplies

Note: Sales staff salaries and portions of the building assigned to Sales should be allocated to Selling Expense not G&A

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
120
Q

One-time costs for opening a new business

Expensed as they are incurred

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
121
Q

Interest on projects (software) for internal use is not expensed but is instead capitalized

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
122
Q

Net Income + Other Comprehensive Income (OCI):

Revenues/Expenses

Gains/Losses

Cumulative accounting adjustments

Reclassifications adjustments

Non-owner changes in equity

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
123
Q

Foreign Currency Translation Adjustments

Unrealized gains on AFS Securities

Minimum Pension Liability adjustment for defined benefit plans

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
124
Q

Avoids double counting items that were included in both Net Income and OCI

Example: AFS Securities previously included in OCI are now sold at a loss and reported on the Income Statement

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
125
Q

Reported in a Single or Combined Income Statement

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
126
Q

Accounting Principles used

Basis of Consolidation

Inventory Pricing Methods

Depreciation Method

Amortization of Intangibles

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
127
Q

Nature of Operations

Use of Estimates and listing of Significant Estimates

Concentration vulnerability

A

Financial Reporting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
128
Q

Statement of Financial Condition & Statement of Changes in Net Worth

A

Personal Financial Statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
129
Q

Estimated current value

A

Personal Financial Statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
130
Q

Presented on Statement of Financial Condition between Liabilities and Net Worth

A

Personal Financial Statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
131
Q

Assets
- Liabilities
- Estimated taxes on assets sold
: Net Worth

A

Personal Financial Statements

132
Q

Only shown if there is cash surrender value

It is shown net of loans against the policy

A

Personal Financial Statements

133
Q

Business Interests that constitute a large percentage of total assets should be separated from other investments

A

Personal Financial Statements

134
Q

Interim period is a separate accounting period - not GAAP

Same accounting principles used for annual reporting should be used.

A

Personal Financial Statements

135
Q

Interim period is a part of the annual period - GAAP

Gross profit method may be used to estimate COGS and inventory

Temporary declines in inventory aren’t recognized

A

Interim Financial Statements

136
Q

Aren’t prorated

Fully recognized in Interim Period as incurred

If it occurs in Q3 - it’s recognized in Q3

A

Interim Financial Statements

137
Q

Reported as if they occurred in the first quarter

A

Interim Financial Statements

138
Q

If inventory experiences a decline in value during an interim period - the loss is recognized in the interim period

If the loss is expected to be only temporary - no loss is recognized

A

Interim Financial Statements

139
Q

The matching principle gets messed up - Expenses incurred in one period may benefit future periods

A

Interim Financial Statements

140
Q

Publicly traded companies

A

Segment Reporting

141
Q

Revenue of segment is 10% or more of total

Profit is 10% or more of total

Segment assets are 10% or more of total

75% Test - All segment revenues must equal 75% of total external revenues

A

Segment Reporting

142
Q

If 10% or more of enterprise revenue comes from one customer - the segment making the sales must be disclosed

A

Segment Reporting

143
Q

They are expensed in the period incurred and are not capitalized.

A

Fixed Assets

144
Q

All expenditures to get the building into working condition are ready for use

A

Fixed Assets

145
Q

All expenditures to get the land ready for its intended use:

Title & County Fees

Clearing of Land - Dirt work etc.

Demolition and removal of old buildings (minus any scrap or salvage)

Note: capitalized land costs are not depreciated

A

Fixed Assets

146
Q

If the cash flows from the assets exchanged are not significantly different no gain or loss is recognized on a non-monetary exchange as it lacks commercial substance.

The new asset is recorded at the book value of the asset given up.

The only gain that can be recognized is any boot (cash) received.

A

Fixed Assets

147
Q

If resulting cash flows are significantly different then the transaction has commercial substance and a gain/loss is recorded on the exchange.

The new asset is recorded at the FAIR VALUE of the assets given up unless the asset acquired has a fair value that is easier to determine.

A

Fixed Assets

148
Q

Recorded at Fair Value + costs associated with getting the property into working condition for its designed purpose

Exam Tip - Think of a charity holding afair and then donating the property which is then recorded atfair value

A

Fixed Assets

149
Q

Recorded at Fair Value of asset given up.

Gain or Loss is recorded.

A

Fixed Assets

150
Q

1 / (Useful Life x 2 x Book Value)

Ignore salvage value.

A

Fixed Assets

151
Q

(Cost - Salvage Value) x (Remaining Useful Life / SYD) : Depreciation expense

For example the depreciation factor for the third year of a 10-year asset would be:

: 8 / (10+9+8+7+6+5+4+3+2+1) : 8/55 : 14.5%

Remaining useful life : 8 SYD : 55

A

Fixed Assets

152
Q

(Cost - Salvage Value) / Useful life : depreciation expense

A

Fixed Assets

153
Q

When the un-discounted future cash flows are less than the carrying value of the asset.

Carrying Value - Fair Value : Impairment Loss

Note: impaired assets that recover their value can’t be written back up once written down

A

Fixed Assets

154
Q

If the patent is SUCCESSFULLY defended the legal fees are amortized over the patent’s economic life.

If unsuccessful they are expensed immediately.

A

Fixed Assets

155
Q

Compare the CV to the FV. If FV is greater than CV no impairment exists you’re done.

If impairment appears to exist the assets and liabilities should be compared to the total value of the reporting unit. The difference is Goodwill. Compare this amount to the CV of the Goodwill and write it down accordingly.

A

Fixed Assets

156
Q

Expenses prior to technological feasibility are expensed as R&D.

After technological feasibility but prior to production costs are capitalized.

Expenses incurred during production are charged to inventory.

Expenses incurred training on internal use software are expensed.

A

Fixed Assets

157
Q

All expenditures to get the asset into working condition and ready for use:

Purchase price + liabilities assumed
Shipping
Taxes
Insurance
Installation
Testing
Legal fees
Construction loan interest

Any alterations to existing facilities or equipment necessary for the new purchase and installation that extend the life or increase the efficiency of these assets are capitalized.

A

Fixed Assets

158
Q

Governmental, Proprietary, Fiduciary

A

Governmental Accounting

159
Q

Accrual basis - current economic resources focus (revenues recognized when earned)

Modified accrual basis - current financial resources focus (revenues recognized when available and measurable)

A

Governmental Accounting

160
Q

The highest amount allowed for a particular expenditure under a budget.

A

Governmental Accounting

161
Q

Records purchase and reserves it for the encumbrance.

A

Governmental Accounting

162
Q

Dr Estimated Revenues Control
Cr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)

A

Governmental Accounting

163
Q

Dr Appropriations Control
Dr/Cr Budgetary Fund Balance (plug)
Cr Estimated Revenues Control

A

Governmental Accounting

164
Q 
General Fund
Special Revenue Fund
Permanent Fund
Capital Projects Fund
Debt Service Fund
A

Governmental Accounting

165
Q

The operating fund of the governmental unit

Records Significant Revenues: Taxes; Tickets; Fines; Licenses

Records Significant Expenditures: Police; Education; Fire Dept

A

Governmental Accounting

166
Q

Restricted for a specific purpose such as street repair.

A

Governmental Accounting

167
Q

Legally restricted fund; where only earnings can be used to fund programs.

Principal remains intact.

A

Governmental Accounting

168
Q

Used to acquire and build facilities.

A

Governmental Accounting

169
Q

Handles repayment of long-term debt and related interest.

A

Governmental Accounting

170
Q

Balance Sheet

Statement of Revenues; Expenditures; and Changes in Fund Balance

A

Governmental Accounting

171
Q

When it is BOTH available and measurable; regardless of when it is spent.

A

Governmental Accounting

172
Q

Money collected from people doing things:

Sales tax (buying cars) or income tax (people working)

A

Governmental Accounting

173
Q

Tax assessed just because things exist

Example: property tax on a car (even if it’s never driven); real estate tax

Recorded as a revenue when BUDGETED.

Estimated uncollectible property tax revenues don’t offset revenues; so don’t net them.

A

Governmental Accounting

174
Q

Internal Service Funds - to serve the needs of other governmental units (i.e. motor pool)

Enterprise Funds - provide goods or services to external users (i.e. post office)

A

Governmental Accounting

175
Q 
Restricted - Restricted by Contributor 
 Committed - Restricted by Government
 Assigned - Intended for a purpose
 Unassigned - Available to be spent
 Non-spendable - Not in a spendable state
A

Governmental Accounting

176
Q

Agency Fund - government acts as an agent or custodian

Pension Trust Fund - Government is a trustee for a pension plan

Investment Trust Fund - Government is a trustee over a series of investments

Private Purpose Trust - Trust that benefits various individuals and entities

A

Governmental Accounting

177
Q

Assets (Current & Non-Current)
Deferred Outflows of Resources
Liabilities (Current & Non-Current)
Deferred Inflows of Resources

A

Governmental Accounting

178
Q

They are shown net of debt

Asset Cost - Accumulated Depreciation - Asset Liabilities : Net Assets

A

Governmental Accounting

179
Q

Modified approach:

Reported at cost; no accumulated depreciation

A

Governmental Accounting

180
Q

Into Governmental Activities and Business Activities

A

Governmental Accounting

181
Q

They are divided by function

If the activities of a component are distinguishable from the rest of the governmental entity; then discreet presentation is required

If the activities of the component cannot be identified and separated from the rest of the governmental activities; then blended presentation is warranted.

Component units are reported in the Entity-Wide Financial Statements and not the Fund Financial Statements.

A

Governmental Accounting

182
Q

To provide information that is useful and benefits a wide range of users including:

Costs of services provided

Sufficiency of revenues to cover costs

Financial position of entity

A

Governmental Accounting

183
Q

Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position

A

Governmental Accounting

184
Q

Assets; Deferred Outfows; Liabilities; Deferred Outflows; Fiduciary Net Position

A

Governmental Accounting

185
Q

Additions (Contributions and Net Investment Income) - Deductions (Benefits Payments and Admin Expense) : Net Change in Fiduciary Net Position

A

Governmental Accounting

186
Q

Types of Benefits; Plan Member Classes; Board Information; Investment Policies and FV Determination

A

Governmental Accounting

187
Q

The International Accounting Standards Board (IASB)

A

IFRS

188
Q

The International Financial Reporting Standards (IFRS) issued by the IASB

A

IFRS

189
Q

The IASB Framework

  • The framework is NOT a standard itself
  • The framework does not supersede any standard’s authority
A

IFRS

190
Q

To provide users with information on international accounting.

A

IFRS

191
Q

Entity is a Going Concern

Entity uses the accrual basis of accounting.

A

IFRS

192
Q

Relevance & Faithful Representation

Relevance - Makes a difference to the user
Includes:
Predictive Value - Future Trends
Confirming Value - Past Predictions

Faithful Representation
Includes:
Completeness - Nothing omitted that would impact the decision-making of a user
Neutrality - Information is presented is without bias
Free from Error - No material errors or omissions

A

IFRS

193
Q

Comparability - Allows users to compare different items among various periods
Verifiability - Different people would reach a similar conclusion on the information presented
Timeliness - Information is made available early enough to impact the decision making of users
Understandability - Information is easy to understand

A

IFRS

194
Q

Comparative information from prior year is required under IFRS.

GAAP requires that if multiple years are presented they are consistently prepared however it doesn’t require prior year comparative statements.

A

IFRS

195
Q

Cost vs. Benefit

A

IFRS

196
Q 
Asset
Liability
Equity
Income
Expense
A

IFRS

197
Q

Probable future economic benefit

Can be measured reliably

If the value or outcome cannot be measured reliably IFRS requires the use of the Cost Recovery Method.

A

IFRS

198
Q

A full comparative statement using IFRS.

A

IFRS

199
Q

January 1 2011 because a full year of comparative statements is required from the previous year

A

IFRS

200
Q

The Fair Value election

A

IFRS

201
Q

In the entity’s retained earnings or equity

A

IFRS

202
Q

Going Concern is an assumption under IFRS

A

IFRS

203
Q

IFRS doesn’t allow extraordinary items.

A

IFRS

204
Q

Completed contract method is not allowed under IFRS.

A

IFRS

205
Q

IFRS does not allow LIFO.

A

IFRS

206
Q

Statement of Comprehensive Income

Statement of Changes in Equity

A

IFRS

207
Q

Income is used instead of revenue and encompasses BOTH revenue and gains.

A

IFRS

208
Q

In IFRS the term profit is used instead of Net Income.

A

IFRS

209
Q

They are treated the same as revenue and are not separated on the financial statements.

A

IFRS

210
Q

In IFRS losses are treated the same as expenses but they ARE separated on the financial statements.

A

IFRS

211
Q

Under IFRS current liabilities can only be refinanced into a non-current liability if the refinance agreement is EXECUTED prior to the balance sheet date.

GAAP requires only intent to refinance not actual execution.

A

IFRS

212
Q

Under GAAP there are three classifications of contingent liabilities - Probable Reasonably Possible and Remote.

Under IFRS contingencies are uncertain future events and are classified as a provision if probable and measurable even if uncertain in timing or amount.

A

IFRS

213
Q

Bonds may be recorded on the Statement of Financial Position using one of two methods

Fair Value through profit or loss

  • Liability revalued at the end of each period
  • Gain or Loss recognized in period

Amortized Cost
*Using Effective Interest Method

A

IFRS

214
Q

They use the liability method - all deferred tax liabilities must be reported but only probable deferred tax assets can be reported.

They are non-current on the statement of financial position.

A

IFRS

215
Q

ONLY if they are related to the same country/taxing authority

For example China Deferred Tax Assets can’t offset Japan Deferred Tax Liabilities

A

IFRS

216
Q

The enacted rate or substantially enacted tax rate.

GAAP is the enacted tax rate only

A

IFRS

217
Q 
Income
Finance Costs
Tax Expense
Discontinued Ops
Profit/Loss
Non-controlling interest in Profit/Loss
Net profit/loss attributable from equity
A

IFRS

218
Q

Recorded at cost

Valued using either:

Cost model - asset carried at cost less accumulated depreciation and impairment loss

Revaluation model - asset adjusted to fair value less accumulated depreciation

A

IFRS

219
Q

Asset must be able to be reliably measured

Must be applied to whole class of assets not just one asset

No guidance on how often assets should be revalued under IFRS

A

IFRS

220
Q

Initially recorded at cost

Revalued using either Fair Value model or Cost model

A

IFRS

221
Q

Recorded on the Income Statement

Investment P/L : IS

PP&E P/L : OCI

A

IFRS

222
Q

Carried at Cost minus Accumulated Depreciation

Fair Value must still be disclosed in the notes to the financial statements

A

IFRS

223
Q

Operating Leases can be recorded as Investment Property if measured at Fair Value

All other investment property must use Fair Value Model if one asset uses it

A

IFRS

224
Q

Using either the Cost Model (cost less Accumulated Depreciation and Impairment Loss)

or

the Revaluation Model (Fair Value less Accumulated Depreciation)

A

IFRS

225
Q

It is not recognized.

A

IFRS

226
Q

If asset has a finite life it is amortized over useful life.

If asset has indefinite life it is not amortized but is tested for impairment at the reporting date.

A

IFRS

227
Q

If the substantial risks of ownership have passed to the Lessee then the Lease must be accounted for as a Finance Lease

A

IFRS

228
Q

Project-unit-credit method calculates the PV of the defined benefit obligation

A

IFRS

229
Q

They can be classified as either Operating or Financing

Once a classification is chosen all future costs must be classified there

A

IFRS

230
Q

They must be included in the notes to the financial statements.

A

IFRS

231
Q

Purchases - Net of Discounts, Freight, Warehouse expenditures

A

Inventory

232
Q

FOB Shipping Point puts the inventory into the hands of the buyer from the loading dock

A

Inventory

233
Q

FOB Destination keeps the items in the seller’s inventory until it reaches the buyer

A

Inventory

234
Q

Sales Commissions

Interest on liabilities to vendors

Shipping expense to customers

A

Inventory

235
Q

Under the gross method, discounts are recorded only when used.

A

Inventory

236
Q

Under the net method, discounts are recorded whether used or not.

Unused discounts are allocated to financing expense.

A

Inventory

237
Q

Gross Margin : Sales - COGS (BI + P - EI)

A

Inventory

238
Q

Inventory is counted at certain times throughout the period

Weighted-average cost flow method is used.

A

Inventory

239
Q

Inventory count continually updated

Uses a moving-average cost flow method

A

Inventory

240
Q

Under the FIFO system, periodic and perpetual inventory methods will both have the same ending inventory.

A

Inventory

241
Q

COGS / Average Inventory

A

Inventory

242
Q

365 / Inventory Turnover

A

Inventory

243
Q

The CONSIGNOR holds the consigned items in their inventory count. The cost includes the shipping to the consignee.

A

Inventory

244
Q

No. Consignment goods are maintained in the inventory of the consignor, not the consignee.

A

Inventory

245
Q

Misstatement of beginning inventory does NOT have an effect on ending retained earnings.

Misstatement of ENDING inventory does have an effect on retained earnings.

A

Inventory

246
Q

EI Over : COGS Under : ERE Over

EI Under : COGS Over : ERE Under

A

Inventory

247
Q

The first (oldest) inventory you have in stock is the first inventory you record for COGS purposes. If your oldest inventory on the shelf cost you $1 when you bought it, COGS is $1

This is just for inventory pricing. It has nothing to do with physically selling the oldest item on the shelf - It is purely for accounting purposes

A

Inventory

248
Q

The last (newest) inventory you have in stock is the first inventory you record for COGS purposes. If your newest inventory on the shelf cost you $1.50 when you bought it, COGS is $1.50

A

Inventory

249
Q

COGAS / Total Units : Weighted Average Cost Per Unit

A

Inventory

250
Q

FIFO’s relationship to COGS will be opposite LIFO’s relationship to COGS in periods of falling/rising prices.

A

Inventory

251
Q

FIFO has the Lowest COGS

FIFO is a cat that sees a mouse starts Low and is Rising

If COGS is Low, that means EI is High

A

Inventory

252
Q

FIFO has the Highest COGS

Remember: FIFO, that silly cat, got High from Catnip and is Falling off the couch

If COGS is High, that means EI is Low

A

Inventory

253
Q

Market Ceiling : Net Realizable Value : Selling Price - Selling Costs

Market : Replacement Cost

Market Floor : Net Realizable Value - Normal Profit

A

Inventory

254
Q

At Fair value as either Current or Non-current assets.

A

Investments

255
Q

Included in OCI (Other Comprehensive Income)

A

Investments

256
Q

HTM - Stockholder’s Equity
/ Trading Securities - Current Period.

A

Investments

257
Q

Amortized cost as Current or Non-current assets.

If reclassified as AFS - Unrealized G/L go to Stockholder’s Equity

If reclassified as Trading Securities - Unrealized G/L recognized in Current Period

A

Investments

258
Q

Trick question - Unrealized gains or losses are not applicable because they are HTM

A

Investments

259
Q

At Fair Value as a Current Asset

Unrealized gains/losses are recorded on the Income Statement

If they are reclassified as held-to-maturity or available-for-sale- there is no effect upon transfer.

A

Investments

260
Q

Recorded on the Income Statement

If they are reclassified as HTM or AFS - there is no effect upon transfer.

A

Investments

261
Q

Capitalize at cost: Asset & Liability Recorded at Present Value of Future Lease Payments

A

Leases

262
Q

Future minimum rental commitments

By year - for 5 years

All remaining years as a group

A

Leases

263
Q

Same as for lessee (Title- BPO or Substance)- PLUS:

Collectability of lease payments is predictable

No uncertainties about the lessor reimbursing the lessee for costs incurred

A

Leases

264
Q

Risk of ownership does NOT pass

No asset or liability is recorded on the financial statements

Leasehold improvements - capitalized and depreciated over the lesser of lease life or leasehold improvement’s life.

A

Leases

265
Q

Rent revenue recorded

Leased property remains an asset and depreciated by lessor

If payments fluctuate over the term of the lease- rent revenue recognized on a straight line basis

A

Leases

266
Q

Interest Revenue (or expense for lessor) decreases with passage of time

Principal amount increases with each payment

Carrying amount of Lease decreases

A

Leases

267
Q

Any profit on the sale is deferred and amortized

Exception: If PV of lease payments is 10% or less of the asset’s FMV- the gain is recognized

If PV of lease payments is greater than 10% of FMV and the lease is operating- all of the gain is recognized except the amount of the PV of the lease payments

A

Leases

268
Q

Payments begin at the start of the lease period

Think: Rent/Mortgage payments are Due at the first of the month

A

Leases

269
Q

Payments begin after the end of the first year

Think: An annuity that pays you at the end of each year

A

Leases

270
Q

Risk of ownership passes to lessee by:
Title,
Bargain Purchase Option (BPO),
Substance - Lease is more than 75% of asset’s useful life or PV of minimum lease payments are more than 90% of fair value

A

Leases

271
Q

Statement of Financial Position

Statement of Activities

Statement of Cash Flows

Statement of Functional Expense (Volunteer Health Organizations Only)

A

Not For Profit Accounting

272
Q

Similar to Balance Sheet:

Assets
Liabilities
Net Assets
Unrestricted Assets
Permanently Restricted Assets
Temporarily Restricted Assets

A

Not For Profit Accounting

273
Q

Similar to an Income Statement - organization - wide:

Revenues
Expenses - ONLY deducted from Unrestricted Revenues
Gains and Losses
Changes in Net Asset classes
Unrestricted
Permanently Restricted
Temporarily Restricted

A

Not For Profit Accounting

274
Q

Both direct and indirect methods are OK

Operating Activities - Unrestricted Revenues and Unrestricted Expenses

Investing Activities

Financing Activities - Endowments and restricted contributions

A

Not For Profit Accounting

275
Q

Volunteer Health Organizations

A

Not For Profit Accounting

276
Q

Balance Sheet
Statement of Operations
Statement of Changes in Net Assets
Statement of Cash Flows
Financial Statement Notes

A

Not For Profit Accounting

277
Q

Accrual basis of accounting is used

Only external parties can restrict the use of assets (permanent or temporary)

Assets earmarked internally by management are still classified as unrestricted

A

Not For Profit Accounting

278
Q

No restrictions or conditions placed on entity in order to use the resources

Note: assets earmarked internally by management are still unrestricted

A

Not For Profit Accounting

279
Q

Revenues on contributions are recognized in the year received - not the year the contribution is spent and are recorded at Fair Value on the date received

A

Not For Profit Accounting

280
Q

If the organization would have otherwise paid for them

or

They increase the value of a non - monetary asset

A

Not For Profit Accounting

281
Q

NO.

It is disclosed in the notes to the financial statements only.

A

Not For Profit Accounting

282
Q

Classified as revenue in the current year only - multi - year future contributions fall under Temporarily Restricted.

A

Not For Profit Accounting

283
Q

Expenses ONLY deducted from Unrestricted Revenues - not Temporary or Permanently Restricted Revenues/Assets

A

Not For Profit Accounting

284
Q

Use is restricted to a future time - which could then convert to unrestricted - Class: Temp. Restricted Revenue

Unrestricted contributions promised (including multi - year contributions) - but not yet received are actually restricted by time and are therefore classified as Temporarily Restricted Assets - Multi - year contributions are recorded at the present value of the future contributions

A

Not For Profit Accounting

285
Q

Use of investment is restricted - but income from investment could be either restricted or unrestricted

Must be under control of receiving entity (Quasi Endowment) in order to be recorded in unrestricted net assets

Otherwise - a memo entry is recorded

A

Not For Profit Accounting

286
Q

Not recognized as assets or contribution revenue if they are held of display or education’ or their sale results in the purchase of similar items

A

Not For Profit Accounting

287
Q

Temporarily restricted assets are used before Unrestricted assets.

A

Not For Profit Accounting

288
Q

Classified as a Liability

Promise to contribute assets pending on certain conditions being met

Becomes unconditional once the possibility that it won’t happen is remote

A

Not For Profit Accounting

289
Q

Fair Value is mostly used

Exception - Equity method used when significant influence exists

A

Not For Profit Accounting

290
Q

As a reduction of revenue - netted against college’s tuition

A

Not For Profit Accounting

291
Q

Depreciation expense is allocated proportionately to various functions

A

Not For Profit Accounting

292
Q

Calculating the capital balance when property contributed has a mortgage results in the FV of the Asset being netted against the Liability

A

Partnership Accounting

293
Q

The bonus method:

Old Partnership Equity+ New Partner Contribution
: New Partnership Equity
x New Partner %
: New Partner Equity AmountNew Partner Contribution - New Partner Equity Amount
: Bonus to Prior Partners using same allocation as P/L

A

Partnership Accounting

294
Q

Using the goodwill method:

New Contribution / New Equity % : Partnership Value

Implied Value of Partnership - Capital Accounts of all partners
: Goodwill to Old Partners

Under the Goodwill Method - the new Partner is paying an amount for a certain percentage stake in the partnership. For instance if they pay $1000 for a 25% stake - then it is assumed that the Partnership is worth $4 -000 ($1 -000/25%)

A

Partnership Accounting

295
Q

Fair Value for assets contributed.

Present value of remaining cash flows for liabilities assumed.

A

Partnership Accounting

296
Q

Cash received from Customers- Interest & Dividends- Trading Securities

Cash paid to Vendors- Suppliers- Interest- Taxes- Trading Securities

A

Statement of Cash Flows

297
Q

Cash received: Sale of PP&E- Sale of Investments- Loan Principle

Cash paid: Loans- Acquisitions- AFS or HTM Securities- Taxes- Trading Securities

A

Statement of Cash Flows

298
Q

Cash received: Issuance of Stock- Issuance of Debt

Cash paid: Dividends

A

Statement of Cash Flows

299
Q

Starts with Income from Continuing Operations

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

If used- the Indirect Method must also be shown

A

Statement of Cash Flows

300
Q

Starts with Net Income

Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses

A

Statement of Cash Flows

301
Q

APIC for each is allocated by its respective % of the total FMV of the shares x the proceeds.

A

Stockholder’s Equity

302
Q

APIC increases on date subscription is recorded - not on the date paid for or issued

A

Stockholder’s Equity

303
Q

It will be restricted to the extent of the balance in the Treasury Stock account.

A

Stockholder’s Equity

304
Q

They are not accrued until declared.

A

Stockholder’s Equity

305
Q

If a year passes and no Cumulative Preferred Stock is declared- then the dividends in arrears are included as a disclosure - not an accrual in the Financial Statements.

A

Stockholder’s Equity

306
Q

The gain or loss is the difference between the FMV of the asset distributed at the date of distribution and its carry amount on the company’s books

A

Stockholder’s Equity

307
Q

The effect on Retained Earnings is the Carrying Amount of the asset

RE will be debited when the dividend is declared for the FMV of the asset- which is more (or less) than the carrying amount

Gain/Loss recorded when the asset is distributed will offset the original effect of the debt to RE and will be a wash

The net effect of the entry is that RE will decrease by the CV of the asset

A

Stockholder’s Equity

308
Q

When Stock Dividend is less than 25% of Common Stock outstanding

A

Stockholder’s Equity

309
Q

When Stock Dividend is greater than 25% of common stock outstanding

A

Stockholder’s Equity

310
Q

Stock dividends and stock splits both have no effect on Total Shareholder Equity

A

Stockholder’s Equity

311
Q

Stock splits only affect par value - APIC remains the same.

A

Stockholder’s Equity

312
Q

Compensation expense is recorded at the time of grant if options are exercisable immediately

They are based on past service.

Expense recognized : FV Stock Option x # of Shares

A

Stockholder’s Equity

313
Q

The risk-free interest rate

A

Stockholder’s Equity

314
Q

The settlement date.

A

Stockholder’s Equity

315
Q

Compensation costs for share-based payments classified as liabilities are measured by the change in the fair value of the instrument for each reporting period

A

Stockholder’s Equity

316
Q

Net increase to SHE : Gain on settlement of debt + Credit to SHE from stock issuance

A

Stockholder’s Equity

317
Q

To eliminate a deficit balance in RE by restating its assets to Fair Value

It does not directly protect a company from its creditors

A

Stockholder’s Equity

318
Q

(Net Income - P/S Dividends) / Average Common Stockholders Equity

Note: Average CSE : Common Stock + RE

A

Stockholder’s Equity

319
Q

Total Common Stock
- Total Preferred Stock
- P/S Dividends in Arrears
- P/S Liquidation Premium
:Total Book Value

Book Value per Share : Total Book Value / Shares outstanding

A

Stockholder’s Equity

320
Q

Dividends per share / earnings per share

A

Stockholder’s Equity

321
Q

(Net Income - Preferred Dividends) / Average C/S Outstanding

Note - If cumulative- subtract the P/S dividend regardless of whether or not they’re declared.

A

Stockholder’s Equity

322
Q

For EPS purposes- treat C/S stock splits or stock dividends as if they occurred at the beginning of the year- regardless of when actually issued during the year

A

Stockholder’s Equity

323
Q

EPS is only required to be shown for Income from Continuing Operations and Net Income.

All others (discontinued operations- extraordinary items) can be shown on the Financial Statements or in the notes

A

Stockholder’s Equity

324
Q

Only if they are dilutive.

Their exercise price is LESS than the market value

If not- you ignore them in the calculation

A

Stockholder’s Equity

325
Q

[Net Income + Bond Interest (Net of Tax)] / (Average Common Stock Shares + Convertible Equivalents)

Bond interest is added back because if converted- there would be no bond interest expense

Contingent Issue Agreements are included in Diluted EPS if contingency is met

A

Stockholder’s Equity

acc (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions