Brainscape's Knowledge GenomeTM

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


See full index

FAR > All the goodies > Flashcards

All the goodies Flashcards

1
Q

Qualitative characteristics and components (Adjectives)

A

Faithful Representation
1. Completeness
2. Neutral
3. Free From Error
Relevance
1. Predictive Value
2. Confirmatory Value
3. Material

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

Enhancing Characteristics

4 things

A
  • Comparability
  • Verifiability
  • Timeliness
  • Understandability

(all the ‘Ity and time) NOUNS

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

3 Main aspects of Financial Reporting

A

Recognition, Measurement, Disclosure

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

Other Comprehensive Income

A
  • Unrealized gains or losses on AFS Securities
  • Unrecognized gains or losses from pension costs
  • Foreign currency translation adjustments
  • Unrealized gains or losses from derived transactions
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Comprehensive Income

A

Net Income + OCI = Comprehensive income

Show a total picture of all operating income, gians, & losses

Accumulated OCI in shareholder equity of BS

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

Legal authority to establish US GAAP

A

Securities Exchange Commission

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

Current standard-setting body

A

FASB

SEC allows the profession to establish US GAAP and self-regulate

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

Single source of authoritative nongovernmental US GAAP

A

Accounting Standards Codification

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

Full Set Financial Statements

A
  • Balance Sheet
  • Income Statement
  • Comprehensive Income
  • Cash Flows
  • Changes in owners equity

BS = Stmt Financial Position
IS = Stmt of earnings

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

EVTUO

Present Value Measurement

5 Elements (EVTUO)

A
  • E: Estimate of future cash flow
  • V: Timing Variations of FCF
  • T: Time value of money
  • U: Price of Uncertainty
  • O: Other factors
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Multi step IS vs Single step IS

A

Multi separates operating and non operating and other gains and losses

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

What is the appropriate characterization of the net assets of a nongovernmental not-for-profit organization?

A

Residual interest

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

N-F-P Conditions

A

Measurable performance related barriers or other barriers. Right of return must be present.

Measurable: specific outputs or outcomes, levels of service, matching, outside events or contingencies.

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

NFP Rev Rec

Pledges without donor restrictions

A

Net of allowance, displayed as Inc. to net assets with donor restrictions due to implied time restrictions.

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

Encumbrances

A

Open purchase orders that represent a committment of available appropriations.
Debit: Encumbrances Credit: Budgetary Control

Not a liability or expenditure

Not Identified on the face of gov fund’s external financial statemenets but may be disclosed.

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

Deferred outflows and inflows

A

Outflows: (+) effect on net position
Inflows: (-) effect on net position

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

GRaSPP

A
  1. General
  2. Special Revenue
  3. Debt Service
  4. Capital Projects
  5. Permanent
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

SE

A
  1. Internal Service Fund
  2. Enterprise Fund
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

CIPPOE

A
  1. Custodial Funds
  2. Investment Trust Funds
  3. Private Purpose Trust
  4. Pension and Other Employee Benefit Trust Funds
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

BAE

A

Governments record and reverse activity and encumbrances

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

Encumbrances- Goods received

A

Reverse original entry and record to expenditures and Vouchers Payable

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

Without donor restrictions

A

Recognized net of uncollectibles. If pledge is more than actual, the difference is basically a time constraint.

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

Government Liabilities

A

Gov entity reports only current liabilities to the extent available in expendable resources. No long term liabilities reported.

Current Financial Resource; Modified Accrual

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

Government-Wide Fin Stmts

A

Presented on the full accrual basis. Regardless of availability. Not available = deferred inflow or outflow.

Fund are modified accrual - Available and measurable

Shows debt that is not included in the funds. Example: special assessment.

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

Debt Service Fund

A

Account for the accumulation of resources for, and payment of, principal and interest for general debt for gov funds.

Not for fiduciary funds or proprietary funds

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

Extraodinary events

A

unusual and infrequent

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

Special Revenue Fund

A

Revenues that are legally restricted to expenditure for specified purposes.

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

Intrest and principal on long term debt

A

Recorded when they become due and payable, not the general rule of “measurable”

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

Government Wide Financial Statements

A

Reported using economic resource measurement focus. Showing long term liabilities. Displays gov and enterprise only, not fiduciary.

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

Gov Wide Net Position Classifications

A
  1. Net investment in capital assets
  2. Restricted
  3. Unrestricted
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Non Gov. N-F-P

Operating cash flows

A

Agency trans., cash contributions without donor restrictions, program income, investment income (Div/Int)

General fund accounts for all financial resources unless required to be in another fund.

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

Gov Reporting Standards

GASB 34

A

Includes basic financial statements and supplementary info.
* Basic = gov-wide fin stmts, fund fin stmts, notes to the financial stmts.
* Supplementary = MD&A, a few other things

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

SELF

Governmental Unit

A
  • Separately
  • Elected governing Body
  • Legally separate entity
  • Financially independent status

Blended: Not separate
Discrete: (separate column) fail blended criteria

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

CANS

Measurement focus differences

A
    • Capital assets net of
  • (-) Accumulated depreciation
  • (-) Non-current liabilities
    • Service (internal service fund) net position

Reconciliation between fund and fov wide financial statements

Non-current assets and liabilities are excluded in funds but still need to be on gov wide presentation.

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

CPAS RIDES

Reconciliation of Changes

A

Change in gov fund balances
* C: Capital outlay (+)
* P: Principal payments LT debt (+)
* A: Asset disposals
* S: Sources (other financiing) (-)
* ()
* R: Revenue - sales tax (+)
* I: Interest expense (-)
* DE: Depreciation expense (-)
* S: Internal service fund

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

Notes and Supplementary Info

GASB 34

A
  • Budget comparison schedules - general and major special revenue funds
  • Schedules include: original and final budget, actual inflows, outflows, and balances
  • Variances are optional
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Equity, EPS, Cash Flows

Stock Compensation Formula

Total Cost

A

Total compensation cost = market price of the share on date of grant x number of restricted shares awarded.

Compensation is expensed (allocated) over the period of service.

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

EPS

A

(Net Income - Preferred dividends) / (WACSO = Total shares x period outstanding)

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

OWNES

Operating Lease v Financing Lease

A
  1. Ownership - transfers at end of lease
  2. Written Option - purchase reasonably certain
  3. Net Pesent Value - lease payments is most of the asset value (90%)
  4. Economic Life - lease term major part of UL (75%)
  5. Specialized - no alternative use to lessor

No to all = Operating

No to any = Operating

Yes to any = Finance; No to any = Operating

Finance Lease/ Sales-Type Lease
or… Operating/ Operating

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

Commencement Date

A

Date the underlying asset is made available to the lessee for use

Lease payment start date does not matter

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

Lease Receivable

A

Minimum lease payments PLUS any residual value

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

Lease Obligation - Principal

A

Lessee should use the rate implicit to discount cash flows. Annuity = periodic payment x PV of ordinary annuity.

I dont think the incremental borrowing rate matters in anything…

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

ROU Asset (Operating Lease)

Periodic Payment

A
  • Beginning of period = PV of an annuity due (generally)
  • End of period = PC of an annuity (ordinaty/arrears)

Initial Entry - DR: ROU CR: Lease Liability
Subsequent Entries - DR: Lease expense CR: Cash/lease liability
DR: Lease Liability CR: Accumulated Amortization - ROU asset

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

Right of Use Asset

A

Amortized beginning on the commencement date using straight line.

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

Derivative Characteristics

A
  1. One or more underlyings, and one or more notional amounts or payment provisions or both
  2. Requires no initial investment or one that is smaller than alternatives
  3. Terms require or permit a settlement

Includes: Futures, forwards, options, swaps

Financial instrument that derives value from the value of some other instrument

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

Foreign Currency

Functional Currency

A

Currency of the primary economic environment in which the entity operates. Usually local currency or reporting currency.

Capital accounts are translated using functional currency

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

Lease Expense

A

Must be reported on a straight line basis. When they fluctuate, the average rate needs to be calculated.

Watch the dates, if lease begins in June… June 1 to December 31 is SEVEN months

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

Leasehold Improvements

A

Amortize over the life of the improvements or the remaining life of the lease, whichever is shorter.

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

Lease Liability

A

Components
* Payment
* Interest
* Decline in liability

Capitalize using implicit rate

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

Lease Liability Rule

A

Finance leases should be recorded as both an asset and a liability at the PV of minimum lease pmts. The asset is depreciated. The liability is amortized using the interest method where the payment is allocated between principal and interest and reduced by the principal reduction. The liability is segregated between current and non current where the reduction each year = the current liability at the end of prior year.

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

Finance Lease

A

Lessee amortizes the asset over the economic life if there is a purchase option or when lessee takes ownership at the end of the lease term.

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

Stock Dividend

A

Treated as if it happened ay the beginning of year.

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

Income Tax

Intraperiod Tax Allocation

A

Book doesnt make any fucking sense on this.

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

Primary objective of accounting for income taxes?

A

Inter-period tax allocation is to recognize the amount of current and future tax related to events that have been recognized in financial accounting income.

FASB/GAAP vs IRS Code

Asset and liability approach (balance sheet approach)

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

Commencement Date

A

When lease expense starts. Doesnt matter when they start paying, what matters is when the underlying asset is made available.

56
Q

Variable payment Operating lease

A

The lessee shall record an operating lease as lease expense using the straight line basis. Variable payments are calculated for the PV of the lease liability and expensed. There is no separate interest component.

57
Q

Payables and Acrued Liabilities

Debit balance in AP

A

Just cuz it is recorded, doesnt mean it is always right. Need to look for context clues. This includes adjusting entries.

58
Q

Compenastion Liability

A

If the terms attribute all or a portion of future benefits to service greater than one year, the cost (payment) is recognized over the required period of service.

59
Q

Short term liability.

A

Can use equity (common stock) as a way to refinance and it does not hit equity account. It hits the liability accounts.

60
Q

Gain Contingencies

A

Not reflected in the financial statements, but can disclose as a note. Record when realized.

61
Q

Concept of conservatism

A

Anticipate all losses but not gains.

62
Q

Loss Contingencies

A

Accrue if reasonable estimate can be made and “probable”. If only a range is provided, use the minimum value.

If Possible, just disclose

Could be a subsequent event and therefore be included assuming the fin stmts have not been sent out.

63
Q

Long Term Liabilities

Total Payment

A

Total Payment = principal and intrest multiplied by the present value of 1.

PV = Future amount x PV Factor

64
Q

Annuity

A

Transactions that result in identical periodic payments.

65
Q

Ordinary Annuity

“Annuity in arrears”

A

Payments are made at the end of each period.

66
Q

Annuity Due

A

Payments occur at the beginning of each period.

67
Q

Noninterest bearing notes payable

A

Reported at the present value of future cash flows.

68
Q

Current Maturities of Long term debt

A

Current Maturities of Long term debt in the balance sheet should include amounts due and payable within 12 months of the balance sheet date.

Includes term notes due within one year and principal payments due in one year. Anything held to term more than 1 year is not included.

69
Q

Bonds Part 1

Detachable Stock Warrants

A

The fair value of the warrant are separated from the issue price of bonds, i.e. stand-alone value.

70
Q

Serial Bonds

A

Mature in installments. Opposite of term bonds.

71
Q

Debenture Bonds

A

Unsecured corporate bonds, I think they can be either term or serial.

72
Q

GAAP Interest Expense

A

GAAP Interest expense = carrying value at beginning of the period X effective periodic interest rate.

73
Q

Stated Interest Expense

A

Stated interest = Amount stated on bond.

Not the same as GAAP Interest Expense.

74
Q

Bond Liability

A

SHown on the balance sheet net of unamortized discount.

(Carrying amount)

75
Q

Bond Interest Price

Maturity value; Annuity

A

Bond issue price is the sum of the pv of the maturity value (using principal) and the interest payment annuity.

So two calculations: PV of maturity value and interest annuity.

76
Q

Prevailing Market Rate

A

The prevailing market rate of interest is used to discount both the principal and annuity.

Remember, the rates usually need to be divided by two to refelct how the annual interest payments are made (semi annually).

77
Q

Bond discount

A

Bonda payable is recorded at the face amont and the discount is debited to “discount on bonds payable and the remainder is cash.

DR: Cash 49k
DR: Discount on bonds payable 1k
CR: Bonds paable 50k

78
Q

Bond Amortization

A

Amortization causes the carrying value to approach the face falue.

Discount amort. inc. liability; Premium amort. dec. liability

79
Q

Amortization of Premium

A

Amortization of Premium is the difference between interest expense and cash payment.

Reduces the carrying value

80
Q

Bonds

Interest Expense

A

Interest expense = Carrying value x market %

CV = face +/- premium/discount

81
Q

Cash Payment

A

Cash Payment = Face Value x coupon %

82
Q

Bond Stuff

Bond Amortization

A

This makes complete sense now. If you have a premium you need to recognize the cost in some way. This is done by taking the difference between what you expense as interest and what you actually pay in cash. That difference is the amortized portion of the remaining premium. The remaining premium is unamortized so thats why you reduce that.

83
Q

Translation Adjustments

A

Not included in determining net income for the period but are disclosed and accumulated as a component of OCI in consolidated equity.

84
Q

Remeasuring G&L

A

Included in income from continuing operations.

85
Q

Consolidations

A

All majority owned subsidiaries to have one management and one economic entity. Consolidate when a parent-subsidiary relationship is formed (typically when an entity has control or more than 50% of the voting stock)

Do not consolidate if in bankruptcy; consolidate in a vertical chain (sub is parent over another entity)

86
Q

Consolidation or equity method?

A
  1. Consolidation - control or over 50% of voting stock
  2. Equity - 20-50% ownership or significant influence
87
Q

Goodwill impairment GAAP

A

Carrying mount of REPORTING UNIT compared with the fari value of REPORTING UNIT. If CV > FV, there is an impairment loss. Loss equals the difference but cannot exceed goodwill currently reflected on the balance sheet.

88
Q

Acquisition Method

A

Eliminate subsidiary equity. Add assets and liabilities to books at fari value.

Acquisition costs are expensed as incurred.

89
Q

Non-Controlling Interest

A

Beginning NCI + NCI share of sub net income - NCI share of sub dividends = ending NCI

Cash dividend decreases NCI and no effect on RE of parent (entry is eliminated in consolidations)

90
Q

Consolidated Liabilities

A

Any company that is > 50% owned should be included in consolidated financial statements.

All of it, not just %owned of the liabilities

91
Q

Consolidated SE

A

As date of acquisition, the consolidated equity will be equal to the parent company’s equity plus the FV of any NCI. Subsidiary equity accounts are eliminated.

92
Q

Stockholders Equity - Subsidiary

A

Subsidiary equity accounts are eliminated in consolidations.

93
Q

Investments

A
  • Equity Method: Investor exercises significant inflence over an investee
  • Consolidated Method: Investor ownership has control
  • Fair Value Method: Neither significant influence or control
94
Q

Equity Method

Goodwill

A

No accounting necessary. Any goodwill is ignored under the equity method. The entire investment is subject to an impariment test.

95
Q

Equity Method

A

Questions are mostly calculating the investment and asking how situations impact the investment and financial statements. Can be compared against fair value.

96
Q

Costs Counted in Inventory

A

Direct and Indirect materials and labor, insurance/ other product costs (inventoriable costs).

Advertising is not included

97
Q

Inventoriable costs

A

Include any cost required to get an inventory item in a state where it is ready to be sold.

98
Q

Goods Held on Consignment

A

While an agent (Consignee) will hold and sell goods on behalf of the consignor until the inventory is sold, the seller (consignor) will include in his inventory because title and risk of loss are retained by the consignor.

99
Q

Goods and Materials to be included in inventory.

A

If the company has legal title, typically follows possession.
Exceptions
* In transit
* Nonconforming
* Consigned
* Public Warehouse
* Sales with mandatory Buyback
* Installment

100
Q

Inventory Valuation Methods

A
  1. Cost
  2. Lower of Cost or Market
  3. Lower of Cost and NRV
101
Q

Lower of Cost and Net Realizable Value

A

The lower of cost and net realizable value principle may be applied to a single item, a category, or total inventory, provided that the method most clearly reflects periodic income.

all inventory that is not costed using LIFO or the retail inventory method.

102
Q

Net Realizable Value

Market Ceiling

A

Net realizable value is an item’ s net selling price less the costs to complete and dispose of the inventory. Net realizable value is the same as the" market ceiling" in the lower of cost or market method.

103
Q

Lower of Cost or Market

A

The lower of cost or market principle may be applied to a single item, a category, or total inventory, provided that the method most clearly reflects periodic income.

Under U. S. GAAP, the lower of cost or market method is used when inventory is costed using LIFO or the retail inventory method.

104
Q

Market Value

A

Under U. S. GAAP, the term market in the phrase lower of cost or market generally means current replacement cost( whether by purchase or reproduction), provided the current replacement cost does not exceed net realizable value( the market ceiling) or fall below net realizable value reduced by normal profit margin( the market floor).

105
Q

Inventory Definitions

A

Market Value Under U. S. GAAP,
* market value is the median( middle value) of an inventory item’ s replacement cost, its market ceiling, and its market floor.
* Replacement Cost Replacement cost is the cost to purchase the item of inventory as of the valuation date.
* Market Ceiling Market ceiling is an item’ s net selling price less the costs to complete and dispose( called the net realizable value).
* Market Floor Market floor is the market ceiling less a normal profit margin.

106
Q

FIFO v LIFO

A
  • In periods of rising prices, the FIFO method results in:
    1. the highest ending inventory,
    2. the lowest costs of goods sold, and
    3. the highest net income( i. e., current costs are not matched with current revenues).
  • The use of the LIFO method generally better matches expense against revenues because it matches current costs with current revenues; thus, LIFO eliminates holding gains and reduces net income during times of inflation.

RIsing Prices - LIFO = Lowest

107
Q

Cost Flow Assumptions

A
  1. Specific Identification
  2. FIFO
  3. LIFO
  4. Weighted Average
  5. Moving Average
  6. Dollar Value LIFO
108
Q

PP&E Cost Basis

A

Rule: Capitalize all costs necessary to put a fixed asset in place, the required condition, at the proper time for its intended use.
Rule: Capitalize costs that improve the quality, efficiency, or productive capacity of a fixed asset
Interest capitalization: ends when asset is complete and ready for use.

109
Q

Nonmonetary Transactions

A

Under US GAAP, nonmonetary echanges that have commercial substance are recorded using fair value.

Gains and losses recognized immediately

110
Q

Commercial Substance

A

Means a transaction that does not involve money changes the economic position of either party.

111
Q

Intangie Assets - Easy as Shit

A

Obviously, intangible assets should be amortized over the lesser of the useful life or the legal life

Straight Line Method

112
Q

Patent

A

Capitalized amounts include application and successful defense of patent. DEVELOPMENT COSTS are a direct expense.

113
Q

FV Measurement

Choosing Markets

A

Go with principal market. Principal market has the greatest activity. When there is none, choose most advantageous market by comparing net prices. Net price is quote - trans cost. QUOTE is used to measure

114
Q

Partnership Asset Contributions

A

Assets contributed by partners to a partnership are valued at fair market value, net of related liabilities.

115
Q

Reportable Segments

A

A segment is considered reportable if its reported revenue, including sales to unafilliated customers and intersegment sales, is 10% or more of the combined revenue (unaffiliated and intersegment) of all operating segments.

Size test

116
Q

Special Purpose Framework

OCBOA

A

Non-GAAP presentations that include other bases of accounting such as cash basis and modified cash basis. Statement of cash receipts and disbursements.

Cash Basis mostly

Example: Income Tax Basis - recognize events when recognized on the tax return.

117
Q

Working Capital

A

Current assets - current liabilities

118
Q

Current Ratio

A

Current Assets / Current Liabilities

Current assets: Cash, AR, Inventory

119
Q

Quick Ratio

A

Cash + Net AR + Marketable Securities / CL

Cash and equivalents

120
Q

Inventory Turnover

A

Sales/ Accounts Rec.

121
Q

Days in Inventory

A

Ending Inv. / (COGS / 365)

122
Q

Net Profit Margin

A

Net Income / Net Sales

123
Q

Fund Stuff

Capital Asset Purchases

A

Reported as financing activities

124
Q

Fund Stuff

Pass Key 1

A

The reconciliation of operating income to net cash provided by operations includes depreciation and changes in current assets and liabilities, but does not include adjustments for gains and losses because gains and losses and nonoperating items are not included in operating income.

125
Q

SEC Reporting

A

10-Q: registered companies; unaudited; GAAP, MD&A, Disclosures
Large Accel= >700M (10Q 40 days, 10K 60 days); Accel = >75M(10Q 75 days); Small = <75M

126
Q

8-K

A

Change in accounant IS REPORTED

I keep getting that one wrong over and over.

127
Q

Subsequent Events

A

An entity should not recognize subsequent events in the financial statements that provide information about events that did not exist at the financial stmt date. Disclose if it happened before issue of financials but dont account for it if it was not forseeable.

Recognize/ Disclose what was known

128
Q

Income Statement

A
  • Determining Profitability
  • Value for Investment Purposes
  • Creditworthiness

Performance for a period of time

129
Q

Multi Step

A

Reports operating revenues and expenses separately from nonoperating.

Enhances user information; just moves shit around.

130
Q

Nonoperating IS Items

A
  • Interest
  • Sale of securities, fixed assets
    *

Auxilary Stuff

131
Q

Operating IS Items

A
  • Sales
  • Cost of Sales
  • SG&A Expense
  • Depreciation Expense
132
Q

Selling Expenses

A
  1. Freight Out
  2. Salaries for Sales People
  3. Commissions
  4. Adertising
133
Q

General And Admin Expenses

A
  1. Officers Salaries and Insurance
134
Q

Unusual and Infrequent G/L

A

Reported separetely as income from continuing operations.
Ex: Large loss from Foreign currency translation, Union Strike, Gov seizure, Earthquake in unusual area.

If an event is common, do not separately disclose.

135
Q

Summary Of Sig Acc Policies

Notes to Financial Stmts

A

Disclose measurment bases and accounting principles i.e. depreciation methods, rev rec issues, basis of consolidation, amortization.

Does not include detailed dollar amounts or computations… supposed to be high level.

FAR (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions