BAR Exam Deck 4 Flashcards
How to determine whether a business segment is reportable?
Find the total revenue which includes unafficiliated and intercompany sales
Individual Segment Revenue/Total Revenue
If it is greater than 10% then report it
The coverage test has to be met as well which is 75% of sales to unaffiliated customers
How to determine whether a segment of an enterprise should be reported in the enterprise’s financial statements for assets/liabilities?
The segment’s assets constitute more than 10% of the combined assets of all operating
What is the key thing to remember when it comes to operating profit by segments?
It is based on the profit reported to the chief operating decision maker
How to determine whether to to disclose major customer data in the financial statements?
If sales to a single customer are greater than 10% of total sales
_________ _______ is computed as contribution margin net of controllable costs. Controllable costs represent those fixed costs that managers can impact in less than one year.
controllable margin
Employee training, Inspection expenses-preproduction, process redesign, and product redesign costs
Prevention costs
Inspection expenses-postproduction, lab maintenance, product testing
appraisal costs
Rework, Scrap, tooling changes
Internal failure costs
cost of returning goods, liability claims, warranty costs
external failure costs
Financial statemements required for a defined benefit pension plan
Statement of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Statement of Accumulated Plan Benefits
Statement of Changes in Accumulated Plan Benefits
What type of costs do businesses use a flexible budget?
When the costs are variable
Examples: Marketing expense, direct materials
Fixed cost would not use a flexible budget because the total cost would be the same regardless of the units produced or price
What are two types of way for a business to create a budget and which one is faster?
Participative budgeting requires more people in the organizationt to participate
Authoritative budgeting is top down which is faster
What happens to the quantity of labor demanded and the quantity of labor supplied when the minimum wage increases?
Draw a demand/supply curve for this and where the price would increase
Imagine it being a horizontal line where the price would increase
This would increase the quantity of labor supplied
It would decrease the quantity of labor demanded
How do you account for stock registration fees?
Registration fees will redcue the APIC account
CR: C/S = par value * # of shares issued
CR: APIC = (Issue price - par value * # of shares issues) - registration fees
What are these types of risks related to: Purchasing power, Translation Exposure, Economic exposure, Transaction exposure
Purchasing power relates to inflation
Translation exposure relates to gains or losses on f/s based on exchange rates differences
Transaction exposure related to transactions settled in different currency
Is variable costing or absorption costing used by GAAP and what happens when you produce more than you sale?
Absorption costing
Inventoriable cost for absorption costing included fixed manufacturing overhead
When you produce more than you sale variable costing cost of sales will be higher
The reason for this is because foh is a period cost and is always included in cost of sales for variable costing
How to calculate variable overhead efficiency variance?
Budgeted variable overhead based on standard hours - budgeted variable overhead based on actual hours?
Example:
Actual # of units manufactured: 19,000
Actual Direct Labor hours: 2,100
Direct labor hours budgted per frame: 0.1
VOH cost: $2 per direct labor hour
(190000.12)-(2100*2)
What is the journal entry to record estimated revenues, appropriations control, and budgetary control for a gov’t fund at the beginning of the year?
DR: Estimated Revenues
CR: Appropriations control
CR: Budgetary control
What is the rule for when to recognize revenue for fund financial statements?
Collections during the year plus the collection within 60 days of year end
What are things that are considered expenditures for governmental fund financial statements?
Capital purchases
debt service payments
operating expenditures
What are considered other financing sources for governmental funds?
Transfer in from other funds
How to close the estimated revenues control account at year end?
DR: Appropriations control
CR: Estimated revenues control for initial amount
What is the beginning of the year journal entry: Estimated revenues: 80 Appropriation 100
DR: Estimated Revenues 80
CR Appropriations 100
DR: Budgetary Control (plug figure) 20
What is the journal entry to close out estimated revenues, appropriations control, when control exceeds revenues estimated?
DR: Appropriations control
CR: Estimated revenues
CR: Budgetary control