Bar Exam Deck 6 Flashcards
What happens when you have an estimated gross loss for a construction project and revenue is recognized over time?
Recognize all of the estimated loss in the year that it is expected
If some loss was previously recognized then you would deduct this from the loss
According to COSO, which of the following provides oversight of an entity’s enterprise risk management?
board of directors
How to find the non-current debt for governmental activities for us in the government-wide financial statements?
Rollforward
Beginning general purpose debt
ADD
Finance lease
Less
Principal payments on general purpose debt
Amount due at signing of financing lease
ENDING: This will give you the ending balance
EXPLANATION BELOW
This was an mcq and the main call to the question was separating what would be included in governmental wide column and business like activities column
How to find the total consideration transferred for a business combination?
It is the total fair value of the consideration given
This includes the following:
Cash
Common stock
This also includes the fair value of the contingent consideration
What is a contingent consideration?
This occurs in a business combination when the buyer states a contingency that if the subsidiary has a certain amount of sales then they will receive money from the parent company
How to calculate midpoint price elasticity of demand?
(new-old)/(new+old) quantity
(new-old)/(new + old) price
How to calculate point price elasticity of demand
(new-old)/old quantity
(new-old)old price
Under what type of circumstance would an unappropriated (outstanding) encumbrance balance not be closed at the end of the accounting period for a governmental fund?
When the outstanding encumbrance balance does not lapse
How are cost treated in the preliminary project stage of a software package developed for internal use?
The costs are expensed as incurred
How are cost treated after the preliminary project stage of a software package developed for internal use?
The cost are capitalized and depreciated over the economic life of the product
When is a shortage created in economics?
When the maximum price is below the equilibrium point
When is a surplus created in economics?
When the minimum price is above the equilibrium point
An increase in the demand and the supply for a product will cause which of the following?
Draw out the supply and demand
p is on the y axis while q is on the x axis
THE EQUILIBRIUM QUANTITY WILL INCREASE
PRICE MIGHT INCREASE, DECREASE, OR STAY THE SAME
What are the four columns in the governmental wide statement of net position?
Governmental Activities
Business-type Activities
Total
Component Units
What are the components of the governmental funds net position?
NRCAU ACRONYM
Nonspendable
Restricted
Committed
Assigned
Unassigned
This category includes amounts that cannot be spent because they are either not in spendable form (e.g., inventories or prepaids) or legally or contractually required to be maintained intact (e.g., principal of a permanent fund).
nonspendable fund balance
These are funds that are constrained for a specific purpose by external parties, constitutional provisions, or enabling legislation.
restricted fund balance
This classification includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority.
committed fund balance
This category encompasses amounts intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed.
assigned fund balance
the residual amount for the net position of governmental funds
unassigned fund balance
What are two ways to present component units in the governmental wide financial statements?
Discrete or Blended
How do you determine if a component unit is blended?
Governing body is the same as the primary government
services only the primary government
The primary government pays for the component unit’s debt
How are blended component units presented in the financial statements?
Combined with the data of the primary government
How are discrete component units presented in the financial statements?
Reported in a separate column in the governmental wide financial statements