Challnge Quiz Wrong Answers Flashcards
Bonds are viewed as retired from a consolidated viewpoint, how are they treated when a sub buys them from the parent on the consolidated statements?
Noncontrolling interest not affected, consolidated retained earnings
Is affected
Bonds are viewed as retired from a consolidated viewpoint, when…
There is no longer an obligation to an outside party
For a sole proprietor’s cash basis financial statements, when the proprietorship has been bought for $350,000, it’s assets have a carrying amount of $375,000 and a fair value of $360,000. Which amount is included in calculating the owner’s capital balance?
Amount paid to acquire business, $350,000
An expense recorded in a tax return, that is not recorded in the income statement results in…
2) income instead of expense would have resulted in…
A deferred tax liability
2) deferred tax asset
How do you calculate average collection period of accounts receivable?
Accounts receivable turnover = net credit sales/avg. receivables
Average collection period = 360 days/accounts receivable turnover
When resources are under control of the governing board and not specifically restricted by the donor, the income is recorded as…
Increase in unrestricted revenues, gains and other support
What is the entry in government accounting to record the adopted budget, when there is a transfer to debt service and a budgetary fund balance?
Estimated revenue. Xxx
Appropriations control. Xxx
Estimated transfer to debt service Xxx
Budgetary fund balance. Xxx
If an acquirer owns 95% of a sub. After a year, how much of the sub’s net income should be reported accruing to the parent?
95%
What is the journal entry under the cost method, when treasury stock is reissued at a gain?
Cash. Xxx
Treasury stock. Xxx
PiC- Treasury stock transactions Xxx
Non current deferred tax assets and liabilities can be…
Netted together, only current and non current can’t be netted
GASB establishes accounting and reporting standards for…
Nonprofit organizations that are government organizations
Freight out costs paid by a parent on an intercompany sale to a sub, should be…
Eliminated from selling expenses on the consolidated income statement
The rights and obligations under an insurance contract that is not a financial instrument (because it requires or permits the insurer to provide goods or services rather than a cash settlement) but whose terms permit the insurer to settle by paying a third party to provide those goods or services is…
An eligible item for the fair value option
Under GASB, interest that clearly derives from borrowing that is essential to support a program should be reported as…
A direct expense of that program
Under GASB, interest that does not qualify as a direct expense should be reported as…
A separate line (should not be combined with direct expenses)
