Chapter 2 Other Financial Statement Presentations

Question 1

How do Income tax-basis financial statements differ from those prepared under GAAP>

Answer 1

They recognize certain revenues and expenses in difference reporting periods

Question 2

Where is the non deductible portion of expenses recorded?

Answer 2

It is included in the expense category in the determination of income.

Question 3

On a personal statement of financial condition, how do you determine estimated income taxes?

Answer 3

Estimated income taxes equals the difference between fair values and tax bases of assets and liabilities.

Question 4

On personal financial statements how are assets and liabilities reported?

Answer 4

All items are reported at their fair market values (Estimated current values)

Question 5

What do personal financial statements usually consist of?

Answer 5

A statement of financial condition and a statement of changes in net worth.

Question 6

How is a business intrest that constitutes a large part of an individuals total assets presented in a personal statement?

Answer 6

A single amount equal to the estimated current value of the business interest.

Question 7

How are assets reported on personal statement of financial condition?

Answer 7

at fair value.