Chapter 2 Section 7: Other Financial Statement Presentations

Question 1

What are the most common OCBOA (other comprehensive basis of accounting) presentations? (3)

Answer 1

Cash
Modified Cash
Tax

Question 2

What statements are required for OCBOA presentation?

Answer 2

Equivalent of balance sheet and income statement.

No statement of cash flows.

Question 3

What is recorded on the pure cash basis “balance sheet?”

Answer 3

Cash is the only asset, there are no liabilities, and equity equals cash

Question 4

What are 5 common modifications when the modified cash basis is used?

Answer 4

1. Capitalize and depreciate fixed assets
2. Accrue income tax
3. Record liabilities for short and long term borrowings and the related interest expense
4. Capitalize inventory
5. Report investments at fair value and record unrealized gains and losses

Question 5

What is the big modification when the tax basis is used?

Answer 5

Nontaxable revenues and expenses need to be reported separately in some way.

Question 6

What statements are presented for personal financial statements?

Answer 6

Statement of Financial Condition (B/S) - everything at FV

Statement of Changes in Net Worth - optional