Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

119 > Chapter 6 (FINANCIAL ASSETS) > Flashcards

Chapter 6 (FINANCIAL ASSETS) Flashcards

1
Q

any contract that arises to both FA and FL or equity of another entity

A

Financial Instrument

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

a. Cash
b. Equity instrument of other entity
c. contractual right receive cash/ fi from other entity
d. cr exchange fi under conditions (favourable)

A

Financial asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

a. contractual obligation deliver cash or FA
b. co exchange Fa or fl (unfavorable)
c. settled in entity’s own equity

A

Financial liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q
  • contract: residual interest in assets after deducting liab
A

Equity instrument

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q
  • recognised when become a party to contractual provisions
A

Initial Recognition of FA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Initial Measurement of FA

A

Initially measured at FV plus transaction costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q
  • Incremental costs (attributable to the acquisition)
  • Fees and commissions paid to broker
A

Transaction Costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

cash on hand, cash in bank & cash treasury accounts

A

Cash

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

CASH AND CASH EQUIVALENTS
RECEIVABLES
INVESTMENTS
DERIVATIVES

A

Division of Financial Asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q
  • Drawn not yet given to payee at the end of period
  • Reverted back to cash
    Cash in bank, local currency – current
    AP
A

Unreleased commercial checks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q
  • Cancelled when stale, void
  • Stale – outstanding for 6 months
  • Reverted back to cash
A

Cancelled checks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q
  • Amounted granted by petty cash fund custodian to pay miscellaneous that can’t be paid through checks or ADA
A

Petty Cash fund

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q
  • Disbursing officer is liable (
A

(cash shortage)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q
  • Cannot explain; forfeited in favor gov
A

(cash overage)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q
  • not accepted for payment
  • lack of sufficient funds ( bounced check)
A

Dishonored check

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

a. Collecting officer shall:
1. issue notice of dishonored check (drawer and endorser)
2. cancel OR
b. fails issue (CO – personal liability); drawer and endorser (relieved)
c. check refused by bank within 90 days (prima facie) drawer has knowledge
d. DC settled payment in cash or certified check

A

Guidelines of Dishonored check

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

prepared to reconcile cash per records and per bank statement

A

Bank reconciliation

18
Q
  • report issued by bank that shows D and C and Cumulative balance of depositor
A

Bank Statement

19
Q

1) presented as internal control
2) Chief accountant – prepare bank recon within 10 days from receipt of monthly bank statement
3) Adjusted balance method shall be used
4) prepared in 4 copies; submitted within 20 days (Coa auditor, head of agency, accounting division, & bank)
5) Journal entry voucher shall be prepared

A

Guidelines in Bank reconciliation

20
Q
  • Short term; highly liquid investment readily convertible
  • Only debt instruments within 3 months
A

Cash equivalents

21
Q
  • Claims for cash
    a. AR – amount due from customers (regular trade business transactions)
    b. NR – claims with interest (promissory notes)
    c. LR – recognize loans (gov – goccs)
    d. Other R – interest, lease and dividends receivables
A

RECEIVABLES

22
Q

Initial measurement of Receivables

A

FV plus TC

23
Q

Subsequent measurement of Receivables

A

Amortized cost

24
Q

a. Held for trading
b. on initial recognition (if can be reliably measured)

A

FA at FV through surplus or deficit

25
Q

are non-derivative financ assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability t hold until maturity.

A

Held to maturity

26
Q

are non-derivative financial assets with fixed or determinable payments and are not quoted in an active market.

A

Loans and receivables

27
Q

are non-derivative financial assets that are designated as available for sale or are not classifiable under the other categories

A

Available for sale FA

28
Q
  • Investments cannot be reliably measured
A

(COST)

29
Q
  • Measure diff between carrying amount (allowance account) and present value of FA (discounted effective interest rate)
A

Impairment of Financial Assets

30
Q
  • Removing previously recognized A, L or E from statement of FP
    1. Contractual rights to FA expire/waived
    1. FA transferred; risk and rewards (relinquished)
  • Subject to the state audit code of PH issued by COA
A

Derecognition of FA

31
Q
  • FI or contract that derives its value from changes of value (underlying asset or underlying asset)
A

DERIVATIVES

32
Q
  1. value changes in change of underlying
  2. requires no initial inv (very minimal initial inv)
  3. settled at future date
A

Characteristics of Derivatives

33
Q
  • Specified price, rate or other variable w/ schedule event that may or may not occur
A

Underlying

34
Q
  • Risk management (identifying the desired level of risk
A

Purpose of Derivatives

35
Q
  • Method of offsetting a potential loss to reduce risk
A

Hedging

36
Q
  1. FV hedge – exposure to changes in FV
  2. Cash flow hedge – exposure to variability in cashflow
  3. Hedge of a net investment in a foreign operation
A

Hedging relationship

37
Q

a. hedging instrument – derivative whose FV/ cashflow (offset change in FV or cashflow)
b. Hedged item – A, L firm commitment, transaction (foreign operation) expose risk of change in FA or Fcf and designated being hedge

A

Component of hedging relationship

38
Q

exposure to changes in FV

A

FV hedge

39
Q

exposure to variability in cashflow

A

Cash flow hedge

40
Q

Other hedging relationship

A

Hedge of a net investment in a foreign operation

41
Q

derivative whose FV/ cashflow (offset change in FV or cashflow)

A

hedging instrument

42
Q

A, L firm commitment, transaction (foreign operation) expose risk of change in FA or Fcf and designated being hedge

A

Hedged item

119 (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions