Concepts Flashcards
How should the balances of progress billings and construction in progress be shown at reporting dates prior to the completion of a long-term contract?
Progress billings and construction in progress should be netted for balance sheet presentation as a current asset or liability.
What entry is needed for declaration of stock split?
In a stock split, no journal entry is recorded and no retained earnings are reclassified.
How is cash receipt of dividend recorded on cash flow?
This is a cash inflow from an INVESTING activity.
How is dividend paid to shareholder shown on the cash flow statement?
Payment of dividend is a cash outflow from FINANCING
How is a gain or loss of sales of investment is recorded on the cash flow statement?
It is an operating activities; gain need to subtract from the income and loss need to add to the income
What is Additional Paid In Capital?
Additional Paid In Capital is the difference between Cash and Par Value.
If the stock Dividend is less than 20% to 25%, it is …..
Stock dividend
If the stock Dividend is more than 20% to 25%, it is …..
Stock splite
What effect does it have on Expenses, Net Income and Current Assets when write off Bad Debt?
Expenses, Net Income and Current Assets has no effect when write off bad debt.
How should the loss contingency presented in the Financial Statement?
A liability arising from a loss contingency should be recorded if the contingent future event will probably occur and the amount of the loss can be reasonably estimated.
When should an entity disclose the loss contingency in the notes?
The disclosure is need if the contingency can not be reasonably estimate and probability is not available.
When should an entity accrued the loss contingency?
The contingency must be accrued if the probability can not be determine and the amount can not be reasonably estimate.
When should a gain contingency recognized?
The gain contingency is not recognized unit it is realized.
How would the gain/loss on purchase commitment be treated?
Gain on purchase commitment is not recorded
Loss is recognized on a non-cancellable purchase commitment.
Under which inventory valuation method, both the periodic and perpetual accounting systems will result in the same amount of ending inventory.
FIFO
Which inventory method is not permitted under IFRS?
LIFO
How is inventories measure under GAAP?
The LCM value must be:
Ceiling > Replacement cost
What amount is the Held-to-Maturity reported on the Financial Statement?
Held-to-maturity securities are reported at amortized cost.
What are the acquisition cost? How should it be treated?
Acquisition costs are:
finder’s fees, professional and consulting fees, and general administrative costs.
These cost should be expense as it incurred
Equity method is not applicable to what type of stock?
Preferred Stock.
Entity should report preferred stock dividend as dividend revenue on the income statement.
Which inventory system is applicable to use Weighted-Average cost?
Periodic system
which inventory system is applicable to use Moving-Average?
perpetual system.
How is the bad debt amount be treated under the Income Statement method?
Under the Income Statement method, the amount recognized for bad debt needs to add to the balance of the bad debt account and the balance of the Allowance for Un-collectible account.
How is the bad debt amount be treated under the Balance Sheet method?
The bad debt and allowance for un-collectible account is adjusted by the difference between the balance in the allowance and the amount recognized for the period.
Which type of security has the following characteristic?
- Report at amortized cost
- No re-measurement to FMV at the balance sheet date
- realized gain or loss reported on the income statement
Held-to-Maturity Security
