CPA FAR - Items Learned 11/27/2024 Flashcards
How do you account for a change in accounting principal?
Retrospective, restate Retained Earnings.
Note: The cumulative effect of the accounting change is NOT reported on the Income Statement.
How do you calculate consolidated Retained Earnings in the year of consolidation?
Parent RE + Parent’s share of sub post-acquisition profit
Where does the gain/loss on a sale of land go on the Statement of Cash Flows?
Operating CF
Where does a bond sinking fund go on the Balance Sheet?
Non-current Assets
Between the full amount and the amount the hospital expects to collect, how much should Patient Service Revenue be recorded at?
The amount the hospital expects to collect.
What is donated property to an NFP recorded at and how does it affect the financial statements?
Donated property is recorded at FMV and is an increase to assets on the Statement of Financial Position and as support on the Statement of Activities.
What rate do you use when calculating the PV of a principal payment?
Market rate
What rate do you use when calculating the interest payment of a bond?
Stated rate
