CPA FAR - Items Learned 11/30/2024 Flashcards
1
Q
When ending inventory is overstated, what is COGS?
A
COGS is understated.
2
Q
What is the Asset Turnover Ratio?
A
Sales / Average Total Assets
3
Q
What is the Days Sales in A/R Ratio?
A
(Ending A/R / Net Sales) * 365
4
Q
Are Net Income or Retained Earnings ever increased through Treasury Stock transactions?
A
No, NI or RE are not increased through TS transactions.
5
Q
In an EPS question, if there is a stock split in year 2 and you are calculating EPS for both years 1 and 2, what is the time effect?
A
The stock split is retroactively applied to ALL prior years in the problem.
