Day 10

Question 1

Name an example of a FS prepared in conformity with a special purpose framework?

Answer 1

The statement of Cash receipts and disbursements

Special purpose framework = non-GAAP such as cash basis accounting

MCQ-12655

Question 2

What is not a common modification used to prepare modified cash basis FS?

Answer 2

Recognizing revenues when earned

If revenues are recognized when earned then the FS would be prepared on accrual basis

MCQ-06396

Question 3

Income tax basis FS differ from those prepared under GAAP in that income tax basis FS:

Answer 3

Recognize revenues and expenses in different periods

Nontaxable revenues and ND expenses are reported on M-1

MCQ-00032

Question 4

Compared to accrual basis, cash basis underestimates income by the net decrease of:

Answer 4

Accrued expenses

MCQ-00557

Question 5

In FS prepared on an income tax basis, how should the ND portion of M&E be reported?

Answer 5

Included in the expense category in the determination of income

MCQ-00784