Day 11 Flashcards
What is the formula for Comprehensive Income?
Net Income
+ OCI
——————–
= Comprehensive Income
A company entered into a purchase commitment to buy inventory. At year end the current market price of the inventory was less than the fixed price by a material amount. How should this be reported?
- Describe the nature of the contract in the FS notes
- Recognize loss on IS
- Recognize a liability for the Accrued loss
Loss must be recognized at the time of the decline in price
MCQ-05942
In an exchange lacking commercial substance and boot is received, how much gain should be recognized?
If boot RECEIVED is less than 25% of Total Consideration, Gain is recognized by a proportion of Total Consideration
MCQ-14852
F6 M5 - MCQ-04504
Accrued warranty costs for financial reporting purposes, ordinarily creates a:
Deferred Tax Asset
Accrued Warranty Costs are expensed for GAAP and NOT deductible for Tax until warranty is performed
MCQ-04504
Equation: Inventory Turnover
COGS / Avg Inventory
MCQ-06925
What inventory costing method will produce a lower inventory turnover ratio in an inflationary economy?
FIFO
MCQ-06925
Dollar Value LIFO layer equals:
Base Year Costs
LESS:
Beg. Base Year Costs
×
Price Index
MCQ-00095
Gain on the sale of equipment is reported under cash flows from:
Investing Activities
MCQ-12605
How is Compensation expense reported for a compensatory stock option/plan?
Comp Exp is allocated over the Employees service period
MCQ-00911
What is the normal balance of the Allowance for Uncollectible Accounts and what is it?
Allowance for Uncollectible Accounts = credit balance (this is bc it is a contra-account to AR that has a debit balance)
How should the acquirer recognize a bargain purchase in a business acquisition?
As a gain in earnings at the date of acquisition
The buyer purchased equipment/property at less than FMV, thus a gain is recognized
