Day 11 - A2C & Profit Ratios Flashcards
How is accumulated other comprehensive income presented on a company’s balance sheet?
As an equity item following RE
MCQ-07433
The effective tax rate for operations for the full year should include:
Foreign tax rates and Available tax planning alternatives
MCQ-00238
Revenue recognition: Input methods
- Resources consumed
- Labor hours expanded
- Costs incurred to total expected costs
MCQ-06240
An entity should recognize a refund liability when:
If it receives or expects to receive consideration from a customer and anticipates having to refund a portion or all of the consideration
MCQ-08613
How should a company report it’s change from cash basis to accrual basis?
As an error correction (net of tax), by adjusting the begging balance of RE
MCQ-14613
Cash to Accrual steps:
- Add increases in CA to income
- Subtract decreased in CA to income
- Add decreases in CL to income
- Subtract increases in CL to income
MCQ-06929
When translating a foreign FS, where would the gains and losses from remeasurement and translation be reported?
Remeasurement = Net Income
Translation = Other Comprehensive Income
MCQ-07434
For accelerated filer how many does does a company have to file the form 10-k?
75 days
MCQ-06618
The balance in accumulated other comprehensive income from one period to the next will change as a result in changes:
Of other comprehensive income only
MCQ-07442
What would not be recognized in other Comprehensive Income?
Gain or lose related to fair value hedge
This is included in CY earnings
MCQ-15675
Accrual to cash steps:
- Subtract increases in CA
- Add decreases in CA
- Subtract decreases in CL
- Add increases in CL
MCQ-08564
What is not a common modification used to prepare modified cash basis FS?
Recognizing revenues when earned
Common Modifications include:
- Record of LT liabilities
- Accrual of income taxes
- Capitalizing inventory
MCQ-06396
Enhancing Qualitative Characteristics
- Comparability
- Verifiability
- Timeliness
- Understandability
MCQ-05652
Marr Corp. reported rental revenue of $2,210,000 in its cash basis federal income tax return for the year ended November 30, Year 2. Additional information is as follows:
Rents receivable - November 30, Year 2: $1,060,000
Rents receivable - November 30, Year 1: $800,000
Uncollectible rents written off during the fiscal year: ($30,000)
Under the accrual basis, Marr should report rental revenue of:
Rents Receivable Beg. $800,000
Add: Billings accrued XXX,XXX
Sub Total:
Less: Cash Collections ($2,210,000)
Less: Write-Offs ($30,000)
= Rent Receivable $1,060,000
Answer: $2,500,000
MCQ-00615
The conversion from Cash to Accrual basis revenue includes the following adjustments when starting with Cash Basis revenue:
- Add: Ending AR
- Subtract: Beginning AR
- Subtract: Ending Unearned Revenue
- Add: Beginning Unearned Revenue
MCQ-14851
Dannon Co. mistakenly reported its expenses of $35,200 on the cash basis. Corporate records revealed the following information:
Beginning prepaid expense: $1,300
Beginning accrued expense: $1,650
Ending prepaid expense: $1,800
Ending accrued expense: $1,200
What amount of expense should Dannon report on its books under the accrual basis?
$35,200 Cash Basis Expense
+ 1,300
- 1,800
- 1,650
+ 1,200
= $34,250 Accrual basis expense
MCQ-05631
Equation: Inventory Turnover
COGS = Beg Inv + Purchases - Ending Inv.
Inventory Turnover = COGS / Avg. Inv
MCQ-05956
Equation: Working Capital
= CA - CL
MCQ-04909
Equation: AR Turnover
= Sales / Avg. AR
MCQ-05460
Equation: Asset Turnover
= Sales / Avg. Total Assets
MCQ-04668
Equation: Profit Margin
= Net Income / Sales
MCQ-04949
Equation: Return on Assets (ROA)
= Net Income / Avg. Total Assets
MCQ-04950
If ABC, Inc. sold $100 of Inventory for $100 cash which ratio would decrease?
Net Profit Margin
If Inventory is sold at cost, Net Income does not change but Net Sales Increases
MCQ-04954
Equation: Total Debt Ratio
= Total Liabilities / Total Assets
MCQ-04966
What are the 3 ways to create a New Partnership Interest with Investment of Additional Capital?
- Exact
- Bonus
- Goodwill
Finger Math:
- Get 1/4 = 4 - 1 = Divide by 3
- Get 1/20 = 20 - 1 = Divide by 19
MCQ-04552
In the formation of a partnership, assets are recorded at:
Fair Market Value
MCQ-05089
Rule: In the formation of a partnership, tangible assets would be recorded at _______ at the date of the investment
FMV
MCQ-00747
Rules: Bonus Method
- Determine total capital and the interest to the new partner
- if interest less than amount contributed = bonus to old partners
- if interest greater than amount contributed, bonus to new partner
MCQ-00871
