Day 15 Flashcards
Define: Special Revenue fund
Governmental funds that account for the special revenue proceeds that are legally restricted to Expenditures for a specified purpose (fuel tax for highways)
MCQ-01057
Define: cash flows from financing activities
From noncurrent liabilities and equity activities
Note: interest payments on a note payable = OPERATING ACTIVITIES
MCQ-14849
When an entity commits to an exit plan a liability is only recognized when:
- An obligating event has occurred
- The event results in a present obligation to transfer assets or provide services in the future
- The entity has little or no way to avoid the future transfer or services
MCQ-06066
When a property was fully depreciated, the decommissioning liability was reviewed and adjusted. How should this change be recognized?
The change in liability is recognized in profit and loss
MCQ-14648
For financial instruments, what types of risks are required to be disclosed?
Concentration of Credit Risk - the risk that the other party will not perform must be disclosed
Note: Market Risk - changes in market price, not required to be disclosed but encouraged
MCQ-00931
Is equipment purchased for future and current R&D projects classified as R&D expense?
Not the cost but the Depreciation expense of the equipment is R&D expenses
MCQ-13093
The expenditure element “salaries and wages” is an example of which type of classification?
Object Classification
MCQ-00947
Types of Governmental Expenditure Classifications:
- Function or Program - Public Safety
- Organizational Unit - Police / Fire Department
- Activity - Drug / Highway Enforcement
- Character - refers to determining the basis of the fiscal period the expenditures are to benefit
- Object - Chart of Accounts
MCQ-00947
Equation: Working Capital Turnover Ratio
Sales / Avg. Working Capital
Working Capital = CA - CL
MCQ-04946
Bonds: Interest Expense
= CV x Effective Int. Rate
Bonds: Interest Payment
= FV x Coupon Rate
Bonds: Amortization of Discount
= Interest Expense - Interest Payment
Bonds: Amortization of Premium
= Interest Payment - Interest Expense
Difference between the PV of an Ordinary Annuity and the PV of an Annuity Due:
The only difference is the timing. An Annuity Due’s payment is due at the beginning and each cash flow is discounted one less period
MCQ-00343
FOB Shipping Point VS FOB Destination
FOB Shipping Point - Title transfers to the buyer when the seller delivers the goods to a common carrier
FOB Destination - Title passes to the buyer when the buyer receives the goods
MCQ-00112
ABC uses the allowance method for recognizing uncollectible accounts. The entry to record the write-off of a specific uncollectible account:
Allowance Method - DOES NOT affect Net Income nor Working Capital
Dr - Allowance for Uncollectible AR
Cr - AR
Direct Write-Off Method - reduces Net Income and reduces Working Capital
Dr - Bad Debt Expense
Cr - AR
MCQ-00271
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
Accrual to Cash steps:
- Subtract increases in CA
- Add decreases in CA
- Subtract decreases in CL
- Add increases in CL
MCQ-08564
How would a 5% stock dividend affect Assets, SH Equity, and RE?
- No Effect on Assets
- No Effect on SH Equity
- Decrease RE
Rule: A stock dividend of less than 20-25% transfers the FMV of the stock dividend from RE to Capital Stock and Paid-In Capital. There is NO EFFECT on SH Equity since it takes place within SH Equity
MCQ-04501
Define: Derived (non-exchange) tax revenue
represents taxes imposed on or derived from exchange transactions such as commercial sales (Sales Tax)
MCQ-00904
85% of adjustments to the Operating Activities: CLAD
Current Assets and Liabilities
Losses and Gains
Amortization and Depreciation
Deferred Items
