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ZZZ - FAR #2 > Day 15 > Flashcards

Day 15 Flashcards

1
Q

Define: Special Revenue fund

A

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

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2
Q

Define: cash flows from financing activities

A

From noncurrent liabilities and equity activities

Note: interest payments on a note payable = OPERATING ACTIVITIES

MCQ-14849

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3
Q

When an entity commits to an exit plan a liability is only recognized when:

A
  1. An obligating event has occurred
  2. The event results in a present obligation to transfer assets or provide services in the future
  3. The entity has little or no way to avoid the future transfer or services

MCQ-06066

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4
Q

When a property was fully depreciated, the decommissioning liability was reviewed and adjusted. How should this change be recognized?

A

The change in liability is recognized in profit and loss

MCQ-14648

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5
Q

For financial instruments, what types of risks are required to be disclosed?

A

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

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6
Q

Is equipment purchased for future and current R&D projects classified as R&D expense?

A

Not the cost but the Depreciation expense of the equipment is R&D expenses

MCQ-13093

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7
Q

The expenditure element “salaries and wages” is an example of which type of classification?

A

Object Classification

MCQ-00947

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8
Q

Types of Governmental Expenditure Classifications:

A
  1. Function or Program - Public Safety
  2. Organizational Unit - Police / Fire Department
  3. Activity - Drug / Highway Enforcement
  4. Character - refers to determining the basis of the fiscal period the expenditures are to benefit
  5. Object - Chart of Accounts

MCQ-00947

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9
Q

Equation: Working Capital Turnover Ratio

A

Sales / Avg. Working Capital

Working Capital = CA - CL

MCQ-04946

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10
Q

Bonds: Interest Expense

A

= CV x Effective Int. Rate

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11
Q

Bonds: Interest Payment

A

= FV x Coupon Rate

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12
Q

Bonds: Amortization of Discount

A

= Interest Expense - Interest Payment

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13
Q

Bonds: Amortization of Premium

A

= Interest Payment - Interest Expense

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14
Q

Difference between the PV of an Ordinary Annuity and the PV of an Annuity Due:

A

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

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15
Q

FOB Shipping Point VS FOB Destination

A

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

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16
Q

ABC uses the allowance method for recognizing uncollectible accounts. The entry to record the write-off of a specific uncollectible account:

A

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

17
Q

Cash to Accrual steps:

A
  1. Add increases in CA to income
  2. Subtract decreased in CA to income
  3. Add decreases in CL to income
  4. Subtract increases in CL to income

MCQ-06929

18
Q

Accrual to Cash steps:

A
  1. Subtract increases in CA
  2. Add decreases in CA
  3. Subtract decreases in CL
  4. Add increases in CL

MCQ-08564

19
Q

How would a 5% stock dividend affect Assets, SH Equity, and RE?

A
  • 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

20
Q

Define: Derived (non-exchange) tax revenue

A

represents taxes imposed on or derived from exchange transactions such as commercial sales (Sales Tax)

MCQ-00904

21
Q

85% of adjustments to the Operating Activities: CLAD

A

Current Assets and Liabilities
Losses and Gains
Amortization and Depreciation
Deferred Items

ZZZ - FAR #2 (18 decks)

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