Day 17 - 63% FAIL Flashcards
Under the Equity method, the investment account increases by:
The investee net income and credit income Stmt
DR - Investment - Tesla
CR - Investment Income
Dividends reduces the Investment - Tesla account on the BS
MCQ-00310
ABC owns 80% of Ford. During the year ABC sold goods to Ford for it’s usual 40% Mark up. Ford sold all of these goods, how should ABC and Ford’s income Stmt be adjusted for consolidated FS?
Sales and COGS should be reduced by intercompany sales
Note: an inventory adjustment is NOT needed since there is no inventory on hand at year end
MCQ-00448
Inventory Turnover Ratio:
COGS / Avg. Inventory
MCQ-04942
In a NFP, classify the following donations:
- $875k donated for the board to use at its own discretion
- $500k promise to make a donation
- Donated legal services worth $100k that the NFP would have other wise spent
$975k - Without donor restrictions - Legal services are WITHOUT restrictions as an expense is simultaneously recognized as it is consumed
$500k - With donor restrictions - a promise to contribute is a restriction
MCQ-01225
Comprehensive Income =
Net Income + OCI
MCQ-15857
ABC entered into a purchase commitment to buy inventory. At the end of the accounting period the current market value was less than the fixed purchase price. How is this reported?
- Describe the nature of the contact in the notes of the FS
- Recognize loss in the IS
- Recognize Accrued Liability on BS
Purchase Commitment - a legally enforceable agreement
MCQ-05942
ABC entered into a purchase commitment to buy inventory. At the end of the accounting period the current market value was less than the fixed purchase price. How is this reported?
- Describe the nature of the contact in the notes of the FS
- Recognize loss in the IS
- Recognize Accrued Liability on BS
Purchase Commitment - a legally enforceable agreement
MCQ-05942
