Day 18 - 67% FAIL / NFP Flashcards
Characteristics of financial reporting for Government
U R MICE
- UNDERSTANDABILITY
- RELIABILITY
- Make a difference - RELEVANCE
- In TIMELINESS
- CONSISTENCY
- Entity to entity - COMPARABILITY
MCQ-00888
When do you record a loss for a Purchase Agreement vs a Purchase Commitment?
Purchase Commitment - legally binding contact / record loss
Purchase Agreement - no loss is recorded bc the buyer is not obligated
MCQ-04485
Can you capitalize interest expense from internal equity?
No
MCQ-01866
ABC owns 75% of Volkswagen $50k of CS.
ABC has $100k of CS. What amount of CS is reported on the consolidated BS?
Rule: 100% of a purchased subsidiary’s Stockholders Equity (including CS) is eliminated as of the date of the acquisition
Report only ABC’s $100k
MCQ-00435
Unrealized holding gains and losses on Equity Securities are included in ______
Included in Earnings/Net Income as they occur
Equity Securities = recorded at FMV
MCQ-00518
Under the Cost Method (95% of the Time) how are Treasury Stocks recorded and carried
Recorded and Carried at their REACQUISITION COST
Gains/Losses are determined when REISSUED
Note: Gains on sale of TS are credited to APIC-Treasury Stock - IT DOES NOT AFFECT NET INCOME or RE
MCQ-00981
ABC purchased bonds on the open market as an investment and intends to hold until maturity. The bonds are recorded at their:
Amortized Cost and classified as Held-To-Maturity Securities
MCQ-00266
What is the only depreciation method that ignores Salvage Value?
Double Declining Balance
MCQ-00142
Using the Sum-Of-The-Years-Digits method, what is the first year fraction for a 4 year & 5 year asset?
4 Year Asset
1. 4/10 * (Cost - Salvage Value) = Depr Exp
2. 3/10 * (Cost - Salvage Value) = Depr Exp
3. 2/10 * (Cost - Salvage Value) = Depr Exp
4. 1/10 * (Cost - Salvage Value) = Depr Exp
(To find carrying value = use original cost)
5 Year Asset
1. 5/15 * (Cost - Salvage Value) = Depr Exp
2. 4/15 * (Cost - Salvage Value) = Depr Exp
3. 3/15 * (Cost - Salvage Value) = Depr Exp
4. 2/15 * (Cost - Salvage Value) = Depr Exp
5. 1/15 * (Cost - Salvage Value) = Depr Exp
MCQ-00142
Porter Co. began its business last year and issued 10,000 shares of common stock at $3 per share. The par value of the stock is $1 per share. During January of the current year, Porter bought back 500 shares at $6 per share, which were reported by Porter as treasury stock. The treasury stock shares were reissued later in the current year at $10 per share. Porter used the cost method to account for its equity transactions. What amount should Porter report as paid-in capital related to its treasury stock transactions on its balance sheet for the current year?
JE: To record original issuance
Cash 30,000
Common Stock 10,000
APIC - Common Stock 20,000
JE: To repurchase stock
Treasury Stock 3,000
Cash 3,000
JE: To reissue Treasury Stock
Cash 5,000
Treasury Stock 3,000
APIC - Treasury Stock 2,000
MCQ-05228
Under the Bonus Method, when will the bonus be credited to Existing & New Partners?
Existing Partners - When new partner pays MORE than NBV
New Partner - When new partner pays LESS than NBV
MCQ-00870
For subsequent events after the BS date, when are Footnote Disclosures required?
“Reasonably POSSIBLE”
MCQ-00916
What are the FS prepared for NFPs?
- Stmt of Financial Position
- Stmt of Activities
- Change in total net assets
- Change in net assets without donor restrictions
- Change in net assets with donor restrictions - Stmt of Cash Flows
Flashcards F6 M1
How are the accounts Unearned Rent and Deposits From Customers reported on the BS?
Liabilities
MCQ-08586
ABC changed from LIFO to FIFO. How should this be reported?
Report the cumulative effect of the changes as an adjustment to to Beg. RE, net of tax
