Day 27 - Cram Day Flashcards
The declaration of a cash dividend results in a decrease in ____?
RE and a decrease in Stockholders equity
MCQ-08737
When is it a finance lease: OWNES
- Ownership
- Written purchase option
- Net PV (90%)
- Economic life (75%)
- Specialized
MCQ-04675
What is the minimum operating cycle for a prepaid current asset?
12 months
MCQ-00359
When hail damage to vans is frequent, how is the loss reported?
Actual loss is reported in continuing operations with NO separate disclosure
Loss is FREQUENT
MCQ-00091
The cumulative effect of an accounting estimate change should be recorded separately:
It should NOT be recorded separately on any FS
Reported in the notes of the FS
MCQ-00083
What assets and liabilities can use the fair value option? What is excluded?
Included:
- financial assets (debt & equity securities)
- liabilities (notes payable)
Excluded:
- investments in subsidiaries
- pension benefit assets/liabilities
- assets/liabilities recognized under LEASES
MCQ-04143
The government supplies grants to NFPs and as part of standard wording includes right of return and release from obligation.
How should the NFP record the grant?
Contributions without donor restrictions
If they do not impose measurable barriers in the wording they do not impose a condition therefore it is an unconditional grant
MCQ-15558
At its date of incorporation, The McCarty Company issued 100,000 shares of its $10 par common stock at $11 per share. During the current year, The McCarty Company acquired 30,000 shares of its common stock at a price of $16 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of $12 per share. There have been no other issuances or acquisitions of its own common stock. What are the JE?
Cash 1,100,000
Common Stock 1,000,000
APIC 100,000
Treasury Stock 480,000
Cash 480,000
Cash 360,000
RE 120,000
Treasury Stock 480,000
NOTE: Need to have APIC from Treasury Stock Transactions first, otherwise it always affects Retained Earnings
MCQ-09310
Under the Cost Method: When are gains and losses determined?
When Treasury Stock is REISSUED
Treasury Stock is recorded at its REACQUISITION price
MCQ-00807
Under the Par (Legal) Method: What is TS recorded at?
TS are recorded by reducing the amounts of par and APIC received at the time of the original sale
MCQ-00807
When should a material transaction that is infrequent but not unusual in nature be presented separately as a component of income from continuing operations?
ANY material transaction that is Infrequent in occurrence” AND/OR “Unusual in nature” SHOULD be presented separately as a component of income from continuing operations
MCQ-00072
When should the Fair Value Method be used to value an investment in another company?
When a company exercises No Significant Influence over another company, REGARDLESS of Ownership %, the Fair Value Method should be used
MCQ-07501
Patents are amortized over the:
SHORTER of its Estimated Life or Remaining Useful Life
MCQ-07555
