Deck 12

Question 1

When the lease in an IFRS sale-leaseback transaction is classified as an operating lease and the sales price is equal to the fair value of the leaseback asset:

Answer 1

Any profit or loss is recognized immediately. And there is no deferred gain or loss.

Question 2

Reporting consolidated financial statements is consistent with the concept of:

Answer 2

The economic entity can be identified with an unit of accountability.

Question 3

Temporary declines in aggregate market values of available for sale securities are charged to (decreasing):

Answer 3

Stockholder’s equity. Subsequent recoveries and/or advances in aggregate market values are credited (increasing) OCI to reflect fair value. OCI is an equity account.

Question 4

The most difficult characteristic to report for a governmental entity is the:

Answer 4

Relevance characteristic.

Question 5

Under the modified accrual basis of accounting for a governmental unit, earned revenues should be recognized:

Answer 5

In the accounting period in which they are measurable and available.

Question 6

The reconciliation of changes in government fund balances to change in net position for governmental activities in the government-wide financials would be computed using the GOES BARE mnemonic:

Answer 6

GRaSPP - Net change in Fund Balance less Other Financing Sources (Uses) [Proceeds from long term debt] plus Expenditures [Capital outlay less depreciation expense plus principal payments] plus Service (Internal) [Change in net position for internal service fund] plus Basis of Accounting Issues [Conversion from modified to full accrual] plus Accrual of Revenue [Sales Tax Revenue] Less Expenses [Interest Payable]

Question 7

The most common functional classifications for non-governmental not-for-profits are:

Answer 7

Program services, fund-raising, and management and general.

Question 8

For related party transactions, both:

Answer 8

The amount due to the affiliate and the dollar amount of the purchase during the year must be disclosed.

Question 9

Trading securities, both debt and equity are reported:

Answer 9

At fair value.

Question 10

Significant influence cannot be exercised by non-voting stock and thus:

Answer 10

The equity method is not used, the cost method is used.

Question 11

When reconciling bank statement balance, the only two items that are used are:

Answer 11

Deposits in transit and outstanding checks.

NSF check, bank fees, and bank errors are reconciling items when reconciling the balance per books.

Question 12

The difference between rent revenue recognized and rent payments received is:

Answer 12

The receivable or payable.

Question 13

Loans to other entities and the collection of the loans are reflected in the (SCF):

Answer 13

Investing activity section of the cash flow statement.