Deck 28 Flashcards
Journal entry for purchasing a fixed asset?
Debit the asset and credit an expense
Journal entry to record costs incurred to date:
Dr. Construction in progress and Cr. Cash
Progress billings in excess of cost and estimated earnings:
Current liability account
Costs and estimated earnings in excess of progress billings:
Current asset account
Rule for leasehold improvements/renovations:
Capitalize and amortize the shorter of the different lives
Employee’s compensation for future absences (vacation) should be accrued if:
1) services have been rendered; 2) obligation relates to vested or accumulated rights; 3)Amount can be reasonably estimated; and 4) payment is probable
What characteristic is the most difficult to report for a governmental entity?
Relevance
Net bond liability is equal to
Face amount of bond - bond issuance costs
An enterprise fund receives interest on long-term investments; where is this located in Statements of cash flows?
Investing section
Any change in ARO after it has been depreciated will be recognized in:
Profit or loss
Amount to expense related to software costs (two things)
1) amortization expense and 2) any impairment loss
How does purchasing/issuing/reissuing shares affect outstanding shares?
Purchase: decrease; issue: increase: reissue: increase
Lease began on 12/31 and first payment was made on 12/31, is there any interest during the first year?
NO (accrue interest if lease began earlier in the year)
Acquisition costs associated with a business transaction must be:
Expensed as incurred
Difference between internal service/enterprise funds
Internal service: service internal users (one department services another); Enterprise: services the public ex: utilities
Life insurance policies are recorded at what amount?
Cash surrender value (FMV) less any loans against the policy
Amortization of prior service cost =
Unrecognized prior service cost/remaining service life
Gain amortization for defined benefit pension plan =
(Excess of unrecognized gain over he greater of 10% of beg PBO or 10% of beg. FV plan assets)/ average remaining service life
How does the purchase of treasury stock affect equity and EPS?
Decrease equity and increase EPS
What should Marvin record as the current maturity on the lease at year end?
Total amount of amortization
