Deck 3 Flashcards
What type of cash flow statement includes capital financing activites?
propriety fund financials of a government
what is the functional currency of an entity?
1) local curreny
2) primarily generates and expends cash
3) currency in which the statements will be presented usually parent or a foreign currency that does not include the place the books are
what makes an investment dillutive?
if the excercise price is less than the average market price add the shares to the bottom fraction of dillutive EPS calculation
when do R&D expenses become capitalized?
expense them up until tech feasibility is established then capitilize costs.
what do stock splits and stock dividends require?
retrospective application as if they occured at beginning of period
when is an ARO recorded as a libility?
when it is put into service
What is the rule for R& D expenses?
expensed as incurred unless:
1) they are costs to be reimbursed by another company
2) they are costs for a long lived tangible asset for alternative use
what is considered other financial sources for capital projects funds?
Transfers
&
Proceeds
when the cost method for acquiring treasury stock is used, how is common stock reported on the balance sheet?
total number of shares issued at par value
what is avoidable interst?
The potential amount to be capitalized. Comapre this amount to actual interst and take lesser of two for interest cap.
how are R&D expenses treated if there is a futre alternate use?
only expense those that have no fututre alternate use. if there is an alternate use, capitalize and depriatiate the asset
when equipment is purchased in the general fund, what is the journal entry?
Expenditure x
Voucher payable x
what focus do government-wide financial statements follow?
accrual accounting-economic resosourse measurement
what is the journal entry for a purchase order for supplies?
encumberance x
budgetary control x
what are debenture bonds?
unsecured bonds
how is a noninterest bearing note recorded?
present value of prevailing market rate
if 50% of customers take 2% discount what percentage is reported for the uncollectable allowance?
1% half of 2%
3 enhancing qualities
verify
consistency
compare
timliness
how should intangible assets be amortized?
lesser of legal life or useful economic life remaining
how is amortization different for a finance lease?
for a finance lease-economic life of asset when a BPO exists or when transfer of ownership. If this is not met use asset life
when 75 or 90% criteria is met, amortize over lease term
how are common stock and APIC used to account in a translation?
historical exchange rate
what is the rate to use in a lease?
use the rate known in the lease, if not known use incremental borrowing rate
what is inter period equity for governmental units?
helps users assess if current year revenues will cover current year expenses a balanced budget helps
what do R&D expenses include?
costs incurred before tech feasibilty is expensed.
costs for internal use are not R&D
market research is not included if it does not aim to discover new knowledge or to develop a new product/service
