Deck 7

Question 1

how are leashold improvements amortized?

Answer 1

over lesser of lease life remaining or the life of improvements

Question 2

what fund does property tax revenue fall into?

Answer 2

the general fund

Question 3

how are donations received that are designated as quasi endowments reported as?

Answer 3

recorded as donation without donor restrictions( its up to the board)

Question 4

what fund uses noncapital and capital financing activities in its cash flows?

Answer 4

proprietary fund financials only(enterprise +internal service)

Question 5

what is the diff between defined benefit and defined contribution plans?

Answer 5

both reqiure statement of chaneges in net assets avail for benefits
only benefit plans require statement of accumulate plan benefits
cash flow is optional for both

Question 6

what is the cash flow formula for “cash payments for purchases?

Answer 6

COGS for the year in question
-decreases in inventory(subtract bc cash went up(direct method ))
- increases in AP(subtract because cash went up(direct method))
=cash payments for purchases

Question 7

how are ARO’s treated in JE format?

Answer 7

asset retirement cost
asset retirement obligation

depreciate cost over life
accrete obligation over the rate

add both depreciation and accretion to get the year 1 expense

Question 8

how are rennovations and upgrades classified under NFP npn-gov accounting?

Answer 8

capitalized just like commercial.

Question 9

how are patents capitalized and amortized?

Answer 9

over lessor of legal or economic life(remember to amortize with the date remaining ie 6/12 months)

Question 10

what makes up consolidated net income?

Answer 10

100% of parent net income
less any equity earnings in sub
\+ % of sub income 
less any goodwill impairment
=consolidated net income

Question 11

how are escrow payments received reported in the escrow account?

Answer 11

addd it to the credit side as they make escrow liability go up

Question 12

how are leashold improvements amortized?

Answer 12

over the expected benefit time frame(when it was put in to the end of the lease)

Question 13

how are conditional donations recognized?

Answer 13

as a refundable advance until the condition is met. Revenue is never recorded for conditional promises.

Question 14

why does placing an order not signify revenue recognition?

Answer 14

because control of the goods have not been passed to customer. the goods must be delivered.

Question 15

how is APIC immediately following acquisition calculated?

Answer 15

invest in sub (sharesfair value)
Common stock(sharespar)
APIC(PLUG)

Question 16

under the aging method, how is the year end alowance balance calculated?

Answer 16

multiply estimated uncollectable % by each amount

existing balance bb determines expense for year

Question 17

SEC filer vs Non-SEC subsequent eval period

Answer 17

NO SEC–date avail to be issued

SEC–up to issue date

Question 18

how is the expected credit loss model used?

Answer 18

expected credit loss = amortized cost-present value of expected cash flows. If fair value is more than amortized cost, no loss recognition on income statement. if it makes a gain, b/c fair value is more than amortized cost, gain goes to OCI.

Question 19

if the ownership does not transfer at the end of the lease or ther is no written purchase option, how is the lease amortized?

Answer 19

pv of lease divided by life of lease

if there is O or W, use asset life divided by eul

Question 20

if the board stipulates an imposed restriction how is it reported?

Answer 20

without donor restrictions

Question 21

if stock dividends or splits change common stock outstanding how are they treated?

Answer 21

apply to beggining of period as if they are outstanding all yeat

Question 22

how are available for use funds calculated?

Answer 22

appropriations
less encumberence
less expenditures
=remaining appropriations available

Question 23

what is the only fund that will show a positive amount?

Answer 23

general fund

Question 24

what governmental funds get cash flows req.?

Answer 24

proprietary only: enterprise and internal service. NO Governmental funds or Fiduciary funds

Question 25

what fund must present cash flows in net fund format?

Answer 25

fiduciary funds

Question 26

what should be disclosed in regard to deferred taxes?

Answer 26

types and amounts of temorary differences, nature and amount of loss and tax credit carryforwards. permenent differences do not have to be disclosed.

Question 27

how is compensation expense recorded if the options are exercised in the same year they are granted

Answer 27

compensation expense for full amount in this case, otherwise spread it over the years from grant to vest date.

Question 28

what is the primary purpose of a cash flow statement?

Answer 28

to provide info about cash receipts and cash disbursements during a period. cash flows are historical, so it wont help us determine future cash flows or operating obligations to be met

Question 29

when is a refundable advance recorded for NFP accounting?

Answer 29

when the condition is conditional and not guaranteed. example. only 50% chance. record as a refundable advance, once it is met, reclass to without donor restrictions.

Question 30

if a foreign currency transaction is not settled as of year end, how is it accounted for?

Answer 30

record gain or loss from year end to when it is settled. DO not go back to original date