F1 - Financial Reporting Flashcards
Under US GAAP, A gain that is unusual and infrequent should be reported as…
Income from continuing operations
Sold fixed assets, acquired new building. Excess proceeds should be reported as…
Continuing operations
Translating a foreign financial statement, the gains and losses would be reported where on the FS?
-Remeasurement - Net income
-Translation - Other Comp Income
When there is no foreign exchange gain or loss recorded, this transaction is…
denominated in another currency
Reclassification adjustments must be shown in FS that shows comprehensive income for this purpose:
To avoid double counting in comprehensive income items, which are already shown in net income
Distributing a dividend to shareholders, which day does it get recorded as a liability (credit) and retained earnings (debit)?
a)Declaration date
B)On record date
c)date it is actually paid
Declaration date
Gains and losses from operations are recorded on the income statement…
A) Net amount concept
B) Gross concept
Net amount concept.
Net concept is equal to
Proceeds less carrying amount
Comprehensive income excludes changes in equity from…
Investment ownership and distribution to owners
When is the earliest point where you can report a business as a discontinued operation?
A) First sells any of the assets
B) Receive an offer
C) Classify has “held for sale”
D) Sells majority of assets
C) classify as held for sale
Using the direct method when quoting the exchange rate means…
To quote the domestic price of 1 unit of another country. Pay attention to who becomes the domestic country in the way the question is asked
Accumulated other comprehensive income at EOY is a debit, Where is the proper place to record?
A)Balance sheet as an asset
B)Expense, net of tax between discontinued and net income
C)Expense on statement of comprehensive income
D)Balance sheet as reduction of equity
D) Shown on balance sheet as reduction of equity
Purpose of reporting comprehensive income?
Summarize changes in equity from non-owner sources
Foreign “Transaction” gains and losses appear on…
A) Income statement
B) Other compromised income
A) Income statement
Foreign “Translation” gains and losses appear on
A) Income statement
B) Other compromised income
B) Other compromised income
What items are found in comprehensive income? 3 items
All changes in equity, except those from owners or distribution to owners
A) Unrealized gains and losses on AFS securities
B) Income from continuing operations
C) changes in funded status of a pension plan
What is required to be on an SEC 8-K?
-Corporate asset acquisitions and disposals
-Accountant changes
-FS changes
-Management changes
-Changes in securities - purchases and sales
Earnings per share formula
(Net income - preferred dividends) / average outstanding shares of company
Dilutive Earnings per share formula
(Net income - preferred dividends) / total number of dilutive shares outstanding
What activity would be classified as “dilutive”?
Any activity that would reduce EPS, for example, conversion of convertible bonds
What activity would be classified as “anti-dilutive”?
Any activity that would increase EPS, for example, exercise of common stock options
Which annual report is filed with US SEC?
A) 10-Q
B) 10-K
C) S-1
D) 8-K
B) 10-K
When filing a 10-K, what is the maximum number of days after fiscal year where the company has to file 10k with SEC?
A) 120,days
B) 75 days
C) 90 days
D) 60 days
B) 75 days
Earnings per share should be reported for
- discontinued operations
- Income from continuing operations
A) 1 - No, 2 - No
B) 1 - Yes, 2 - Yes
C) 1 - No, 2 - Yes
D) 1 - Yes, 2 - No
B) 1 - Yes, 2 - Yes
