F2 Flashcards
performance obligation:
a promise to transfer a good or service to a customer
Disclosures for subsequent events are required for:
reasonable possible loss
Financial statements are considered to be “available to be issued” when:
1: financial statements are in a form that complies with GAAP
2: all approvals necessary for the issuance have been received
Financial statements are considered to be “issued” when:
1: financial statements are in a form that complies with GAAP
2: the financial statements have been widely distributed to financial statement users
Should entities that file with the SEC disclose when the subsequent event evaluation ends? If so, when is that period?
No, When the financial statements are considered to be “issued”
Should entities that file with the GAAP disclose when the subsequent event evaluation ends? If so when is that period
yes, that period ends when the financial statements are “available to be issued”
Fair value is
the price that would be received when selling an asset or paid when transferring a liability
advantageous market
- the one that generates the highest net price
market participants are
buyers and sellers acting in their economic best interest, they are independent, knowledgable
What are the there level of FV measurement and which one is most reliable
Level 1 - quoted prices in active markets for identifiable assets MOST RELIABLE
Level 2 - quoted prices for similar assets in active markets that are directly or indirectly observable
Level 3- unobservable inputs for the assets LEAST RELIABLE
days in inventory
ending inventory / (cogs/365)
return on equity
net income - preferred dividends / average common equity
inventory turnover
cogs/avg inventory
DuPont return on assets =
profit margin x asset turnover
profit margin=
net income/sales
