F2

Question 0

Percentage of completion calculation for profit or loss

Answer 0

% = Cost / cost + expected cost
Contract price - cost = profit
Profit x % = profit
Loss recognize immediately all of it

Question 1

Completed contract method profit or loss calculation

Answer 1

Revenue recognize when contract is complete
Expected losses immediately all
If cost + expected cost more than revenue recognize

Question 2

On percentage of completion net gain or loss ?

Answer 2

Yes

Question 3

Percentage of completion one trick

Answer 3

Do not forget to subtract profit previously recognized

Question 4

Percentage of completion ratio

Answer 4

Total cost to date / total estimated cost of contract

Question 5

When liability exist on percentage of completion ?

Answer 5

When progress billings exceeds costs and estimated earnings

Question 6

When current assets reported under percentage of completion?

Answer 6

When sum of cumulative costs incurred plus cumulative gross profit recognized exceeds cumulative billings

Question 7

Calculate deferred gross profit on balance sheet by installment method of revenue recognition

Answer 7

Gross profit = sales - cogs
Gross profit rate = gross profit / sales
Deferred gross profit = gp rate x account receivables
If written off take out from sales

Question 8

Is installment sales recognize revenue prior to sale of merchandise ?

Answer 8

No it recognize revenue when cash is collected

Question 9

Is cost recovery method recognize sale of merchandise revenue prior ?

Answer 9

No it delays revenue recognition until all costs have been collected

Question 10

When cost recovery method appropriate to use ?

Answer 10

No reasonable basis for estimating collectibility

Question 11

Deferred revenue formula

Answer 11

Installment receivables 
- collections 
- write off 
= receivables x profit rate 
= deferred revenue

Question 12

When installment sales method permitted to use ?

Answer 12

Only when installment sales are material and there is no reasonable basis for estimating collectability.

Question 13

When financial stmts include adjustment for both specific price change and general price level change ?

Answer 13

Current cost / constant dollar method includes both specific and general price level changes

Question 14

During a period of inflation what amount in an asset account remains constant ?

Answer 14

Purchasing power loss if the item is a monetary asset

Question 15

When computing purchasing power monetary item list :

Answer 15

Advances to unconsolidated subsidiaries
Receivables and related allowance
Bonds payables and related amortization

Question 16

When computing purchasing power gain or loss on net monetary items what account is nonmonetary ?

Answer 16

PP&E and related accumulated depreciation are nonmonetary items

Question 17

When to use specific price index

Answer 17

Current cost accounting

Question 18

Under current cost / general purchasing power accounting what index used to adjust financial stmt ?

Answer 18

General price index

Question 19

During inflation when liability accounts remains constant :

Answer 19

Purchasing power gain , If the item is a monetary liability

Question 20

How current cost of inventory and PP&E are measured ?

Answer 20

At current or lower recoverable amount at measurement date

Question 21

List of monetary assets :

Answer 21

Bank deposits

Long term receivables

Question 22

List of nonmonetary assets

Answer 22

Patents and trademarks

Question 23

What is appreciation?

Answer 23

Is measured by evaluating replacement costs using current dollar accounting
In Period of rising prices, we would anticipate that non- monetary assets would appreciate in value

Question 24

Lacks commercial substance nonmonetary exchange transaction if boot is received cash less than 10% of total consideration :

Answer 24

Proportional amount of gain determined by the ratio of cash received to total consideration

Question 25

Journal entry for nonmonetary exchange

Answer 25

Dr cash
Dr new asset
Cr gain in exchange
Cr old asset carrying value

Question 26

Formula for new asset calculation on nonmonetary exchange

Answer 26

FV - carrying value = difference x %

% cash percentage take out from 1

Question 27

Commercial substance which amount to use

Answer 27

Stock price hard to determine use equipment fair value

Question 28

Gain calculation on commercial substance with cash

Answer 28

Gain = fv asset given - book value of asset given

Bv asset given take out accumulated depreciation

Question 29

How to recognize loss on nonmonetary assets exchange with another nonmonetary asset

Answer 29

Loss recognize immediately

Question 30

In exchange of nonmonetary asset lacks commercial substance if boot is paid losses:

Answer 30

All realized loss are fully recognizable

Question 31

IFRS exchange dissimilar asset
Received equipment fv= cv of asset given up
Also paid cash

Answer 31

Loss is equal to cash given up

Question 32

Commercial substance loss and gain immediately how about lack commercial substance ?

Answer 32

Losses and Gains proportional if boot received

If no boot no gain or loss

Question 33

Under GAAP US parent company with foreign subsidiary. Foreign subsidiary functional currency is :

Answer 33

Of the environment in which the subsidiary primarily generates and expends cash.

Question 34

Functional currency of the company may be :

Answer 34

Foreign entity’s local currency one entity’s keep its book
Parent company currency
Foreign currency foreign entity maintains books on

Question 35

Where gain on foreign exchange reported as extension

Answer 35

Component of income from continuing operations

Question 36

Cumulative foreign exchange translation loss is a

Answer 36

Stockholders equity contra account

Question 37

If subsidiary’s functional currency is its local currency , subsidiary stmts are simply translated to :

Answer 37

Reporting currency

Question 38

If subsidiary functional currency is not same as local currency subsidiary financial stmt must be

Answer 38

Remeasured into functional currency

Question 39

In order to have commercial substance

Answer 39

Either 1. Risk , timing , and amount of the expected future cash flows from the asset transferred differs significantly from the risk timing and the amount of the expected future cash flows from the the assets received 2. Entity specific value from the assets transferred .

Question 40

Installment method formulas

Answer 40

1. Gross profit = sales - cogs
2. Gross % = gross profit / sales
3. Earned gross profit = cash collections x gross profit %
4. Deferred gross profit = installment receivables x gross profit %

Question 41

Development cost capitalize on IFRS if

Answer 41

Successful defense

Question 42

IFrS intangible assets use cost same as GAAP or

Answer 42

Revaluation method

Question 43

A/R reported at NRV

Answer 43

A/R - allowance for doubtful act

Question 44

2 GAAP methods bad debt expense

Answer 44

Allowance method

Direct write off method Not GAAP

Question 45

Income statement approach

Answer 45

Bad debt estimate % of net credit sales resulting bad debt expense

Question 46

Balance sheet approach

Answer 46

Bad debt estimates as percentage ending a/r or based on aging a/r bad debt expense is plug

Question 47

Pledging

Answer 47

Note disclosures only

Question 48

Factoring with recourse sell

Answer 48

Seller retains risk