F2 Flashcards

1
Q

What is the balance sheet presentation for installment sales?

A

Accounts receivable

Less: deferred gross profit

= Balance

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2
Q

Installment sales J/E: record the sale.

A

DR Installment Sale A/R

CR Inventory

CR Deferred Gorss Profit (contra-receivable)

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3
Q

Installment sale J/E: when cash is collected

A

DR Cash

CR Installment sales accounts receivable

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4
Q

Installment sale J/E: record profit on collection:

A

DR Deferred gross profit

CR Realized gross profit on installment sale

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5
Q

Cost recover JE: record the sale

A

DR Cost recovery receivable

CR Inventory

CR Deferred gross profit

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6
Q

Cost recovery JE: record collection

A

DR Cash

CR Cost recovery receivable

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7
Q

Cost recovery JE: final collection and excess received over costs

A

DR Cash

CR Cost recovery receivable

DR Deferred gross profit @ amount calculated as profit

CR Realized gross profit on cost recovery sales @ amount calculated as profit

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8
Q

Installment sales: deferred gross profit formula

A

Installment receivable x GP %

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9
Q

Installment sales: earned gross profit formula

A

Cash collections x GP %

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10
Q

Under US GAAP, do you capitalize or expense R&D incurred based on contract for 3rd party?

A

You expense this R&D.

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11
Q

R&D incurred for something that’s going to be used for internal purposes only: do you expense it or capitalize it?

A

You capitalize it.

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