F2 M7 Special Purpose Frameworks

Question 1

What does OCBOA stand for?

Answer 1

Other comprehensive bases of accounting

Question 2

OCBOA financial statement presentations (does/doesn’t) require statement of cash flows

Answer 2

Does not

Question 3

The statement of _____ is the balance sheet equivalent under the cash basis of accounting.

Answer 3

Statement of cash and equity

Question 4

What should the financial statement titles for OCBOA do in regards to accrual basis financial statements?

Answer 4

They should differentiate their titles from accrual basis statements

Question 5

What is the approach to converting from cash-basis to accrual basis:
(Add/Subtract) Increases in current assets
(Add/Subtract) Decreases in current assets
(Add/Subtract) Decreases in current liabilities
(Add/Subtract) Increases in current liabilities

Answer 5

Add increases in current assets
Subtract decreases in current assets
Add decreases in current liabilities
Subtract increases in current liabilities

Question 6

Formula:

Convert cash basis revenue to accrual basis

Answer 6

Cash Basis Revenue
   \+ Ending AR
   - Beginning AR
   - Ending unearned revenue
   \+ Beginning unearned revenue
   Accrual Basis Revenue

Question 7

Formula:

Convert cash paid for purchases to accrual basis cost of goods sold

Answer 7

Cash paid for purchases
   \+ Ending AP
   - Beginning AP
   - Ending inventory
   \+ Beginning inventory
   Cost of Goods Sold

Question 8

Formula:

Convert cash paid for operating expenses to accrual basis operating expenses

Answer 8

Cash paid for operating expenses
   \+ Ending accrued liabilities
   - Beginning accrued liabilities
   - Ending prepaid expenses
   \+ Beginning prepaid expenses
   Accrual basis operating expenses