F2-rest

Question 1

Under the completed contract method, revenue is recognized

Answer 1

when the contract is complete, however expected losses are recognized immediately

Question 2

U.S. GAAP “completed contract” method to account for a long-term construction contract

Answer 2

=Contract price-cost incurred-estimated cost to complete

Question 3

When the “percentage of completion” method of recording revenue is used

Answer 3

Contract price
-Total estimated cost
=Profit

Cost incurred to date/ Total estimated cost=%

Profit *%=Gross Profit

Question 4

accumulated cost incurred + cumulative gross profit recognized > cumulative billing

Answer 4

current asset

cost incurred + profit recognized > billing

Question 5

accumulated cost incurred + cumulative gross profit recognized < Cumulative billing

Answer 5

current liability

cost ncurred +profit recognized < billing

Question 6

Installment sale method

Answer 6

Delays revenue recognition by recognizing revenue as cash is collected rather than accelerating revenue recogniton

Question 7

Cost recovery method

Answer 7

Delays revenue recognition until all costs have been collected rather than accelerating revenue recognition.

Question 8

Cost method

Answer 8

when installment sale are material, there is no reasonable basis for estimating collectibility

Question 9

Installment sale method should be used only if

Answer 9

the amount ultimately collectible can not be estimated, impossible to established a reasonable bad debt percentage. it is possible some amount will be collected, but cannot be projected.

Question 10

Cost recovery method used when

Answer 10

collection is in doubt

Question 11

Under current cost accounting

Answer 11

specific price index used

Question 12

Current cost/constant dollar

Answer 12

both specific and general price level change

INFLATION AND APPRECIATION

Question 13

Historical cost/ nominal dollar

Answer 13

no price level change

NEITHER

Question 14

Current cost/nominal dollar

Answer 14

specific price level change(specific price index)

APPRECIATION

Question 15

Historical cost/constant dollar

Answer 15

general price level change

INFLATION

Question 16

Lack of commercial substance gain/loss

Answer 16

Book value approach
no boot=no gain
boot paid=no gain
25%= full gain
loss=full loss

Question 17

With commercial substance

Answer 17

Fair Value approach

future cashflow

Question 18

commercial substance

Answer 18

either (1) the risk, timing, and amount of the expected future cash flows from the asset transferred differs significantly from the risk, timing, and amount of the expected future cash flows from the asset received, or (2) the entity-specific value of the asset received differs significantly from the asset transferred.

Question 19

proper accounting for nonmonetary exchanges that have commercial substance

Answer 19

recognizes gains and losses immediately.

Question 20

Installment method

Answer 20

no reasonable basis for estimating the DEGREE of collectibility

Question 21

The functional currency of a company may be:

Answer 21

A foreign entity’s local currency, which is typically the one in which the entity keeps its books;
The currency in which the financial statements will be presented, which is the currency of the parent company; or

A foreign currency other than the one in which the foreign entity maintains its books.

Question 22

Functional currency cannot be the local currency if

Answer 22

the foreign entity operates in a highly inflationary environment (i.e., approximately 100% over three years)

Question 23

Nonmonetary Exchange JE

Answer 23

New
Loss
Cash Received
Accum Deprciation
              Old
              Gain
              Cash Recieved

Question 24

Installment Method JE

Answer 24

Record Sale:
Installment A/R
Inventory (COGS)
Deferred Gross Profit (contra-rec)

Record cash collection:
Cash
Installment A/R

Record Profit on collection:
Deferred Gross Profit
Realized gross profit

Question 25

Cost Recovery Method JE

Answer 25

Record sale:
Cost recovery A/R
Inventory
Deferred Gross Profit

Collection year 1:
Cash
Cost recovery A/R

Collection year 2:
Cash
          Cost recovery A/R
Deferred gross profit
          Realized gross profit

Question 26

Funtctional

Answer 26

Translation

PU(F)ER-OCI

Question 27

Dysfunctional

Answer 27

Remeasurement

(I)DEA-I/S