F4 Flashcards
How do A/R recoveries effect A/R?
You debit and credit A/R for the same amount since the recovered amount restores the A/R balance and the collection reduces the A/R balance
How do unearned fees affect the A/R balance?
They are subtracted from total cash collections from the year (like increasing A/R)
How to expected exchanges affect net sales, inventory, or cost of sales?
They don’t, only estimated returns affect net sales.
When is a current liability reclassified as a non current liability?
When there is a noncancelable financing agreement or actual refinance prior to issuing the financial statements.
(same for short-term obligations, need to establish intent and ability to refinance)
How are bond discounts classified?
They reduce the carrying amount of the bond.
How does collection on a written off amount affect A/R and its allowance account?
No effect on A/R (debit and credit to wash) and an increase to the allowance account, because the written off amount had decreased it and you are restoring it back.
How are deferred taxes classified?
They are classified based on the related asset (non current for depreciation on fixed assets)., or when they are expected to reverse if not related to an asset.
How is inventory valued for US GAAP?
Lower of cost of market if using LIFO or retail value method.
Market= the median value of market ceiling, replacement cost and market floor
How is inventory valued for IFRS?
The lower of market cost or net realizable value.
net realizable value= net selling price-costs to complete or dispose OR Market ceiling.
*us gaap if not using LIFO or retail value method
How is COGS calculated when you have goods on consignment?
The BASE inventory formula includes shipping costs to consignee and inventory held by consignee
How can you figure COGS when you have the sales amount and gross margin?
Take sales x (1 + gross margin)
*gross profit is also gross margin
How is investment property reported for IFRS financials?
- as cost less accum. depreciation or FV. IF reported at cost, FV must be disclosed.
- any gains from FV adj. are posted in income.
How do allocate cost when items purchased in a basket?
According to the ratio of appraised values (FV)
What happens the average accum. expenditures exceed the construction borrowing?
The excess expenditures are multiplied by the other loan interest rate.
How do you calculate depletion?
Get the depletion base, includes estimated restoration costs. Then, divide by total units to get rate.
Multiply rate by units completed.
