F5 Flashcards
AP gross method account (DR or CR balance) and when recorded
Record discount when taken
Purchase discounts - CR balance
AP net method acct (DR or CR balance) and when recorded
Purchase discounts NOT taken, DR balance
Recorded when NOT taken
How can current debt be reclassified as non-current?
Company must have INTENT and ABILITY to refinance evidenced by:
Subsequent event (actually refinancing after BS date -or- Non-cancelable financing Arrangement
Sales Tax are NOT a what?
They are NOT an expense
What two methods are allowed for property taxes?
Expense when bill received or accrue
Doesn’t matter as long as consistent
How to calculate bonus?
Bonus = R (NI - taxes) Taxes = Tax_Rate * (NI - bonus)
Combine formulas and algebra
If vacation time carries over and is paid at X2 salary, when does the difference is salary expenses hit?
When paid:
Vacation Payable X1 rate
Salaries Expense (Plug)
Cash
Accrual of sick pay benefits IFRS vs GAAP
IFRS: as services rendered
GAAP: vested amounts
What is asset Retirement obligation under IFRS?
Decommissioning Liability
Required to be estimated at best estimate of expenditure, US GAAP requires initial measurement @ FV
Exit and disposal activities
Cost of involuntary EE termination (closing a branch / region / facility)
Is commitment to an exit plan enough to recognize a liability for exit and disposal costs?
No - not by itself
Unmarked checks at year end - effect on AP
AP should be increased if the checks aren’t mailed until AFTER the bs date
Should a Liability that requires the periodic payment of interest or secured by collateral be classified as a AP?
No, the former is an accrued Liability or debt and the latter is classified as a loan payable
If stock was issued to retire debt as a subsequent event, should it be recorded?
Move the current debt to non-current since it is being retired with equity INSTEAD of current assets
A deferred tax liability expected to reverse within 90 days is current - true of false
Non-current always
After the property is fully depreciated any change in the asset Retirement obligation will be recognized where?
Profit and loss
Same for IFRS and GAAP
Is there any difference between GAAP and IFRS for asset Retirement obligations?
Nothing material, just different verbage
Should the subsequent event of dividends declared be accrued for?
No - dividends payable are recorded when declared and are NOT accrued
What kind of cost is a cost to relocate EEs after closing down a location?
Exit and disposal cost
10% maintenance fee based on interest earned =
10% * interest earned
When to accrue vacation?
- Services already rendered
- The obligation relates to vested OR accumulated rights
- The amount can be reasonably estimated
- And payment probable
Should sick pay accrue?
Only if vested (rare)
If the terms of the deferred compensation arrangement attribute or a portion of expected future benefits to a period greater than one year, when should the related cost hit?
Over the period of REQUIRED service - expense to contingent years
CPA-08506
Contingencies - w/ range of equally likely amounts what to record?
GAAP
Minimum amount so you don’t have a cookie jar for later