FAR #1 Flashcards
What is comprehensive income?
Starts with net income, add/subtract U/R gain/loss on AFS securities, foreign currency translation gain, prior service cost not recognized in net periodic pension cost.
What is OTHER comprehensive income?
individual items that makeup comp income, does not start with net income.
How are contingencies gains recorded?
Not recorded until received, disclosed in notes BUT contingencies liabilities if probable and reasonably estimable are recognized.
The measurement focus on governmental fund accounting is:
Current financial resources.
What is the primary purpose of the statement of activities of a nongovernmental not-for-profit?
To report the change in net assets for the period, basically, the P&L, reports activities vs. balances.
How do REALIZED gains/losses get recorded on the Income Statement?
As part of net income, U/R G/L is reported as OCI.
What is included in the operating section of the SCF?
Normal business activities, doing what you do + interest paid & dividends revenue + gains on sale of LT investments
What is included in the investing section of the SCF?
Changes in LT assets.
What is included in the financing section of the SCF?
Interactions with owners and creditors + dividends paid to shareholders + principal repayments on LT debt.
Cash to accrual, operating expense figure, do you add or subtract an increase in assets?
Subtract increases in Assets, Add increases in Liabilities
Accrual to cash, net income figure, what does ADD ILDA mean?
Add Increases in Liabilities, Add Decreases in Assets
Subt. Decreases in Liabilities, Subt. Increases in Assets
On the reverse, cash to accrual, net income figure, what is the opposite of ADD ILDA?
Subtract Increases in Liabilities, Subtract Decr in Assets
Add Dec in Liabilities, Add Increases in Assets
What is the JE for write-off and recovery of bad debt?
write-off= debit AR, credit allowance for bad debt
if funds are later rec’vd = debit cash, credit AR
SCF indirect method bond premiums & bond payable disc amortization are they added or subtracted?
Indirect SCF they are added.
Bond discounts & bond payable premium amort are subtracted
SCF unamortized bond discount how reflected?
Add to net income in operating activities the word unamortized indicates a bond discount payable.
Gain from sale of used equipment reported on SCF?
Operating activities, deduction from net income
Working Capital
CA-CL (current assets - current liabilities)
Current Ratio
CA/CL (current assets / current liabilities)
Quick Ratio
cash + AR + sec. invest. / CL (quick assets / current liabl)
AR Turnover & Days to collect
Net credit sales / net avg AR (beg bal AR + end bal AR / 2)
365 / AR TO figure from above
Inventory Turnover
COGS / avg inventory
Debt to Total Assets
total debt / total assets
Return on Assets
net income / avg total assets
Debt to equity ratio
total debt / total SE
