FAR 14 Flashcards
Is it proper to recognize revenue prior to the sale of merchandise when the revenue will be reported as an installment sale?
No. Revenue can be recognized prior to the completion of a long term project but generally not prior to a merchandise sale, especially not one on installment method.
Under the completed contract method, revenue is recognized when complete, however expected losses are recognized when?
Immediately in their entirety.
Contract Price
Less: Costs incurred
Less: Estimated Cost to Complete
The lessee should record the capital (finance) lease at the lower of?
1) Present value of minimum lease payments or 2) FV of asset at the inception of lease.
Could current cost financial statements report holding gains for goods sold during the period and holding gains on inventory at the end of the period?
Yes. They also include holding gains and losses on all other accounts in the financial statement.
A major exception to the general rule of expenditure accrual for governmental funds under the modified accrual basis related to unmatured:
Principal of general long term debt and interest on general long term debt.
(Interest and principal on long term debt are recroded when they become due and payable, not when they accrue)
Interfund transfers are recorded as?
Other financing sources (uses) rather than revenues (expenditures) for governmental funds.
For proprietary funds, they are recorded as interfund transfers .
(Although these transfers are not recorded as revenues or expenditures, they do affect both funds’s expendable resources and results of operations.
What is considered unrestricted revenues, gains and support for a labor union?
Per Capita Dues
Initiation Fee
Sales of organizational supplies
Donations of medicines are included in? (Medicine constitutes part of the ongoing major operation of the hospital)
Other operating revenue at fair value of the medicine.
Percentage of completion method: If the sum of cumulative costs incurred + cumulative gross profit recognized exceeds cumulative billings, the excess is reported as a?
Current asset.
If cumulative billings exceeds the sum of cumulative costs incurred + cumulative gross profit recognized, the difference is reported as a?
Current liability.
When revaluing a patent under IFRS:
remember to subtract amortization from the carrying value.
Costs to develop computer software for use internally and costs of market research activities should be?
Expensed.
At the inception of a capital (finance) lease, the guaranteed residual value should be:
Included as part of minimum lease payments at PRESENT VALUE.
A budgeted excess of revenues over appropriations should be credited to?
Budgetary control
Dr. Estimated Revenues
Cr. Appropriations
Cr. Budgetary Control
What type of revenue should be accounted for in a governmental fund type?
Property taxes.
