FAR 16

Question 1

Fees of finders and consultants are?

Answer 1

Expensed at the period incurred.

Question 2

Registration fees for equity securities issued are?

Answer 2

Decrease additional paid in capital.

Question 3

The general guidelines for assigning amounts to the inventories acquired provide for:

Answer 3

Finished goods to be valued at estimated selling prices, less both costs of disposal and reasonable profit allowance.

Question 4

When calculating stockholders equity:

Answer 4

Add in noncontrolling interest piece (FV of acquired compnay * NC %) + NCI Share of net income - NCI share of dividends

Question 5

The stock options granted in a compensatory stock option plan should reduce the stock options outstanding account on the

Answer 5

Excercise date.

Question 6

How do you record the purchase of treasury stock?

Answer 6

Dr.Treasury Stock
Dr. APIC
Dr. Retained Earnings
Cr. Cash

Question 7

How do you record the re-issuance of treasury stock?

Answer 7

Dr. Cash
Cr. Treasury Stock
Cr. APIC

Question 8

If you re-issue treasury stock below cost, what is the journal entry?

Answer 8

Dr. Cash
Dr. APIC-T/S
Dr. Retained Earnings
Cr. Treasury Stock

Question 9

The primary purpose of a quasi-reorganization is to give a corporation the opportunity to?

Answer 9

Eliminate a deficit in retained earnings.

Question 10

Are gains and losses on treasury stock transactions recorded on the income statement?

Answer 10

Never. Gains are recorded by increasing APIC-T/S and Losses are recorded by first eliminating any balance in APIC then decreasing retained earnings.

Question 11

What are the required disclosures of a statement of cash flows under the direct method ?

Answer 11

The major classes of gross cash receipts and gross cash payments.
The amount of income taxes paid
A reconciliation of net income to net cash flow from operations.

Question 12

What do investing activities include?

Answer 12

Acquisitions and sales of long term assets or investment assets.

Question 13

What do financing activities include in cash flow?

Answer 13

Obtaining resources from owners and providing them with a return: borrowing money and repaying borrowed amounts. Dividends paid, no declared, should be included as an outflow of cash from financing activities.

Question 14

What should be disclossed as supplemental info in statement of cash flows?

Answer 14

Conversion of debt to equity.

Question 15

What is the primary purpose of a statement of cash flows?

Answer 15

Provide relevant information about the cash receipts and cash disbursements of an enterprise during a period.

Question 16

What consistios of operating cash flow?

Answer 16

Selling products, collecting receivables, purchasing inventory, paying vendors, purchasing supplies, paying vendors, paying taxes, purhcasing selling tading securities, collecting interst on investment, collecting dividends on investment, paying interest on debt.

Question 17

What is considered investing cash flow?

Answer 17

Purchasing long term asets or long term investments for cash, selling long term assets or investments cash proceeds

Question 18

What are financing cash flow?

Answer 18

Borrowing funds, paying principal on debt, issuing common or preferred stock, paying dividends on common or preferred stock, repurchasing stock (treasury shares)

Question 19

Differences between IFRS and GAAP, CASH FLOW

Answer 19

Interest received, dividends received, dividends paid (GAAP CFO) (IFRS CFO OR CFI)

Question 20

Dividends paid IFRS vs. GAAP

Answer 20

GAAP: CFF IFRS: CFO or CFF

Question 21

Indirect method of cash flow?

Answer 21

Start with net income

Question 22

Direct method has seperate disclosure:

Answer 22

Need to include reconciliation to net income