Far 2 Flashcards
Examples of input methods to recognize revenue include, resource ___________, ________ hours expended and costs ________. Milestones achieved is an example of an ________ method of revenue recognition
consumption; Labor; incurred; output
financial statements of all prior periods should be restated when there is a change in entity such as resulting form , change in companies in _____________ FS and consolidated FS vs. previous individual financial statements
Consolidated
change from ________ basis of accounting will be reported as a prior period adjustment resulting from the correction of an _______ on the FS
accrual; error
when depreciation expense is incorrectly recorded in Yr 1 for the full expense of the asset when it should have been depreciated at straight line, the correction would be to _______ the full amount of the asset, then credit _________ ___________ for the years that have passed, and retained earnings of the leftover the the full expense would have erroneously reduced Net income
debit; accumulated depreciation;
when there is acct principle is inseparable from a change in accounting estimate the effect should be reported as a _________ of income from __________ operations
component; continuing
summary of significant accounting policies should disclose policies such as basis of ___________, _________ methods, revenue ____________, accounting principles and methods
consolidation; depreciation; recognition
only a footnote disclosure is required for a “__________ _________” loss and nature of contingency should be disclose
reasonably possible
subsequent events occur after the balance sheet date but before the financial statements are __________. A subsequent event will only be recognized on the FS if it relates to a condition that __________ as of the balance sheet date.
issued; existed
Cash basis to accrual basis conversion: Add: increases in current ______ ;Subtract: _________ in current assets; Add: Decreases in _________ liabilities; Subtract: _________ in current liabilities
assets; decreases; current; increases
Conversion from cash basis revenue to accrual basis revenue:
add: _________ accounts receivable; ___________beginning accounts __________; Subtract __________ unearned (or deferred) revenue
Add ________ unearned (or deferred) revenue
Ending; Subtract; Receivable; ending; beginning
Net profit margin = Net ______ / Net _______
Income; Sales
Inventory turnover = Cost of goods sold/ Average ________
inventory
Debt to equity formula
Total Liabilities / Total equity
Return on equity = Net income / _______ _____ _________
average total equity
Return on assets = Net ________/ Average total ________
income; assets
