Far 2 Flashcards
What amounts would assets and revenue translate for consolidation
Assets and liabilities are translated at the EXCHANGE rate at fiscal year end. Revenues, expenses, gains, and losses are usually translated at WEIGHTED_AVERAGE rate for the period.
Impairment loss is recognized only when CV of long-lived asset is not RECOVERABLE.
Intangible assets can be amortized
An intangible asset DISTINCT from goodwill with a finite useful life to the reporting entity is amortized over that useful life. Because the entity expects the copyrighted material to generate positive cash flows for approximately 25 years, the copyright is amortized over 25 years.
royalty vs patent
Royalty revenue you can recognized when, or as, the later of the following occurs: (1) the subsequent sales or usage occurred or (2) the entity satisfied the related performance obligations.
WHERE Patent revenue is recognized when the license is granted, discounted to present value using the interest rate implicit in the agreement. PV of future payments.
not subject to the application of intraperiod income tax allocation
Operating income.
The financial statement that provides a summary of the firm’s operations for a period of time is the
I/S
What is asset retirement obligation (ARO) ?
Recognizing the fair value of the liability using an expected present value technique.
Foreign currency exchangeable for a dollar increase or decrease between the contract and settlement date?
A gain on a foreign currency receivable and a loss on a foreign currency payable result when the dollar weakens.
Cash dividends record?
On the date of declaration, a cash dividend becomes a legal liability of the corporation (unlike stock dividends, cash dividends cannot be rescinded).
a criterion for capitalization of costs incurred to fulfill a contract with a customer?
The costs generate or enhance resources of the entity that will be used in satisfying performance obligations in the future.
How intraentity tractions post in consolidation level?
In a consolidated balance sheet, reciprocal balances, such as receivables and payables, between a parent and a consolidated subsidiary are eliminated in their entirety, regardless of the portion of the subsidiary’s stock held by the parent. Thus, Wright should report $0 as intraentity receivables.
Non profit organization investment return?
Investment return (income and gains) generally is free of donor restrictions unless its use is limited by (1) a donor-imposed restriction or (2) a law. Most donor-restricted endowment funds are subject to the Uniform Prudent Management of Institutional Funds Act of 2006 (UPMIFA).
A nongovernmental not-for-profit entity should recognize a conditional promise to give when
The barrier is overcome.
When is conditional pledge recognized in Non for-profit entity?
A donor-imposed condition is a barrier that must be overcome before the recipient is entitled to the assets. If it is not overcome, the contributor has a right of return of the assets or the promisor a right of release from its obligation. A conditional promise to give is not recognized until the condition is substantially met (i.e., the barrier is overcome).
A nongovernmental not-for-profit entity’s statement of activities = ?
Income statement
Which of the following funds of a governmental unit uses the modified accrual basis of accounting to prepare its fund financial statements?
Special Revenue Funds
Current Ratio Vs Quick Ratio
If a ratio is GREATER than 1.0 = decrease in denominator and numerator will ICREASE the overall ratio.
However, if a ratio is LOWER than 1.0 = decrease in denominator and numerator will DECREASE the overall ratio.
Liquidating Dividends are use only in addition pain in capital NOT in Retain Earnings because the reason it is called liquidating div because RE doesn’t have enough money to pay from it.
