FAR 2 Flashcards
Loss contingencies
Accrue if probable and estimable, disclose if reasonable possible
Gain contingencies
Recognised only when realised, disclose if probable and estimatable
Bonds payable
Non current liability
Treasury stocks
Contra equity
Sales discount
Contra revenue
Allowance for credit loss
Contra asset
Purchase is registered when ownership and title of goods are transferred from seller to buyer. In case of issue in purchase order
There is no transfer of title and need not to disclose and accrue
If the loss is reasonably possible
Disclose it
Current asset
Cash
Receivables
Short term investment
Inventories
Prepaid for expenses
Non current assets
Long term investment
Property plant and equipment
Goodwill
Current liability
Accounts payable
Short term debts
Contingent liability
Non current liability
Long term debt
Other liabilities
Deferred long term liability
Stockholders equity
Common stock
Retained earrings
Treasury stock
Capital surplus
Other stockholder equity
Remote in loss or gain
No need to disclose or accrue
In a rising price which will have a higher ending inventory method
FIFO
Change in tax is the
Cash flow
LIFO reserve
Convert LIFO to FIFO
Working capital
Current assets - current liability
Cash conversion cycle
Inventory conversion period + receivable collection period - payable deferred period
BRS TYPE A
Reconcile item in bank books
- outstanding checks
- deposit transit
- bank errors
BRS TYPE B
Change is cash book
- Non sufficient fund
- unrecorded bank charges
- unrecorder bank collections
- cash account error
Account receivable
Trade receivables
Bad debts is referred as
Credit loss
Sale with recourse
Factor does not assume the risk of uncollectible
I.e factor has no recourse
It does bear the credit loss expense
