FAR 2B Flashcards
What would not appear on the Income Statement prepared using IFRS?
Extraordinary items.
IFRS requires a classified Statement of Financial Position. What are the required classifications?
Current and Non-current Assets and Liabilities.
The following information pertains to Grey Co. on December 31, 2003: -Checkbook balance $12,000 -Bank statement balance $16,000 -Check drawn on Grey’s account, payable to a vendor, dated and recorded 12/31/03 but not mailed until 1/10/04 $1,800 On Grey’s December 31, 2003 balance sheet, what amount should be reported as cash?
The correct cash balance is the balance per the checkbook ($12,000) plus the $1,800 check written to the vendor, for a total of $13,800.
The land held for resale is a current asset because
it is expected to be sold in the next year
Cash equivalents include investments that have an “original maturity” of…
three months or less
On October 31, 2005, Dingo, Inc. had cash accounts at three different banks. One account balance is segregated solely for a November 15, 2005, payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance. How should these accounts be reported in Dingo’s October 31, 2005, classified balance sheet?
-The segregated account should be reported as a non-current asset -The regular account should be reported as a current asset -The overdraft should be reported as a current liability
On June 1, 2005, Pitt Corp. sold merchandise with a list price of $5,000 to Burr on account. Pitt allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made FOB shipping point. Pitt prepaid $200 of delivery costs for Burr as an accommodation. On June 12, 2005, Pitt received from Burr a remittance in full payment amounting to
$2,944 $5,000(1 - .30)(1 - .20)(.98) + $200 = $2,944.
When the allowance method of recognizing uncollectible accounts is used, the entry to record the write-off of a specific account
Decreases both accounts receivable and the allowance for uncollectible accounts
When the allowance method of recognizing bad debt expense is used, the allowance would decrease when a(an)
Specific uncollectible account is written off.
When you have a Zero interest or Non-interest bearing note, you record a discount on note receivable? Yes or no?
Yes
Which of the following statements, if any, concerning the modified cash basis of accounting is/are correct? I. The modified cash basis of accounting employs some elements of accrual accounting. II. To be acceptable, modifications to the cash basis of accounting must have substantial support in practice.
Both I and II. The modified cash basis of accounting employs some elements of accrual accounting (Statement I) and the modifications to cash basis must have substantial support in practice (Statement II). Both statements are correct.
The IFRS hierarchy, as presented in IAS 8, includes:
-First, the requirements in IFRS dealings with similar or related issues; -Second, the definitions, recognition criteria, and measurement concepts for assets, liabilities, income, and expenses in the Framework; -Lastly, the most recent pronouncements of other standard-setting bodies that use a similar conceptual framework to develop accounting standards, other accounting literature, and accepted industry practices, to the extent that these do not conflict with IFRS or the Framework.
IASB’s due process procedures includes the following steps.
- Add the item to the Working Agenda 2. Discuss the issue 3. Prepare the Discussion Paper 4. Publish the Discussion Paper 5. Issue the Exposure Draft 6. Analyze comments to the Exposure Draft 7. Issue the IFRS
