FAR 3 Flashcards
What is factoring AR without recourse?
Factoring AR without recourse is sales transaction.
Can post dated checks be used as cash and cash equivalent?
No, because it is dated after the Balance sheet date.
Are consignment of goods included as inventory?
Consignment of goods to be received are not included in inventory until sold.
What is the Sum-of-Year Digits accelerated Dep method?
This method takes the asset’s expected life and adds together the digits for each year.
What is the double declining balance (DDB) depreciation method?
The DDB depreciation method is a common accounting method of depreciation wherein an asset’s value depreciates at twice the rate it would under straight-line depreciation
Can expenses used to improve efficiency be capitalized?
Expenditures paid to improve efficiencies can be capitalized.
When is interest incurred capitalized and expensed regarding construction?
Interest is capitalized during construction but expensed after construction.
What does the allowance for uncollectible acct do if the customer pays for what was originally written off?
Allowance for uncollectible acct increases.
Are organizational and start up costs capitalized?
Organizational and start up cost are expensed as incurred.
Is inventory included in the cosignees inventory balance?
Inventory on cosignment are not included in the cosignee’s inventory.
How to calculated Weighted Amount of Accumulated Expenditures?
Add payments as construction progresses and multiply by the months outstanding. When year or period is completed, divide by the total months.
