FAR 3

Question 1

An entity is required to disclose

Answer 1

Reconciliation
Effect of preferred dividends
Anti-diluted security

Question 2

Income tax-basis financial statements differ from those prepared under GAAP in that income tax-basis financial statements:

Answer 2

recognize certain revenues and expenses in different reporting periods

Question 3

when applying the lower of cost or market inventory method

Answer 3

the lowest total inventory amount is obtained the the lower of cost or market determination is made on an item by item basis because the lower value for each item is selected.

Question 4

The governmental fund measurement focus is on the determination of

Answer 4

flow of current financial resources

Question 5

The donation of a professional service is

Answer 5

would increase unrestricted revenues, gains, other support. Expense is also increased

Question 6

To enhance the service potential of the asset by increasing its efficiency or capability

Answer 6

capitalize by debiting the asset account.

Question 7

comprehensive income includes

Answer 7

all changes in equity during a period except those resulting from owner’s investments and distributions to owner.

Question 8

other comprehensive income items include

Answer 8

Foreign currency translation gains

Unrealized gains on available for sale equity securities

Question 9

The under fund pension liability represents

Answer 9

The projected benefit obligation - fair vale of the plan asset

Question 10

Sum of years digits depreciation

Answer 10

Depreciation rate= remaining life/SYD

(Cost-Salvage value) * remaining life/SYD

Question 11

Declining balance depreciation

Answer 11

BV* rate =depreciation for the period

Rate=100%/N=R

If double =2R
If 150% = 1.5R

N=useful life

Question 12

Both the intrinsic value method and the fair market value method use—-date to measure the cost for stock issued to employees.

Answer 12

The grant date

Question 13

the statistical section of a govt’s comprehensive annual financial report is

Answer 13

always considered part of required supplementary information

Question 14

the proper measurement of an impaired asset held for sale is

Answer 14

lower of fair value less cost to sell or carrying amount

Question 15

there are 3 acceptable method to report taxable income:

Answer 15

cash method
accrual basis
hybrid method

Question 16

cumulative foreign exchange translation loss should be report as

Answer 16

a contra account of stockholder’s equity

Question 17

A statement of functional expenses is required for Voluntary health and welfare entities

Answer 17

Including program, fund raising and management

Question 18

When using the indirect method, a gain from sale of used equipment for cash should be reported in

Answer 18

operating activities as a deduction from income

Question 19

Basic earnings per share for income form continuing operations and for net income are reported:

Answer 19

on the face of the income statement