FAR 4 Flashcards
How should bonds directly related to and expected to be paid by proprietary funds be accounted for?
In the accounts for those proprietary funds.
The funded ratio of a pension plan compares:
The plan’s fiduciary net position as a percentage of the actuarially determined total pension liability.
Does an Agency Fund report revenues?
No. Agency funds merely act as intermediaries (agents) in the process of disbursing the revenues; no claim to the revenues.
A government-wide statement of net position must include:
A distinction between governmental and business-type activities (primary focus is to report the two)
GASB requires as part of required supplemental information:
Information about the use of the modified approach for reporting infrastructure assets.
To be a financially accountable component, it requires:
The primary government being able to impose its will on the component unit and at least half of the component unit’s governing body be appointed by the primary government.
Basic EPS equation:
(net income - preferred dividends)/weighted average of common shares outstanding
How to calculate preferred dividends in EPS:
Par value x number of shares x percentage. This is done regardless whether preferred dividends are declared or not
What is potential common stock for the diluted EPS calculation?
Stock options and other securities that could become common stock in the future
How is a percentage stock divided applied in a basic EPS calculation?
It is applied retroactively to all items before it.
How are stock splits applied?
Retroactively to all items before it
If inventory declines but is expected to recover, is this considered permanent?
No. If inventory declines during a year, do not record until 4th quarter if the decline does not reverse.
Interim financial reporting is viewed as:
An integral part of an annual reporting period.
Planned volume variances in an interim period that are expected to be absorbed by the end of the fiscal period are treated how?
They’re deferred until the end of the interim period, regardless of whether or not they are favorable.
The “income statement” for cash basis or modified cash basis is more appropriately known as:
Statement of Cash Receipts and Cash Disbursements
