FAR 4B Flashcards
A debtor and a creditor have negotiated new terms on a note. How can you determine whether the restructuring is a troubled debt restructure?
If the present value of the restructured flows using the original interest rate is less than the book value of the debt at the date of the restructure.
When collectability is reasonably assured, the excess of the subscription price over the stated value of the no par common stock subscribed should be recorded as…
Additional paid-in capital when the subscription is recorded
There is no gain on the reissue of…
treasury stock.
It is at the date of ________ that a dividend has its effect on the value of the firm and on working capital.
declaration
A liquidating dividend is a return of __________ .
capital.
A property dividend should be recorded in retained earnings at the property’s…
Market value at date of declaration.
When the carrying value and market value of an asset distributed as a property dividend are different, the resulting gain or loss on disposal is recognized as ordinary income…
ordinary income.
The declaration of a stock dividend does not cause a _______ to be reported.
liability
Retained earnings are ______ in a stock dividend, and common stock and possibly additional paid-in capital are _______ .
debited, credited
This method recognizes no income until the cash collections exceed the cost of the equipment and would tend to overstate income the least.
The cost-recovery method.
When would a company use the installment sales method of revenue recognition?
When installment sales are material, and there is no reasonable basis for estimating collectibility.
The calculation of the income recognized in the third year of a five-year construction contract accounted for using the percentage of completion method includes the ratio of…
Total costs incurred to date to total estimated costs.
