Far 5

Question 1

under the fair value method in recording on an investment, dividends received and increases in equity investments are recognized in ____ ________ and the unrealized __________ loss is also included in net income

Answer 1

NET INCOME; HOLDING

Question 2

Bond investments that are intended to be sold within a year are classified as __________ securities because the bonds are held for sale for the purpose of selling them in the near term

Answer 2

TRADING

Question 3

________ securities reflect all realized gains and unrealized gains and losses in __________

Answer 3

TRADING; INCOME

Question 4

According to the Current Expected Credit Loss (CECL) model, which applies to AFS and held for sale debt securities, expected credit loss is recorded when the amortized cost _________ the present value of the principal and interest expected to be collected

Answer 4

EXCEEDS

Question 5

When there is excess in fair value, that amount is ___________ and if there is excess in inventory, ______ goes up and ___ _______ goes down

Answer 5

AMORTIZED; COST OF GOODS SOLD; NET INCOME

Question 6

Under equity method, a company recognizes it’s portion of net income then deducts any ___________

Answer 6

AMORTIZATION

Question 7

When calculating carrying amount of an investment under the equity method, _________ dividends then when calculating income, use net income * percentage ownership

Answer 7

DEDUCT

Question 8

Preferred stock doesn’t not allow an investor to exercise _________ _________ so is accounted for using the fair value method

Answer 8

SIGNIFICANT; INFLUENCE

Question 9

Dividend income under the equity method ___________ the carrying amount of the investment. Dividends under the equity method are considered ________ of ___________

Answer 9

DECREASES; RETURN; CAPITAL

Question 10

Under the equity method, goodwill is ignored (T OR F)

Answer 10

TRUE

Question 11

When a parent company sells equipment to a subsidiary, the equipment will be shown at _____ then depreciation will continue as if the equipment hadn’t been sold

Answer 11

COST

Question 12

First step in calculating noncontrolling interest: __________ price/ _________ percentage= noncontrolling interest at purchase date

Answer 12

PURCHASE; OWNERSHIP;

Question 13

calculating a subsidiary’s retained earnings: 1/1 balacnce+net income-__________=retained earnings 12/31

Answer 13

DIVIDENDS

Question 14

only __________ interest of subsidiary will flow up to retained earnings of parent company

Answer 14

CONTROLLING

Question 15

Under the Acquisition method in reporting for consolidated FS, ________ from subsidiary from before the sale is not recorded. Only the equity of the parent is recorded

Answer 15

Equity

Question 16

When using the Acquisition method, the retained earnings of the parent company is reported on the consolidated retained earnings without regard to the subsidiary’s retained earnings (T of F)

Answer 16

True

Question 17

Under the goodwill method in calculating a partner’s capital, __________ benefiting partner account by adding the presumed value then subtracting the total contributions then adding it to benefiting partner

Answer 17

INCREASE

Question 18

under the goodwill method any __________ paid to a retiring partner is credited to the remaining partner’s capital accounts

Answer 18

PREMIUM

Question 19

a partnership can use the bonus method when dissolving a company because the bonus method increases or decreases each individual partner’s accounts without changing total net assets of the partnership (T or F)

Answer 19

TRUE

Question 20

deferred tax asset and liab. are added or subtracted to _________ ___ Expense. Deferred income tax is an __________ and deferred tax benefit is a __________

Answer 20

INCOME; TAX; ADDITION; SUBTRACTION

Question 21

items like __________ and ___________ accounts expense are items included on both tax return and accounting records and are __________ differences and result in a deferred tax asset or liability

Answer 21

DEPRECIATION; UNCOLLECTABLE; TEMPORARY

Question 22

_______ (Paid) and and proceeds from the sale of ___________ stock provide net cash provided by financing activities

Answer 22

DIVIDENDS; TREASURY

Question 23

deferred tax asset and liab. are added or subtracted to income tax expense. Deferred income tax is an ________ and deferred tax benefit is a _________

Answer 23

ADDITION; SUBTRACTION

Question 24

items like depreciation and uncollectible accounts expense are items included on both tax return and accounting records and are ___________ differences and result in a deferred tax asset or liability

Answer 24

TEMPORARY

Question 25

subtract __________ tax from income tax payable to get the income tax expense for the current period

Answer 25

DEFERRED;

Question 26

when an available for sale debt security is sold, the unrealized gain on the transactions should be _________ from OCI

Answer 26

SUBTRACTED

Question 27

When a partnership uses the equity method of accounting, if FIFO inventory and land exceed their carrying amounts, inventory excess will _________ and Land excess will __________ on the earnings of the entity

Answer 27

DECREASE; HAVE NO EFFECT