FAR - B/S & Revenue Recognition Flashcards
Is interest-bearing savings account included as a cash?
Yes. Interest-bearing accounts are included in cash.
What is overdrawn account is classified?
The overdraft is reported as a liability; however, If you have other cash with positive amount in the same institution, you can net the amount and report it.
If a check is drawn but not mailed out, what are the procedures?
When a check is written during a period but not mailed until after the end of the period, it is considered not to have been written and is added back to the checkbook balance.
What is cash in bond sinking fund account classified as?
An investment (LT Asset) It is a restricted asset of a corporation that was required to set aside money for redeeming or buying back some of its bonds payable.
What is a post-dated check from a customer classified as?
Receivable.
Post dated check is a check on which the issuer has stated a date later than the current date.
A definition of cash equivalent
Any security that can easily be converted into cash that matures within 90 days “from the date of purchase”
What is trading securities classified as?
Current asset
Trading securities includes both debt and equity securities, and an entity intends to sell in the short term for a profit.
Securities = stocks, bonds, options, and warrants.
Accumulated other comprehensive income is reported in which financial statements?
The statement of financial position``
When a buyer has a right to return goods, when do you recognize the sales?
A sale with a right of return
If the amount of returns can be reasonably estimated => sale is made when it is originally made with an allowance for estimated returns.
When the amount of returns cannot be estimated => the sale is not recorded until the buyer’s right to return the goods has expired.
