FAR Deck 1 Flashcards
What are components of other comprehensive income?
-Unrealized gains or loss on available for sale investments
-foreign currency translation adjustments
-Certain unrecognized gains and losses on pension benefits
-Certain gains and losses on derivatives.

Two primary qualitative characteristics of financial reporting?
Faithful Representation
-completely neutral and free from error
Relevance
-predict and confirmatory your material value
Four Enhancing Characteristics
Comparability
Verifiability
Timeliness
Understandability
Three main aspects of GAAP
Recognition
Measurement
Disclosure
Equation for COGS
Beginning Inventory + Purchases - Ending Inventory = COGS
Gross Margin
Gross Profit/Net Sales
Profit Margin
Net Income/Net Sales
Earnings per Share
Net Income/ Weight average # of shares outstanding
A/R Turnover
Credit Sales/ Avg. A/R
Inventory Turnover
COGS/ Avg. Inventory
Days Sales in Inventory
365/Inventory Turnover
(Inventory Turnover = COGS/ Avg. Inventory)
Historical cost Inventory
You can principle of historical cost, requires assets as well as liabilities, to be recorded, and carried on the book at cost 
Historical cost Inventory
You can principle of historical cost, requires assets as well as liabilities, to be recorded, and carried on the book at cost 
Are governmental, financial reporting should provide information to assist…
- Making social and political decisions.
- Assessing whether current US citizens receive services, but shifted part of the payment burden to future years citizens.
When there is a change to the generally accepted accounting principles
Accounting standards update
Explain modified accrual method
When revenue is measurable and available for instance, when a government levy’s taxes, they don’t automatically recognize revenue because they have not collected on the taxes so they will only recognize revenue when they can measure how much they are collecting and see how much is actually available
Primary objective of financial reporting
To provide information that is useful for economic decision making
According to the fast, be conceptual framework, the process of reporting an item in the financial statements of an entity is…
Recognition
GASB’s  primary goal for the SEA concepts is…
Provide fundamental reporting characteristics to help prepare is develop consistent reporting
Accumulated Benefit Obligation
The actuarial present value of benefits, whether vested or non-vested attributed by the pension benefit formula to employee services rendered before a specific date, and based on employee services in compensation, prior to that date
If individual component units or consolidated, uncombined, governmental statements, the data, for the individual units must be presented in which of the following?
Notes to the financial statements, or in the combining statements
At the commencement date of an operating lease, a lessor should…
Defer initial direct cost
For state and local governmental units, generally accepted principles require that encumbrances outstanding at year end be reported as…
Reservations of fund balance
If no profit and loss, sharing an arrangement specified in the partnership agreement, the revised uniform partnership act requires?
Profit and loss should be shared equally