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FAR > FAR Y101-200 > Flashcards

FAR Y101-200 Flashcards

1
Q

The entity that has controlling financial interest over a Variable Interest Entity is called the _____.

A

Primary Beneficiary

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2
Q

Trading Securities are presented at what amount on the B/S?

A

FMV

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3
Q

Under IFRS, is the direct method of cash flows for operations permitted?

A

Yes, the direct and indirect methods are both permitted under IFRS

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4
Q

Under IFRS, when a class of fixed assets is revalued, asset acct is DR or CR. What is opposite side of entry?

A

Revaluation Surplus Account (Stockholders’ Equity & OCI)

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5
Q

Under IFRS, when is a contingent gain recorded?

A

Contingent gains are not recorded under IFRS. If it is probable, a footnote disclosure may be made

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6
Q

Under what ceircumstance can an entitiy, following IFRS, net their deferred tax items?

A

IFRS allows for netting of deferred tax items for the same taxing authority

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7
Q

What 2 conditions must be met for infrastructure assets (eg roads) not to be depriciated?

A
  1. Assets tracked by mgmt 2. Documentation is made regarding the assets.
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8
Q

What 2 funds require the use of budgetary accounts?

A

General Fund and Major Special Revenue Funds.

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9
Q

What amounts are included in the capitalized cost of an asset?

A

All costs assoc with getting the asset into use: invoice price, sales tax, shipping, installation, testing

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10
Q

What are Cash-Basis, Modified Cash-Basis, Tax-Basis, and Regulatory-Basis are examples of?

A

OCBOA Other Comprehensive Basis of Accounting

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11
Q

What are examples of red flags that indicate a going concern issue?

A

Recurring losses, Neg cash flows, Default loans, Credit denial, Legal issues, Loss major supplier/customer.

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12
Q

What are script dividends?

A

Promises to pay dividends in the future

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13
Q

What are the 3 levels in the FV hierarchy?

A

Level 1, 2, & 3.

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14
Q

What basis of acctg is used by the governmental funds?

A

Modified Accrual

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15
Q

What basis of acctg is used by the proprietary funds, fiduciary funds & government-wide F/S?

A

Accrual Basis.

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16
Q

What do liquidating dividends represent?

A

A return of capital to stockholders.

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17
Q

What does operational accountability measure?

A

How effective & efficient the organization has been

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18
Q

What does the acronym CAFR stand for?

A

Comprehensive Annual Financial Report

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19
Q

What does the acronym FRACA stand for?

A

Foreign Currency Translation, Revaluation Surplus (IFRS),

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20
Q

What funds are not included in the government-wide F/s?

A

Fiduciary Funds

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21
Q

What happens to the equity accts of the entity acquired when acquirer consolidates their F/S?

A

They are eliminated & replaced with non-controlling interest-which is measured at FMV.

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22
Q

What is a complex capital structure?

A

A capital structure having securities that can potentially be converted into CS.

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23
Q

What is a fair value hedge?

A

One that uses a derivative instrument to hedge exposure to changes in FV of an asset or liab

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24
Q

What is an annuity?

A

A stream of equal pmts over a period of time

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25
Q

What is emphasized by interim F/S?

A

Timeliness. (Not reliability, interim F/S are not audited)

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26
Q

What is market capitalization threshold for an issuer to be considered a Large Accelerated Filer?

A

$700,000,000

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27
Q

What is push-down accounting & who requires it?

A

Acquired company restates to FV, as aquirer’s books reflect. Recognize GW. Lowers future Net Income. Optional for all.

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28
Q

What is segment reporting?

A

Disclosure of the entity’s info regarding various components of their operations.

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29
Q

What is the accounting treatment for a lease bonus?

A

Unearned revenue by lessor. Amortized over the life of the lease.

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30
Q

What is the accumulated benefit obligation?

A

The actuarial PV of compensation & yrs of service that have already been earned & performed.

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31
Q

What is the appropriate acctg treatment for unrealized gains/losses on Avail-for-Sale Securities?

A

OCT

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32
Q

What is the appropriate acctg treatment for unrealized gains/losses on Avail-for-Sale Securities?

A

OCI

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33
Q

What is the basic formula for the B/S of a governmental entity?

A

Assets + Deferred Outflows = Liabs + Deferred Inflows + Fund Balance

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34
Q

What is the basic JE for recording a budget?

A

DR Est Renues Control, CR Appropriations, DR/CR Budgetary Fund Balance

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35
Q

What is the basic layout of the multiple step income statement?

A

Income from Contin Op, Disco’d Op, Extraordinary Items, Accumulated OCI

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36
Q

What is the calculation for comprehensive income?

A

Net Income plus Other Comprehensive Income

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37
Q

What is the calculation for net worth on personal financial statements?

A

Assets - Liabs - Estimated Tax = Net Worth

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38
Q

What is the corridor approach used to determine?

A

the Miminum Amount of Amort of Unrecognized Gains/Losses from prior periods

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39
Q

What is the difference between basic and dilutive EPS?

A

Dilutive EPS takes into account items that may potentially reduce EPS.

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40
Q

What is the difference between the cost method and the par value method?

A

When the gain/loss is recorded. Cost: when treasury stock is resold. Par: when stock is purchased.

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41
Q

What is the formula for basic earning per share?

A

NI-CY PS dividends // Weighted-Avg # of CS shares outstanding

42
Q

How do you calculate Current Year Peferred Stock Dividends?

A

Par value x Interest Rate

43
Q

What are the 2 methods to calculate Weighted Average # Common Shares Outstanding?

A

Cindy’s method and the Textbook method

44
Q

How do you calculate Weighted Average # Common Shares Outstanding?

A

Cindy’s method: # shares on 1/1 *12/12 + Purch as of date thru end of year. STOCK DIV take YTD weighted avg * Div %. -Treas Stock Date to EndOfYear

45
Q

How do you calculate Weighted Average # Common Shares Outstanding?

A

Textbook method: # shares beg year time x/12 for # months until next event *Stock Div% until Stock Div Date.

46
Q

What is the formula for diluted earning per share?

A

NI-PS dividends // Weighted-Avg # of CS shares outstanding

47
Q

What is the formula for the physical usage depreciation?

A

Depreciable Base x (current period usage // total estimated usage)=current period depr exp

48
Q

What is the IFRS equivalent of US GAAP Stmts of Financial Acctg Concepts?

A

Framework for the Preparation & Presentation of Financial Statements (provide underlying concepts)

49
Q

What is the IFRS equivalent of US GAAP term “Net Income”?

A

Profit

50
Q

What is the JE to close the budget?

A

DR Appropriation Control, CR Est Rev Control, DR/CR Budgetary Fund Balance

51
Q

What is the JE to record the encumbrance when a new vehicle is ordered?

A

DR Encumbrance, CR Reserve for Encumbrances (Then reverse for exact amt)

52
Q

What is the market capitalization range for an issuer to be considered an accelerated filer?

A

$75,000,000 - $700,000,000

53
Q

What is the percentage threshold for determing if sales leaseback is major or minor?

A

If the (PV of future min lease paymts) ? (10% of selling price), it’s minor.

54
Q

What is the primary focus of the proprietary funds?

A

Economic Resource Focus, Income Determination & Statement of Cash Flows.

55
Q

What is the Projected Benefit Obligation?

A

The Actuarial PV of future benefit payments.

56
Q

What is the threshold for recognition according to SFAC 8?

A

Materiality if the threshold for recognition

57
Q

What is treatment for realized & unrealized Trading Securities gains/losses?

A

Recognized on the Income Stmt

58
Q

What makes financial info relevant?

A

Predictive &/or Confirmatory Value, Materiality

59
Q

What type of component unit presentation calls for the CU to be shown in a column to the right on GW FS?

A

This is called Discrete Presentation.

60
Q

What types of profis is earned by a lessor on a sales-ty[e lease?

A

Gross Profit and Interest Income

61
Q

When a bond is issued with a non-detachable stock warrant, is the APIC-Stock Warrants acct utilitzed?

A

No. They don’t have a determinable market value. The entire amt is recorded as Bond Payable.

62
Q

When an investor obtains

A

Trading Securities or Available-for-Sale Securities. (Stock cannot be held-to-maturity, only bonds)

63
Q

When are expenditures for principle & int recorded, under modified accrual?

A

When legally due

64
Q

When debt terms are restructured, how does the debtor account for the restructuring?

A

By reducing interest expenses through the remaining life of the loan

65
Q

When does partnership dissolution occur?

A

When there is a change in partners. New, retired, death. Business continues.

66
Q

When ending inventory decreases under LIFO, what is the result on net income?

A

End Inv is lower, COGS is higher, Net Income in lower.

67
Q

When is a public company required to present both basic and diluted ESP?

A

When it has a complex capital structure

68
Q

When is revenue generally recognized?

A
  1. When realized or realizable & 2. When earned.
69
Q

When is revenue recognized under the modified accrual basis of accounting?

A

When measureable & available (Property Tax-Up to 60 days, other taxes up to 180 days from B/S date)

70
Q

When must a Large Accelerated Filer file 10-K and 10-Q?

A

10-K,60 days after yr end. 10-Q, 40 days after qtr end

71
Q

When reclassing AFS to Trading Securities, what is the acctg treatment for the unrealized gain/loss?

A

Unrealized gain/loss is recognized in the I/S immediately upon reclass.

72
Q

When should a loss contingency be accrued under US GAAP?

A

When the loss can be reasonably estimated & the loss is probable.

73
Q

When the expected return on plan assets differs from the actual return on plan assets, this is called a(n)___.

A

Acturarial Gain/Loss.

74
Q

When using percentage of completion, when is revenue and profit recognized?

A

Throughout the contract term, if dependable estimates can be made

75
Q

Where do the Governmental Funds present Fixed Assets and Long Term Debt?

A

In the Government-Wide F/S only.

76
Q

Where does IFRS require significant non-cash investin g & financing activities to be disclosed?

A

In the notes to the F.S.

77
Q

Where is the effective portion of a cash flow hedge recorded?

A

OCI

78
Q

Where is the foreign currency translation adj recorded when using the current rate translation method?

A

On the B/S - Stockholders’ Equity Section - OCI

79
Q

Which revenue recognition method for construction contracts is allowed under GAAP, but not IFRS?

A

Completed Contract Method

80
Q

Who does segment reporting apply to?

A

Publicly traded entities

81
Q

Who wrote the Statements of Financial Accounting Concepts?

A

FASB

82
Q

What are Service Costs?

A

Service Costs are the actuarial PV of benefits for employee services during the current period

83
Q

Where does US GAAP require info related to significant non-cash investing for financing activities to be disclosed?

A

On the face of the statements or in the notes.

84
Q

How are tuition & fees for a university presented on the statement of activities?

A

Tuition and fees are presented net of scholarships and fellowships.

85
Q

How are derivative instruments measured?

A

Using fair value

86
Q

When does a not-for-profit entity record a temporarily restricted expense?

A

Never. All expenses are unrestricted and reduce the unrestricted net assets.

87
Q

Name the 3 expense categories that must be presented in a NFP entity’s Stmt of Funtional Expenses.

A

Programs, Management & General & Fund Raising

88
Q

What is regulation SX?

A

These are the instructions for form 10-K. Reg SX provides the form & content of the F/S for SC reg.

89
Q

How is Goddwill recorded in a business combination?

A

If FV of consideration trans. + FV prev held equity int + FV of non-conrol int. > FV net id assets. Else Barg Purchase Gain.

90
Q

What is an extraordinary item per GAAP? Per IFRS?

A

GAAP: Infrequent & unusual. IFRS does not allow extraordinary items

91
Q

If a sales lease-back transaction is considered to be minor, how is the gain or loss recorded?

A

When the transaction is minor, the entire gain can be recognized

92
Q

What is the treatment of legal fees to acquire an entity?

A

Legal fees are expensed

93
Q

What is the appropriate GAAP treatment of start-up costs?

A

Start-up costs are to be expensed under GAAP (For taxes, cap costs over 15 year)

94
Q

How are the primary beneficiary’s FS effected by the Variable Interest Entity?

A

The primary beneficiary of a VIE is required to present consolidated FS that include the VIE

95
Q

What additional info is shown on the IS and Stmt of Cash Flows for a developmental stage entity?

A

Developmental Stage Entities must show CUMULATIVE AMTS on IS & Stmt of Cash Flows

96
Q

Define contingency under IFRS.

A

An event that is NOT recognized bc it is not probable that an outflow will occur

97
Q

Name the 2 types of accountability related to the Governmental Reporting Model.

A

Operational & Fiscal

98
Q

Which fund is shown in a separate column on the Govt-wide FS?

A

Enterprise Funds

99
Q

Name the 5 elements of FS according to IASB.

A

ICE ALE Assets, Liabilities, Equity, Income, Expenses, (Capital Adjustments)

100
Q

Is the direct method of cash flows permitted when using IFRS?

A

Yes. IFRS permits the use of the direct or indirect method

FAR (22 decks)

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