Final review topics

Question 1

Where does the unrealized loss from AFS go?

Answer 1

The unrealized loss goes to OCI, but the realized gains and losses go on the income statement.

Question 2

When you are exchanging an asset, how do you determine the gain or loss?

Answer 2

First of all you are just going to look at the carrying amount of the asset, and the fair value of the asset, that you have. Don’t worry about the new asset, and see if you have a gain or a loss.

Question 3

When dealing with EPS what is going to be treated as if it happened at the beginning of the year?

Answer 3

• Declaration and distribution of a stock dividend

Question 4

What value are investments reported at on the personal financial statements?

Answer 4

They are reported at their FMV or their cash surrender value.

Question 5

How do you get the book value? When you are going to calculate the goodwill under the consolidation method?

Answer 5

You are going to take the assets, and subtract out the liabilities to get a net amount which you will use the book value to which you would compare the whole consideration that was given.

Question 6

When will donated services for a not for profit be recognized as contributed revenues?

Answer 6

If they meet the SOME test.
S specialized skills
O - otherwise needed donation
m - Measured easily
e - estimable.
- They need the service or else would have to get a specialized person to do it for them anyways,
if anyone can do it then it would not be contributed revenues.

Question 7

When it comes to relevance and they are looking for something that is entity specific which is that?

Answer 7

This refers to passing confirms money.

Only materiality would be considered entity specific.

Question 8

What is the formula for percentage of completion method?

Answer 8

Total contract selling price
- Total estimated costs (costs to date + estimated costs)
= Gross profit
x percentage completed (costs to date/total estimated costs)
= Gross profit earned to date
- income previously recognized
= income recognized in current year.

Question 9

When should warrant costs be recognized?

Answer 9

When the related machine is sold. Matching expense with the related revenue.

Question 10

What are some OCBOA financial statements?

Answer 10

• When they are complying with a reg agency
• Tax basis
• cash basis and modified cash basis.
• other basis with substantial support.

Question 11

How do you amortize a gain under SIR AGE?

Answer 11

First you take 10% of the Beg PBO and the Beg fair value of the plan assets, and you choose the amount that is greater.
- You first take the unrecognized gain and subtract the amount that you just calculated above, and the excess is divided by the remaining service life. Gain is subtracted a loss is added.

Question 12

What is a common thing that is done when you are using the modified cash basis financial statements.

Answer 12

You will capitalize inventory.

Question 13

What is something that will happen when you are reporting the interim financial statements? What is emphasized?

Answer 13

• You are going to be emphasizing timelines over reliability.
• You will also be preparing the interim financial statements with less due diligence, than annual since you want it done FASTER.

Question 14

What effect would a 5% dividend have?

Answer 14

It would not affect assets, total S.E, but it would affect retained earnings.
- If its less than 20-25%, then the stock dividends transfers the FMV from the retained earnings to the capital stock and paid in capital.

Question 15

What effect does the purchase of stock holders equity have?

Answer 15

It would decrease the stock holders equity and the number of shares outstanding.
- As a result the amount of earnings would increase.

Question 16

How do you get the amount of collections under the installment sales method?

Answer 16

You have to first take the realized profit and divide it by the amount of gross profit percentage.
This will tell you the collections that you have.

Question 17

Under IFRS you have a non current DTA and a current DTL which is less than the DTA what do you do with both of these amounts?

Answer 17

They will be netted, and will be shown as a non current DTA.
Under U.S GAAP they would be shown separate.

Question 18

Fund accounts focus on operational or fiscal accountability?

Answer 18

The funds focus on fiscal accountability, which is seeing if the funds are spent properly.
- The government wide financial statements are focus on operational accountability.

Question 19

What type of approach do the government wide financial statements take?

Answer 19

They take the integrated approach since they would be combining with the fund financial statements as well, and then a reconciliation that combines both of these methods.

Question 20

When are revenues recognized when it comes to state and local governmental bodies?

Answer 20

• If the answer says something about accruals that is not when they are recognized they are recognized when they are measurable and available.

Question 21

What is the total ARO expense?

Answer 21

This is going to be the depreciation which is based on straight line, and the accretion expense, which is the accretion rate times the face of the payable.

Question 22

What are property dividends recorded at?

Answer 22

They are recorded at fair value. They would not affect APIC, if you got a property dividend that was greater than book value then you would record a increase in net income.

Question 23

What type of information is issuing of stock, bonds for assets, converting bonds for assets, reported as on the statement of cash flows?

Answer 23

They would be supplemental information that is reported on the notes. For they are a non cash type of activity.

Question 24

How are imposed non exchange receivables recorded?

Answer 24

They are recorded as deferred inflow of resources.
When there is an enforceable claim.
EX. fines for violations,