FINANCIAL STATEMENT ACCOUNTS:RECOGNITION,MEASUREEMNT,VALUATION Flashcards
Pie Co. uses the installment sales method to recognize revenue. Customers pay the installment notes in 24 equal monthly amounts, which include 12% interest. What is an installment note’s receivable balance six months after the sale?
The present value of the remaining monthly payments discounted at 12%
Long-term debt often has covenants in the debt contract. Debt covenants are standards for the financial strength and performance of the borrower. These covenants are intended to protect the interest of the:
lending institution.
An increase in the cash surrender value of a life insurance policy owned by a company would be recorded by:
decreasing annual insurance expense.
FASB ASC 320-10-25-1 provides for the use of which of the following accounting methods in valuing debt and equity securities?
Fair value for certain debt and equity securities and amortized cost for certain debt securities `
What is the present value of all future retirement payments attributed by the pension benefit formula to employee services rendered prior to that date and based on current and past compensation levels?
Accumulated benefit obligation
Jones Wholesalers stock a changing variety of products. Which inventory costing method will be most likely to give Jones the lowest ending inventory when its product lines are subject to specific price increases?
Dollar-value LIFO
Jel Co., a consignee, paid the freight costs for goods shipped from Dale Co., a consignor. These freight costs are to be deducted from Jel’s payment to Dale when the consignment goods are sold. Until Jel sells the goods, the freight costs should be included in Jel’s:
accounts receivable.
The discount resulting from the determination of a note payable’s present value should be reported on the balance sheet as:
a direct reduction from the face amount of the note
should be disclosed in a company’s financial statements related to deferred taxes?
I. The types and amounts of existing temporary differences
II The nature and amount of each type of operating loss and tax credit carryforward
an example of a special-purpose fund?
Payroll Cash Account
Petty Cash Fund
Sinking Fund
At the time of death of an insured officer or employee:
a gain would be recognized equal to the excess of the face amount of the policy over the cash surrender value at the time.
Enterprises often carry life insurance policies on the lives of key officers and employees. If the enterprise is the beneficiary, the cash surrender value of the policy is an asset of the enterprise. The amount to be charged to expense is:
the amount of such premiums paid less the increase in cash surrender value during the period.
An employer sets up a rabbi trust for an employee’s future compensation. The trust funds can be used for:
I. payment of the employer’s creditors in a bankruptcy.
II. payment of the employer’s future compensation.
For a troubled debt restructuring involving only a modification of terms, which of the following items specified by the new terms would be compared to the carrying amount of the debt to determine if the debtor should report a gain on restructuring
The total future cash payments
In Year 1, a company reported in other comprehensive income an unrealized holding loss on an investment in available-for-sale securities. During Year 2, these securities were sold at a loss equal to the unrealized loss previously recognized. The reclassification adjustment should include which of the following?
The unrealized loss should be credited to the other comprehensive income account.
