Financial Statements Flashcards
Info
Started on 25 August 2014 @12.00 AM
Total questions 109
To do at a time 40, 40, 29
Practice session 90
Which of the following is an accepted valuation technique for fair value estimates?
the cost approach, the market approach, and the income approach.
How should an unusual event not meeting the current criteria for an extraordinary item be disclosed in the financial statements?
items unusual in nature or infrequent in occurrence are to be disclosed separately in the operating section of the income statement and also may be supplemented by a footnote.
Note that such items should not be shown net of income taxes.
Comprehensive Income, applies to which of the following entities?
to enterprises that develop a full set of financial statements which report cash flows, results of operations, and financial position.
Is Accumulated depreciation of equipment is non monetary?
Yes,
nonmonetary items include assets and liabilities whose amounts may change over time in terms of a monetary unit (e.g., the U.S. dollar). Examples of nonmonetary assets and liabilities included inventory, property, plant, equipment, and obligations under warranties. Accumulated depreciation is a nonmonetary item because it relates to equipment.
The fair value option - hint.
The fair value option may be elected on an instrument-by-instrument basis for available-for-sale securities.
Does current vulnerability due to a possible recession needs disclosure.
No
Payment of benefit.
A liability for the cost should be recorded when the liability has been incurred.
the market that has the greatest volume and level of activity is the
The principal market.
The market that maximizes the price received for the asset.
Most advantageous market.
The most relevant market.
ASC Topic 820 does not use the terminology relevant market.
The independent market.
ASC Topic 820 does not use the term independent market.
formula for gross profit
gross profit is calculated as net sales less cost of goods sold
Interest expense is
Financial expense or other expense.
10 Q to be filed by large accelerator filer
large accelerated filers must file Form 10-Q 40 days after fiscal quarter end.
SEC’s regulation S-X describes
The form and content of financial statements to be filed with the SEC.
Which of the following is an appropriate market approach for determining fair value measurements?
Using relevant information from recent transactions.
The fair value option election applies to all of the following items except for
Pensions.
The fair value for an asset or liability is measured as
The price that would be received when selling an asset or paid when transferring a liability in an orderly transaction between market participants.
According to ASC Topic 820, which level has the lowest priority for valuation purposes?
Level 3
ASC Topic 825 for the fair value option election applies to all of the following items except for
the fair value option does not apply to leases.
the cumulative effect of changing to a new accounting principle should be included in net income of
A change in accounting principle is accounted for through retrospective application to all prior periods, unless it is impracticable to do so.
ASC Topic 255 requires that the current cost for inventories be measured as the
current cost for inventories be measured at the lower of current cost or recoverable amount at the measurement date.
Which of the following statements is true regarding the fair value option for valuing financial assets and liabilities?
The fair value option must be applied to all interests in the same entity.
Form 10-Q.
Need to memorize
Form 8-K.
Need to memorize
Form 10-K.
Need to memorize
Form S-1.
Need to memorize
Which of the following facts concerning inventories should be disclosed in the summary of significant accounting policies?
Composition is not but pricing should
inventory pricing would be considered a significant accounting policy.
In accordance with ASC Topic 255, the Consumer Price Index for All Urban Consumers is used to compute information on a
“constant dollar” basis. The index is used to restate financial statement elements to dollars which have the same purchasing power.
Which of the following is an appropriate income approach for developing fair value measurements?
Using present value techniques to discount cash flows.
Users of prospective financial information can include
Recall the users of prospective financial statements.
General users with whom the responsible party is not negotiating directly.
The responsible party.
Third parties with whom the responsible party is negotiating directly.
According to ASC Topic 820, the fair value of an asset should be based upon
The price that would be received to sell the asset.
Smith Company reports under IFRS. A note payable is classified as current in Smith’s statement of financial position. Under what conditions can the note payable be classified as noncurrent instead of current?
in order to reclassify a liability from current to noncurrent, an agreement to refinance the liability as long-term must be executed before the statement of financial position date.
Which of the following should be disclosed in a summary of significant accounting policies?
Criteria for determining which investments are treated as cash equivalents.
Which of the following accounting bases may be used to prepare financial statements in conformity with a comprehensive basis of accounting other than generally accepted accounting principles?
. Basis of accounting used by an entity to file its income tax return.
II. Cash receipts and disbursements basis of accounting.
The cumulative effect of an accounting change should generally be given retrospective application for a
Change in accounting principle Change in accounting entity
Yes Yes
What is a reclassification adjustment as used when reporting comprehensive income?
A reclassification adjustment is an adjustment made to avoid double counting in comprehensive income items that are displayed as part of net income for a period that also had been displayed as part of other comprehensive income in that period or earlier periods.
Which of the following should be disclosed in the summary of significant accounting policies?
Basis of consolidation.
Which of the following facts concerning plant assets should be disclosed in the summary of significant accounting policies?
Composition Depreciation expense amount
Yes Yes
Yes No
Giaconda, Inc. acquires an asset for which it will measure the fair value by discounting future cash flows of the asset. Which of the following terms best describes this fair value measurement approach?
Income.
There are three fair value valuation techniques.
ASC Topic 255 requires that the current cost for inventories be measured as the
Lower of current cost or recoverable amount.
What is principal market?
The market that has the greatest volume and level of activity.
