General Purpose Financial Reporting: For-Profit Business Entities

Question 1

If losses are expected in the next year from a discontinued operation to be disposed of, will those expected losses be recorded in the CY income statement?

Answer 1

Expected operating losses from discontinued operations are not included in financial statements until they occur.

Note: an expected disposal loss may be indirectly recognized through impairment testing ( and written down as a component to fair value)

Question 2

Investing activities include
(4)

Answer 2

Question 3

What are the rules required to record a chartiable contribution expense.

Answer 3

Question 4

If a parent owns less than 100% of the subsidiary, noncontroling interst is reported on __________ under ___________

Answer 4

Balance sheet under stockholders equity.

Question 5

List all the operating Activities (DAGE)

Answer 5

Question 6

What are Monetary vs Nonmonetary Items

Answer 6

Question 7

Should cash flows per share be reported on a statement of cash flows?

Answer 7

Unlike the income statement, which requires earnings per share to be reported, the SCF may not disclose the Cash flows per share, bc that could be misinterpreted by users as a measure of performance and amount they think could be paid out.

Question 8

Prior period Adjustments cannot be made to Net income. They must be recorded to _______

Answer 8

Retained Earnings

Question 9

List the components in the Multistep income statement

Answer 9

Question 10

Calculate income from discontinued operations net of tax __________ from income from continuing operations, then add to net income.

Answer 10

Calculate income from discontinued operations net of tax SEPERATELY

Question 11

Mortgage repayments and bonds payable issued are ________________ activities

Answer 11

Financing activities.

Question 12

When calculating Accumulated AOCI, what should you do with pension prior service costs

Question 13

Would conversion of debt to equity be disclosed as supplemental info in the statement of cash flows?

Answer 13

Yes

Question 14

What are the Single Step Components vs Multistep income statement

Answer 14

Question 15

Is Accumulated depreciation recognized on the SCF indirect or direct method?

Answer 15

Never. Only Depreciation

Question 16

Where would borrowings under a line of credit go on indirect SCF

Answer 16

Financing activities

Question 17

How should amortization of bond discount on long-term debt be reported in a SCF indirect method?

Answer 17

Operating section - add to net income

Question 18

Proceeds from bond payable sold at a premium go on what section of SCF

Answer 18

Bonds payable sold (ie issued) by a company, cash proceeds go on financing section regardless sold at disc/premium

Question 19

OCI (Other comprehensive income) are transactions that have _______ _______ __________

Answer 19

have not been realized

Question 20

Fix this card

Examples of significant noncash investing and financing activities

Significant noncash activities are reported separately, either as an 1) operating activity reconciliation (i.e. property dividend received)
2) on Schedule of noncash investing and financing activities (i.e. property dividends paid)

Answer 20

Question 21

When a company owns more than 50% of voting stock of another company, the intercompany transactions must be __________________

Answer 21

Eliminated. In consolidation, intercompany transactions are eliminated to avoid double counting of assets.

Question 22

If equipment is sold, the total sales price is recorded in ________ activities and the gain/loss is recorded in ________ separately. No netting together

Answer 22

If equipment is sold, the total sales price is recorded in investing activities and the gain/loss is recorded in operating separately. No netting together

Question 23

Summary of Significant accounting policies examples for disclosures(BRIDUIFIF)

Answer 23

Question 24

OCI ? (DENT)

Answer 24

Question 25

Prepaid rent changes are included in ______ activities. Also whats the treatment for AL4DA in those activities?

Answer 25

Prepaid rent is a current asset so its treated in operating activities. Add back to NI if prepaid rent decreased, subtract from NI if increased.

AL4DA (or allowance for credit loss) is a contra asset. Add back any increases like CL.

Question 26

Major repairs are what activity?

Answer 26

Investing

Question 27

Whats the difference between foreign currency translation and transaction?

Answer 27

Translation is concerned with financial statements expressed in foreign currency translated into domestic, not the treatment of individual transactions.

Question 28

Equation for Parent using equity method, adjusting the CV of its investment in Sub

Answer 28

Begining CV = Cost
+ % of NI
- % excess depreciation
- % of dividends
= End CV inv in sub

Question 29

When a parent owns a subsidiary: The consolidated dividends declared represent those attributable to the parent company. All subsidiary dividends are eliminated, regardless of the parents ownership percentage

Answer 29

When a parent owns a subsidiary: The consolidated dividends declared represent those attributable to the parent company. All subsidiary dividends are eliminated, regardless of the parents ownership percentage

Question 30

Goodwill is the difference between the ________ and the _______ of net assets

Answer 30

purchase price , fair value

Question 31

What are financial instruments

Answer 31

Financial instruments are any monetary contract, (ie cash, stock, security) and whether recognized or unrecognized, must have their fair values disclosed, if practicable to estimate, and if they are material.

Question 32

purchasing common stock is an ____ activity

Answer 32

investing activity

Question 33

List the 6 noncash operating activities and their treatment
(DAGE)

Answer 33

Question 34

What are the non operating items in a multistep income statement. IDEAL GU

Answer 34

Question 35

SIM Good will

Answer 35

Question 36

What is the general rule for the consolidation method, and how does it apply to a 70% ownership scenario

Answer 36