Intangible

Question 0

Intangible asset - internally developed / externally developed difference?

Answer 0

Internally developed
発生した時点でexpenses as incurred
例外として、direct cost はcapitalized できる
例えば研究開発費research and development costsは一切資産化出来ないのに対して、その成果として行う特許出願にかかる申請費用や法律費用は資産化できる

Externally developed
Fv 基づいて当初認識し測定される

Question 1

Intangible asset definition

Answer 1

物理的な実態を持たない金融資産以外の資産asset ( not including financial asset ) that lack physical substance)

Question 3

IFRSのintangible asset とは

Answer 3

An intangible asset is an identifiable non monetary asset without physical substance
ＩＦＲＳではのれんはidentifiablityを有さないものとされ、無形資産と区別される。

Question 4

ＩＡＳ３８では無形資産は以下の条件を満たす場合に認識　２つ

1) 　資産に起因する期待される将来の経済的＝＝が企業に流入する可能性が高い
2) 資産の＝＝＝を信頼性をもって測定できる。

Answer 4

1) 　資産に起因する期待される将来の経済的便益が企業に流入する可能性が高い

2) 資産の取得原価を信頼性をもって測定できる。

Question 5

ＩＡＳ38無形資産をcost 取得原価で測定することを規定。取得原価の構成要素を具体的に列挙
1) Its purchase price, including import ——- and non-refundable purchase taxes, after deducting trade discounts and ——-.
2) Any directly attributable cost of preparing the asset for its ——— use.
Example-directly attributable cost 直接付随費用の例
　　　　　: Costs of employee ——— arising directly from bringing the asset to its working condition
; ——— fees arising directly from bringing the asset to its working condition
: costs of ———- whether the asset is functioning properly

Answer 5

1) Its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
2) Any directly attributable cost of preparing the asset for its intended use.
Example-directly attributable cost 直接付随費用の例
　　　　　: Costs of employee benefits arising directly from bringing the asset to its working condition
; Professional fees arising directly from bringing the asset to its working condition
: costs of testing whether the asset is functioning properly

Question 6

無形資産の原価の一部ではない支出3つ

Answer 6

1) 　costs of introducing a new product or service )advertising and promotional activities
2) Costs of conducting business in a new location or with a new class of customer (cost of staff training)
3) Administration and other general overhead costs

Question 7

Computer software
Research and development costs
を費用計上するのは？

Answer 7

1) completion of detailed program design

2) costs incurred for coding and testing to establish technological feasibility

Question 8

Computer software development costs

資産計上し、ーーーーー確率後—-を開始する

Answer 8

Computer software development costs

資産計上しmarket feasibility 確率後償却を開始する

Question 9

Duplication of computer software and training materials from product masters

Packaging product

Answer 9

Inventory として計上後販売時にcgsに計上

Question 10

ソフトウェアコストの年間償却額の計算方法 2つ

Answer 10

定額法による償却

1) ソフトウェアコスト➗耐用年数
2) 当期の収益➗見積総収益 x ソフトウェアコスト

Question 11

ソフトウェアcarrying amount and NRV の比較どうする？

Answer 11

毎期末ソフトウェアのcarrying amount とNRV selling price - selling cost と比較し低い方を採用
NRVを上回った金額だけソフトウェアの評価下げを行う

Question 12

6 long lived asset
設例
2001年12月31日にa社はコンピュータソフトウェア開発として$10000を資産計上した。見積総収益1000000 2002年1年間の収益が$400、000あり2002年12月31日時点でのNRVが$7000とする

Answer 12

1) $10,000 x 1/5= 2,000
2) $10,000 x 400,000/1000000= 4000
2002年の焼却額は大きい方の4000となり2002年末の未焼却残高は6000($10000-4000)である。同時点のNRVは7000なのでbsに計上される金額は6000となる。

Question 13

rd コストに該当する代表例をあげよ

Answer 13

1)

Question 14

A fixed asset with a five-year estimated useful life and no residual value is sold at the end of the second year of its useful life.
How would using the sum-of-the-years’-digits method of depreciation, instead of the double declining balance method of depreciation, affect a gain or loss on the sale of the fixed asset?

Answers are :

Gain
Loss

Answer 14

Incorrect (Tap screen to flip)
The first part of the answer is correct, but the second part is incorrect.
Under SYD, total depreciation through the first two years is [(5 + 4)/(1 + 2 + 3 + 4 + 5)]Cost = (9/15)Cost. Therefore, book value remaining is (6/15)Cost = .4Cost.
Under DDB, total depreciation through the first two years is computed as:

Depreciation, year one = (2/5)Cost = .4Cost
Depreciation, year two = (2/5)(Cost-Depreciation, year one)
= (2/5)[Cost-(2/5)Cost]
=.4[Cost-.4(Cost)]
= .4(.6Cost) = .24 Cost

Total depreciation for the two years is therefore .4(Cost) + .24(Cost) = .64(Cost). Book value remaining is (1-.64)Cost = .36 Cost.
The asset has a larger book value under SYD after two years. For a given amount of proceeds on disposal, the larger book value under SYD causes any gain on disposal to be smaller than under DDB and any loss greater than under DDB. In other words, the gain decreases and the loss increases, relative to DDB.
The correct answer is

Decrease,Increase
Under SYD, total depreciation through the first two years is [(5 + 4)/(1 + 2 + 3 + 4 + 5)]Cost = (9/15)Cost.
Therefore, book value remaining is (6/15)Cost = .4Cost.

Depreciation, year one = (2/5)Cost = .4Cost
Depreciation, year two = (2/5)(Cost-Depreciation, year one)
= (2/5)[Cost-(2/5)Cost]
=.4[Cost-.4(Cost)]
= .4(.6Cost) = .24 Cost

Total depreciation for the two years is therefore .4(Cost) + .24(Cost) = .64(Cost). Book value remaining is (1-.64)Cost = .36 Cost.
The asset has a larger book value under SYD after two years. For a given amount of proceeds on disposal, the larger book value under SYD causes any gain on disposal to be smaller than under DDB and any loss greater than under DDB. In other words, the gain decreases and the loss increases, relative to DDB.

Question 15

Which of the following statements best describes the operating procedure for issuing a new Financial Accounting Standards Board (FASB) statement?
A. The emerging issues task force must approve a discussion memorandum before it is disseminated to the public.
B. The exposure draft is modified per public opinion before issuing the discussion memorandum.
C. A new statement is issued only after a majority vote by the members of the FASB.
D. A new FASB statement can be rescinded by a majority vote of the AICPA membership.

Answer 15

A. Incorrect…

The EITF is not directly involved with the promulgation of accounting standards. Rather, The EITF was established by the FASB to develop consensus positions about how to account for new financial transactions and events.
When the EITF cannot reach consensus on an issue, the FASB may add the issue to its agenda.

B
Incorrect…

The due diligence aspect of standard setting requires the FASB to solicit and consider views from all interested parties.
However, a discussion memorandum, if issued, precedes an exposure draft, which is the proposed accounting standard.

C
Correct!

At least four of the seven members of the FASB must
vote in favor of a proposed Statement of Financial Accounting Standards.

D Incorrect…

The AICPA is an entity separate from the FASB and is not involved with the process of adopting new accounting standards.D

Question 16

Tag Question

What is the primary protection for investors against fraudulent financial reporting by corporations?

A. 	Criminal statutes.
B. 	The requirement that financial statements be audited.
C. 	The fact that all firms must report the same way.
D. 	The integrity of management.

Answer 16

B
Correct!

The audit of the financial statements by independent third parties is the primary protection. The auditors do not prepare the information, nor do they have employment ties with either the reporting firm or the intended audience of the financial statements.
However, even the audit of financial statements is not a perfect protection as indicated by the frequency of fraud and audit failure.

D

Incorrect…

In a better world, this would be the correct answer but the incidence of fraudulent financial reporting indicates otherwise.
The audit of the financial statements by independent third parties is the primary protection, because independent third-party CPAs provide a more objective opinion of the accuracy of the statements.
The auditors do not prepare the information, nor do they have employment ties with either the reporting firm or the intended audience of the financial statements.

Question 17

What group currently writes the Generally Accepted Accounting Principles?

A. 	Internal Revenue Service.
B. 	Securities and Exchange Commission.
C. 	Financial Accounting Foundation.
D. 	Financial Accounting Standards Board.

Answer 17

DCorrect!

The FASB is currently the rule-making body for GAAP. The Board has codified well over one hundred Statements of Financial Accounting Standards, and Interpretations of those standards. The FASB is a private-sector body, the third such body serving as the entity which creates GAAP for U.S. businesses. The FASB has no authority to enforce GAAP, however.

B Incorrect…

The SEC has the ultimate authority for setting GAAP, but for the most part, it has allowed a private-sector body to develop GAAP. The FASB is currently the rule-making body for GAAP.

Question 18

Tag Question

Choose the correct statement about GAAP.

A. 	GAAP are laws.
B. 	Only publicly traded companies must comply with GAAP.
C. 	It is a violation of SEC regulations for publicly traded companies to depart from GAAP.
D. 	Firms may not restate financial statements previously issued.

Answer 18

B
Incorrect…

Essentially, all companies that rely on external sources of capital require financial statements and, therefore, must comply with GAAP.
For example, a privately-held firm may require a loan. In order to obtain the loan, the firm must present audited financial statements.

C
Correct!

The SEC requires that all registrants provide financial statements that comply with GAAP and will sanction firms and individuals involved in financial reporting that does not comply with GAAP.

Question 19

A company records items on the cash basis throughout the year and converts to an accrual basis for year-end reporting. Its cash-basis net income for the year is $70,000. The company has gathered the following comparative Balance Sheet information:
Beginning of year	End of year
Accounts payable	$ 3,000	$ 1,000
Unearned revenue	300	500
Wages payable	300	400
Prepaid rent	1,200	1,500
Accounts receivable	1,400	600
What amount should the company report as its accrual-based net income for the current year?

A. 	$68,800
B. 	$70,200
C. 	$71,200
D. 	$73,200

Answer 19

A Incorrect…

This response is incorrect because all of the signs for the accrual adjustments are inverted. If you got this response - you are on the right track - but you have your signs backward. For example, the adjustment to cash-basis net income for the net change in accounts payable is a positive $2,000. If you used the $2,000 as a negative adjustment to cash-basis net income you are in error. The beginning accounts payable of $3,000 is added to cash-basis net income because the AP paid in the current year is for prior year expenses. The ending AP balance of $1,000 is subtracted from cash-basis net income, because the expenses relate to the current year, even though the cash flow will occur next year. This will result in a net adjustment of $2,000 added to cash-basis net income.

B
Incorrect…

This response is incorrect and if you selected this response you have an error in your reconciliation from cash to accrual adjustments. The general rule to convert from cash to accrual is to add the beginning liability balances and subtract the ending liability balances: also subtract the beginning asset balances and add the ending asset balances.
The beginning balances in the liability accounts (AP, Unearned revenue and Wages payable) are added to cash-basis net income because the liabilities are expenses in the prior year but included in cash net income in the current year. The cash outflow related to the beginning liabilities should not be in accrual net income. The ending balances in the liability accounts represent accrual expenses that should be in accrual net income. To adjust from cash to accrual, the ending liability balances are subtracted from cash-basis net income.

The beginning balance in prepaid rent represents cash payments made in the prior period, but the expense belongs in the current period, so the $1,200 is subtracted from cash basis net income. Likewise, the ending balance in prepaid rent represents cash paid this period, but the expense belongs in next period. The same adjustments are made for beginning and ending AR. The beginning AR balance was earned last period, but the cash was received this period, so $1,400 is subtracted from cash-basis income accrual and the ending balance is added to cash-basis income to calculate what was earned on an accrual basis.

C　
Correct!

The general rule to convert from cash to accrual is to add the beginning liability balances and subtract the ending liability balances; also, subtract beginning asset balances and add ending asset balances.

Ｄ
Incorrect…

If you selected this response, you have an error in your reconciliation from cash to accrual adjustments. The general rule to convert from cash to accrual is to add the beginning liability balances and subtract the ending liability balances; also, subtract beginning asset balances and add ending asset balances.

Question 20

Tag Question

Zeta Co. reported sales revenue of $4,600,000 in its Income Statement for the year ended December 31, 2001. Additional information is as follows:

12/31/00 12/31/01

Tag Question

Zeta Co. reported sales revenue of $4,600,000 in its Income Statement for the year ended December 31, 2001. Additional information is as follows:

12/31/00 12/31/01
Accounts receivable $1,000,000 $1,300,000
Allowance for uncollectible accounts (60,000) (110,000)
Zeta wrote off uncollectible accounts totaling $20,000 during 2001. Under the cash basis of accounting, Zeta would have reported 2001 sales of:

A. 	$4,900,000
B. 	$4,350,000
C. 	$4,300,000
D. 	$4,280,000

Answer 20

D

Correct!

The question requires a solution for cash collected on accounts receivable. Using the information for accounts receivable, the collections amount can be found:
Beginning balance + sales - collections - write offs = ending balance
$1,000,000 + $4,600,000 - collections - $20,000 = $1,300,000
collections = $4,280,000
Under the cash basis of accounting, sales equals cash collections.

A
Incorrect…

This calculation is sales plus the change in accounts receivable during the year. But accounts receivable increased and, therefore, should be subtracted from sales in determining cash collections. When accounts receivable increases, sales exceeds cash collections.

B
Incorrect…

This amount fails to deduct write-offs from the change in the accounts receivable balance used to compute cash collections. This overstates cash collections by $20,000. Remember bad debt expense does not impact accounts receivable. It also includes the change in the allowance account. The changes in the allowance account do not affect cash collections.

Question 21

Roro, Inc. paid $7,200 to renew its only insurance policy for three years on March 1, 2005, the effective date of the policy. At March 31, 2005, Roro’s unadjusted trial balance showed a balance of $300 for prepaid insurance and $7,200 for insurance expense.
What amounts should be reported for prepaid insurance and insurance expense in Roro’s financial statements for the three months ended March 31, 2005?

Prepaid insurance Insurance expense
$7,000 $300
$7,000 $500
$7,200 $300

Answer 21

A

Incorrect…

The answer for insurance expense is incorrect because it counts only the expiration of the $300 prepaid insurance. An additional $200 also is included in insurance expense because one month of the renewed policy has been used ($7,200/36 = $200).

B
Correct!

The $300 of prepaid insurance on March 31 before adjustment represents the remaining unexpired portion of the insurance policy before renewal. This amount must have expired by March 31 because there is only one insurance policy, and that policy was renewed March 1. The $300 is included in insurance expense for the three months ended March 31. In addition, one month of coverage has been used on the renewed policy as of March 31. Therefore $7,200/36 months or $200 is included in insurance expense for the three months ended March 31. In total, $500 of insurance expense is recognized. Prepaid insurance remaining at March 31 is $7,200 - $200 = $7,000.

Question 22

GAAP and Accrual Accounting
Clark Co.’s advertising expense account had a balance of $146,000 at December 31, 2003, before any necessary year-end adjustment relating to the following:
Included in the $146,000 is the $15,000 cost of printing catalogs for a sales promotional campaign in January 2004.
Radio advertisements broadcast during December 2003 were billed to Clark on January 2, 2004. Clark paid the $9,000 invoice on January 11, 2004.
What amount should Clark report as advertising expense in its Income Statement for the year ended December 31, 2003?

A. 	$122,000
B. 	$131,000
C. 	$140,000
D. 	$155,000

Answer 22

C
Correct!

The correct advertising expense amount is $146,000 - $15,000 + $9,000 = $140,000. The catalog printing is subtracted because the cost relates to 2004, not to 2003. The benefit of this cost will be received in 2004. The radio advertisements are added because they benefit 2003, but they were not included in the $146,000 because they were paid in 2004. Clark was apparently unaware of the cost before 12/31/03 because the firm was not billed until 2004.

D.Incorrect…

This answer is close but fails to subtract the $15,000 catalog cost from the $146,000. The catalog printing is subtracted because the cost relates to 2004, not to 2003. The benefit of this cost will be received in 2004.

Question 23

Savor Co. had $100,000 in cash-basis pretax income for 1999. At December 31, 1999, accounts receivable had increased by $10,000 and accounts payable had decreased by $6,000 from their December 31, 1998, balances. Compared to the accrual-basis method of accounting, Savor's cash pretax income is:
	A. 	Higher by $4,000.
	B. 	Lower by $4,000.
	C. 	Higher by $16,000.
	D. 	Lower by $16,000.

Answer 23

D
Correct!

cash-basis income is $100,000. The journal entries for an increase and a decrease in accounts payable respectively are:
DR: Accounts receivable 10,000
CR: Sales 10,000
DR: Accounts payable 6,000
CR: Cash 6,000
The increase in accounts receivable should be added to the cash income as it was not considered and is recognized as earned for accrual income. The decrease in accounts payable was subtracted for cash-basis income. This is not a reduction in accrual income, and as a result, should be added back to the cash income. The computation is: 100,000+10,000+6,000 = 116,000, or a $16,000 increase from cash to accrual. In other words, the cash-basis income is $16,000 LOWER than accrual income.

Question 24

Under East Co.’s accounting system, all paid insurance premiums are debited to prepaid insurance. For interim financial reports, East makes monthly estimated charges to insurance expense with credits to prepaid insurance.
Additional information for the year ended December 31, 2005, is as follows:

Prepaid insurance at December 31, 2004 $105,000
Charges to insurance expense during 2005 (including a year-end adjustment of 17,500) 437,500
Prepaid insurance at December 31, 2005 122,500
What was the total amount of insurance premiums paid by East during 2005?

A. 	$322,500
B. 	$420,000
C. 	$437,500
D. 	$455,000

Answer 24

A
Incorrect…

This answer does not treat the charges to interim insurance expense correctly. The correct analysis is:
Beginning prepaid balance + Premiums paid - Expense charges = Ending prepaid balance
$105,000 + Premiums paid - $437,500 = $122,500
Premiums paid = $455,000

D correct
Correct!

Beginning prepaid balance + Premiums paid - Expense charges = Ending prepaid balance
$105,000 + Premiums paid - $437,500 = $122,500
Premiums paid = $455,000

Question 25

Sanni Co. had $150,000 in cash-basis pretax income for the year. At the current year end, accounts receivable decreased by $20,000 and accounts payable increased by $16,000 from their previous year-end balances. Compared to the accrual-basis method of accounting, Sanni’s cash-basis pretax income is:

A. 	 Higher by $4,000.

B. 	 Lower by $4,000.

C. 	 Higher by $36,000.

D. 	 Lower by $36,000.

Answer 25

C
Correct!

The $20,000 AR decrease implies that cash received on account was $20,000 greater than accrual sales. Cash-basis income is, therefore, $20,000 greater than accrual income for this difference. The $16,000 accounts payable increase implies that more inventory was purchased and included in accrual cost of goods sold than was paid. Cash-basis income is, therefore, $16,000 more than accrual income for this difference. In total, cash-basis income is $36,000 greater than accrual income.
A

Incorrect…

This answer analyzes the $16,000 accounts-payable increase incorrectly. This increase implies that more inventory was purchased and included in accrual cost of goods sold than was paid. Cash-basis income is, therefore, $16,000 more than accrual income for this difference because accrual cost of goods sold exceeds cash paid for inventory.

D
Incorrect…

This answer incorrectly analyzes the effect of both differences in the wrong direction. The correct answer is that cash-basis income is higher by $36,000. In other words, the firm generated more cash from operations by $36,000 than it reported in earnings.

Question 26

On July 1, 2003, Roxy Co. obtained fire insurance for a three-year period at an annual premium of $72,000 payable on July 1 of each year.
The first premium payment was made July 1, 2003. On October 1, 2003, Roxy paid $24,000 for real estate taxes to cover the period ending September 30, 2004. This prepayment was made to obtain a discount.

In its December 31, 2003, Balance Sheet, Roxy should report prepaid expenses of:

A. 	$60,000
B. 	$54,000
C. 	$48,000
D. 	$36,000

Answer 26

Ａ
Incorrect…

This amount does not correctly compute the remaining unexpired amounts of fire insurance and taxes. The correct analysis is:
unexpired fire insurance premium: $72,000(1/2) =

The premium covers only one year and 1/2 the year is elapsed as of December 31.

$36,000
Unexpired property tax prepayment: $24,000(9/12)
18,000
Total prepaid expenses (asset) at December 31, 2003
$54,000

Question 27

Tag Question

Kent Co.’s advertising expense account had a balance of $292,500 at December 31, 2003, before any necessary year-end adjustment relating to the following:
Included in the $292,500 is the $30,000 cost of printing catalogs for a sales promotional campaign in January 2004.
Radio advertising spots broadcast during December 2003 were billed to Kent on January 2, 2004. Kent paid the $17,500 invoice on January 11, 2004.
What amount should Kent report as advertising expense in its Income Statement for the year ended December 31, 2003?

A. 	$310,000
B. 	$280,000
C. 	$262,500
D. 	$245,000

Answer 27

C
Incorrect…

This answer fails to add the radio advertising cost. This cost should be added because it benefits 2003 but is not included because it was paid in 2004.

B

Correct!

The correct advertising expense amount is $292,500 - $30,000 + $17,500 = $280,000. The catalog printing is subtracted because the cost relates to 2004, not to 2003. The benefit of this cost will be received in 2004. The radio advertisements are added because they benefit 2003, but they were not included in the $292,500 because they were paid in 2004. Kent was apparently unaware of the cost before 12/31/03 because the firm was not billed until 2004.

Question 28

The following information pertains to Spee Co.’s 2004 sales:

Cash sales
Gross	
$40,000
Returns and allowances	
2,000
Credit sales
Gross	
60,000
Discounts	
3,000
On January 1, 2004, customers owed Spee $20,000. On December 31, 2004, customers owed Spee $15,000. Spee uses the direct write-off method for bad debts. No bad debts were recorded in 2004. Under the cash basis of accounting, what amount of revenue should Spee report for 2004?

A. 	$100,000
B. 	$95,000
C. 	$85,000
D. 	$38,000

Answer 28

A
Correct!

Revenue under the cash basis equals the amount of cash collected. The decrease in accounts receivable is $5,000 ($20,000 - $15,000).
Gross cash sales	
$40,000
Less returns and allowances	
(2,000)
Plus gross credit sales	
60,000
Less discounts	
(3,000)
Plus decrease in accounts receivable (More cash was collected than was recorded as sales when accounts receivable decreases)	
5,000
Equals cash collected	
$ 100,000

Question 29

Ina Co. had the following beginning and ending balances in its prepaid expense and accrued liabilities accounts for the current year:
Prepaid expenses Accrued liabilities
Beginning balance $ 5,000 $ 8,000
Ending balance 10,000 20,000
Debits to operating expenses totaled $100,000. What amount did Ina pay for operating expenses during the current year?

A. 	$ 83,000
B. 	$ 93,000
C. 	$107,000
D. 	$117,000

Answer 29

ＢCorrect

ACD
Incorrect…

An increase in prepaid expenses indicates that more cash was paid than expensed (5,000). An increase in accrued liabilities indicates that more expense was accrued than paid (12,000). The reconciliation of operating expense to cash paid is: 100,000 + 5,000 - 12,000 = 93,000.

Question 30

Tag Question

On November 1, 2005, Key Co. paid $3,600 to renew its insurance policy for three years. At December 31, 2005, Key’s unadjusted trial balance showed a balance of $90 for prepaid insurance and $4,410 for insurance expense.
What amounts should be reported for prepaid insurance and insurance expense in Key’s December 31, 2005, financial statements?

  Prepaid Insurance  	  Insurance expense  
	 $3,300 	 $1,200 
	 $3,400 	 $1,200 
	 $3,400 	 $1,100 
	 $3,490 	 $1,010

Answer 30

Ｃ
Correct!

Prepaid insurance at year end is $3,400, which is the portion of the prepayment on November 1 that continues to the next three years. Of the 36 months of coverage purchased, 34 months remain at December 31: $3,400 = (34/36)($3,600). Insurance expense includes three items: (1) the $90 of prepaid insurance remaining in the trial balance that has expired, (2) the $200 of insurance expense related to the November 1 purchase above ($3,600-$3,400 remaining prepaid), and (3) the expense portion of the $4,410 insurance expense amount in the unadjusted trial balance ($4,410-$3,600) = $810. This firm must have expensed the entire $3,600 November 1 purchase because it was not reflected in prepaid insurance. The difference of $810 reflects actual expense. Therefore, total insurance expense equals $1,100 = $90 + $200 + $810.