Keywords Flashcards
1
Q
Discontinued operations
A
Watch for questions that have the sentence “Represents a major shift for Doe and will have a significant effect on its operations and financial results”
2
Q
Gross Profit Margin vs Profit Margin
A
Remember they are different formulas. DON’T GET CONFUSED!!!!
3
Q
Having Commercial Substance vs Lacking Commercial Substance
A
Watch for questions that have the sentence “future cash flows change as a result of the transaction” or “the economic position of the two parties changed because of the exchange”. These usually means the transaction has commercial substance.
4
Q
Costs incurred after technological feasability has been established.
A
Must be capitalized.
5
Q
Decommissioning liability
A
ARO!
6
Q
Assets increase usefulness
A
Capitalize asset!!!
