Leases, Gov, Basic Concepts, BCC Flashcards
1
Q
Primary Characteristics
A
Faithful Representation, Relevance
2
Q
Components of Faithful Representation
A
Free from error, complete, neutral
3
Q
Components or Relevance
A
Material, predictive value, confirmatory value
4
Q
Enhancing characteristics
A
Comparable, timely, understandable, verifiable
5
Q
Four Assumptions
A
(Entirely from your GUT)
Entity, Going concern, unit of measure, time period
6
Q
When AR decreases (cash to accrual)
A
Cash received was higher than accrual sales
7
Q
When AP increases (cash to accrual)
A
Cash received was higher than accrual sales
8
Q
Collection of Note receivable is what type of cash flow
A
Investing
9
Q
Collection of Note Payable is what type of cash flow
A
Financing
10
Q
Ending AR Equation
A
Beg AR+Sales-collections(or cash sales)-write offs
11
Q
Days to File 10Q
Large Acc filer (700mill)
Non Acc filer
A
Large=40 days Non Acc= 45 days
12
Q
Highest and best of a non financial asset can be determined how?
A
Through use or exchange
13
Q
Blockage Factor and quoted Market prices
A
Do not affect FV
14
Q
Main SEC pronouncments
A
Fin Rep Releases (FRR)
Staff Acct bull (SAB)
15
Q
ASC 820 does not apply to what?
A
Inventory
16
Q
Approach to determine FV based on replacement
A
Cost
17
Q
Retained earnings equation
A
Rev-exp -tax=NI+old RE
18
Q
Payment of Dividends cash flow activity
A
Financing
19
Q
Unamortized bond disc cash flow activity
A
Operating
20
Q
Defense Interval Ratio
A
QA/Daily EXP
Liquidity
21
Q
Asset Turnover
A
Sales/ Avg total A
22
Q
AR Turnover
A
Net Credit Sales/ Avg Net AP
O
23
Q
Notes Payable Measurement
A
Not at cash expected to be received
24
Q
Inventory and PPD Asset Classification
A
NOT liquid
25
Quick Ratio
```
Liquid CA (market sec, cash, ar net) / CL
(L)
```
26
Debt to Equity
Total Debt/ OE
| L
27
Working Capital
CA - CL
| L
28
Working Capital Ratio
CA/CL
| L
29
Acid Test Ratio
| quick Ratio
Cash+net rec+mark sec/ CL
| L
30
Securities Defense Interval Ratio
Cash+net rec+mark sec/ Avg daily cash exp
| L
31
Times interest Earned
Net inc+Int exp+tax/ Int exp
| L
32
Times Pref Dividend Earned
NI / Annual Pref Dividend obligation
| L
33
days in avg rec
Days in yr/ AR TO
| O
34
Inventory Turnover
COGS / Avg Inv
| O
35
days supply in inv
Days in yr/ Inv TO
| O
36
Days in operating
```
# days sales in AR+#days supply in inv
(O)
```
37
Debt to equity
Debt(liab) / OE
| P
38
Profit Margin
NI / Net Sales
| P
39
Return on total A
NI + Int exp / avg total A
| P
40
Return on cs equity
NI-pref div(only whats pd) / avg cs equity
| P
41
Return on OE
NI / Avg stock equity
| P
42
EPS
NI- pref div pd / weighted avg # shares out
| P
43
Price Earned
MP common share / EPS
| P
44
Total Basis
Cash div to cs / ni to common share
| P
45
Per share basis
Cash div per cs share / earn per cs
| P
46
Common Stock yeild
Div per cs / MP per cs
| P
47
Debt to equity
total Liab / total share equity
| E/I
48
Owners Equity
Share holders equity/ TA
| E/I
49
Debt Ratio
Total L/ Total A
| E/I
50
BV per CS
Common share equity / # cs out
| E/I
51
BV per PS
Pref share equity / # of PS out
| E/I
52
Deferred Means
Cash Before
53
Accrual Means
Cash After
54
Convert Accrual to Cash
^Liab+^Equity-^other assets(acc exp)
55
Convert Cash to Accrual
^other assets-^liab-^other assets
56
PPE and Intangibles are on BS at
Historical Cost or depreciated amortized cost
57
Receivables are on BS at
NRV
58
Inventory are on BS at
Lower of Cost or Market
59
Invest in Mark sec are on BS at
MV
60
Liabilities are on BS at
PV
61
Owners Equity is on BS at
Historical value of inflows and residual value
62
Entry for Discount on Bonds Payable
DR: Int exp
CR: Disc BP
63
Balance for Bond Payble account
Credit Disc on BP is a debit balance which reduces the CV of the bonds so when so when you amort you CR Disc to increase the value of the bonds
64
Treatment of Error correction
recognized as an adj to opening balance on the RE stmt includes changes in policy that are going from not GAAP to GAAP
65
Effective Interest Method
| Int Exp =
CA bond x yeild rate x time pd
66
Effective Interest Method
| Cash Int pd=
FV Bond x stated rate x time pd
67
Bond Premium
Diff between int payable and expense
68
Unamortized bond premium
FV bond - CA bond - premium
69
What must a development stage company present
IS and stmt of Cash flow with cumulative amounts
70
Pension obligation adjustment
If obligation exceeds assets then do following
| Proj Obligation-FV A-PensionA/L= adjustment Needed
71
Accounting Principles (5)
Measure at HC, Measure at other, rev recog, exp recog, full disclosure
72
NRV uses
app liquidation, or SP after costs deducted (lower cost or market Inventory)
73
Current replacement Cost
Cost to replace asset
74
FV
also CMV price received to sell an asset in an orderly transaction
75
Amort Cost
HC - acc Dep
76
NPV
Discounting the expected future cash flows ( used for cap budgeting)
77
Marketable securities are valued at?
CMV
78
Change in Estimate treatment
recognized in pd of change and future
79
Interim tax expense is calculated YTD Ex:
SO Q2:
| (total inc x T rate) - Q1 reported tax= Q2 interim tax
80
Gov Availb funds =
Approp- Encumbrances - expenditures
81
Consolidated RE
only parent co dividends are reported
82
10Q
10K
S-1
8K Information
10q is quarterly filed to SEC
10k is annual
S-1 is initial securities registration
8k is information report filed anytime of year
83
What happens JE wise when dividends are declared
RE goes down
DR:RE CR: Div Pay when declared
DR: Div Pay CR: cash when paid
84
JE for amort on Bond Premium
DR: Prem on BP
CR: Int Exp
This reduces CV and int exp thus increases NI
85
Personal Assets recognized at
Estimated CV
86
Non for profits provide the following Stmts
stmt fin position, stmt of activities, stmt of cash flows
87
FV
Price received when selling an asset or paid when transferring an liab
88
COGS
BI+purch-EI
also
Percentage: NS - GP if Gp rate is 30 then cogs rate must be 70 Ex: NS$(70)=Cogs$
89
Functional Curreny
Currency of primary market of entity
90
Presentation Currency
That which Fin stmts are presented in
91
Encumbrances
commitments related to unperformed contracts for goods or services
92
Entry when Gov records Budget and uses appropriations
Apps show max spending authority
DR: Est rev
CR: approps
CR: budgetary fund balance
93
Major customer must be disclosed when
10% of sales or more go to that 1 person
94
Capital Lease Cost basis of an asset is?
PV of min pmts discounted at appropriate rate. Lessee records by...
DR: Asset
CR: Liab
95
BS affect of Cash dividends pd
shows no change in RE and a decrease in minority interest
96
Push down accounting
IFRS does not all SEC does
97
Value of Asset purchased with stock
Record at amount of stock disbursed
| Shares x MV
98
Finders Fees and Registration/Issue Fees
Finders are just expensed when determining add pd in cap and reg/issue are taken out of add paid in cap
99
Consolidated Equity
Same as parents before purchase
100
Treatment of equity investments
20% owned=FV or Amort
20-50% = Equity or FV
51-100% Consolidated or Equity
101
GP % =
GP/Installment Sales
102
Deferred GP =
GP% x end of yr Rec
| Add yrs together multiplied by their own %'s
103
Cash to Acc for Operating Exp
- increase in PPD + increase in Liab
104
Cash pd to suppliers
cogs - decrease in inv + decrease in Ap
105
What is depletion
allocation and amortization
106
To determine cash pd for an Expense =
Exp amt + beg payable - end Payable - beg PPD + end PPD = Total cash paid
107
Royalties are recognized?
As revenue when they are earned
108
Most conservative income method
Cost Recovery
109
Cogs with purch as given
Cash pd + increase in AP + decrease in Inv
110
Installment Sales recog
GP deferred until cash is collected and the apply GP rate to cash collections and that is INc
111
LIFO, contract method, extraordinary items
Not allowed by IFRS
112
When change from cash to accrual report how?
as prior pd adj net of tax by adjusting beg bal of RE
113
To find out what is over or understated (tower)
```
BI+
Purch=
GAS-
EI=
COGS Flows into NI and then RE
```
114
accounting change in estimate
in pd and future
115
Accounting error
requires prior pd adj
116
Dismantle exp at end
recognize over life of asset
117
Principle vs Est change
assume estimate change
| change in method = change in principal
118
Sum of yrs Digits =
Years remaining to amort / Year OG(year OG+1)/2
119
Change in accounting Method
as prior pd adj net of tax by adjusting beg bal of RE
120
Change in accounting principal
Restate prior stmts
