Miscellaneous Flashcards
What is the formula for the times Interest earned ratio
(Income before interest expenses and taxes)/interest expense
How is insurance expense calculated in a year for a life insurance policy
Premium - increase in asset (surrender value)
An increase in the cash surrender value of a life insurance policy owned by a company would be recorded by
Decreasing annual insurance expense
Define a special item in regards to governmental reporting
An occurrence that is both unusual and infrequent, that results from management action
What is the formula for basic earnings per share
(Net Income - PS/Dividend)/weighted average stock outstanding
Where in it’s financial statements should a company disclose information about it’s concentration of credit risks
Notes to financial statements
Formula for Inventory Turnover
COGS/average Inventory
COGS=BI + Net purchases - Ei
Average inventory = (BI + EI)/2
Formula for Quick/Acid Test Ratio
Quick Assets - (Pre-Paids and Inventory)/Current Liabilities
Quick Assets include Cash, Net AR, and marketbale equity securities
Formula for AR turnover in days
AR Turnover = Net Credit Sales/ Average Recievables
Turnover in days=365/AR Turnover
Formula for day sales in inventory
Average Inventory/COGS * Working days per year
Average Collection Period for Accounts Receivable
AR Turnover/360
AR Turnover = Net Credit Sales/Average AR
What is the formula for the defense interval ratio
Quick Assets/ Average Daily Cash expenditures
Define Restricted in regards to government accounting
Constrained by either externally imposed conditions such as from creditors or grantors, or by legislation. The council’s actions do not constitute external constraints or enabling legislation
Intrinsic Value formula for options
Market price - exercise price
When is revenue recognized under a long-term construction contract using the completed contract method
Deferred until contract is complete
What steps are necessary for the SEC to make a rule
Concept Release
Rule Proposal
Rule Adoption
In a capital lease what does the gross lease receivables account represent.
The entire lease payments to be received by the lessor in an undiscounted fashion plus residual value
Managements Discussion and analysis is classified as
Required Supplementary Information
In governmental accounting an object refers to
“The type(S) of items purchased or services obtained” i.e. “What” is acquired
What items are not eligible for the fair value election
An investment in a subsidiary that the entity is required to consolidate
An interest in a variable interest entity that the entity is required to consolidate
Employers and plan’s obligations (or assets representing net overfunded positions) for pension benefits, other post retirement benefits (including health care and life insurance benefits) post employment benefits, employee stock option and purchase plans, and other forms of deferred compensation arrangements
Financial assets and financial liabilities recognized under leases
Deposit liabilities, withdrawable on demand, of banks, savings and loan associations, credit unions, and other similar depository institutions .
Financial instruments that are in Whole or in part, classified by the issuer as a component of shareholders equity (including “temporary equity”). Ex convertible debt security with a non contingent beneficial conversion feature
The 4 criteria that a lease must hit one of to be a capital lease include
TT: Title Transfer
BPO: Bargain Purchase Option
75: 75% or more of economic life of asset
90: pv of lease payments is 90% or more of fair value of leased assets
When a lease is a capital lease, at what amount does the lessee recognize a lease obligation
Pv of the minimum lease payments
Recognition criteria of all eligibility requirements are met is characteristic of(govt)
Fund level statements
Entity wide statements
Both
Explain the lower of cost or market inventory valuation in respect to IFRS application
Lower of cost or net realizable value
Cash outflows from financing activities include
Cash payments for dividends and principal payments to creditors
Disclosure is required by public ally held companies if 10% or more of total revenues are derived from
Both sales to single customer and export sales
What are the accumulated benefit obligation and the projected benefit obligation based on
Accumulated-prior compensation
Projected- future compensation
Formula for end of year projected benefit obligation
Begin bal + service cost + int cost - benefits paid
Formula for pension expense
Service cost - expected rate of return on plan assets, +amortization of prior service costs + interest cost on pension obligation
Software production costs are capitalized and reported at the lower of…
Unamortized cost or net realizable value (nrv)
