Mod 9A And D Review Flashcards
Relevance and faithful representation are…
Fundamental qualitative characteristics of financial information
What are the enhancing qualitative characteristics of financial reporting 4
1 comparability (including consistency)
2 verifiability
3 timeliness
4 understandability
Cost benefit is a…
Financial statement Constraint
Materiality is a…
Threshold for reporting useful information
An estimate of an impairment charge to a fixed asset can be…
Faithful representation
An estimate of an impairment charge to a fixed asset can only be a faithful representation if the entity has done all of the following…3
1 applied impairment rules properly
2 disclosed the process of arriving at impairment estimate
3 disclosed any uncertainties that affect impairment estimate
On an impairment, assuming all of the criteria for faithful representation is met, no other estimate is better than…
The derived estimate comprised of the best available info
Per SFAC 6, revenues are…
Inflows of assets or settlements of liabilities, or both
During period as a result of entities major or primary activities
2 essential characteristics of revenues are that revenues…
1 arise from companies primary earning activities
2 are recurring or continuing in nature
A decrease in an asset is not…
A revenue
When calculating unearned revenue for gift certificates, if 10% of revenue is expected to not be redeemed in the future, then…
10% of sales must be subtracted from total sales
When converting from the cash basis to the accrual basis to report rental income, uncollectible rents written off under the cash basis…
Should be added back into accrual basis rental sales
Under the milestone method, contingent revenue may be…
Recognized in its entirety in period where milestone is achieved
Upon first time adoption of IFRS, an entity may elect to use fair value as deemed cost for…
Any individual item of property, plant and equipment
Performance measure concerned primarily with cash to cash cycles
Earnings
Depreciation expense, prepaid rent and unearned revenue are all examples of…
Deferrals
Receivables and payables are examples of…
Accruals
What is the accrual worksheet entry for adding an allowance for uncollectible accounts?
Uncollectible accounts. Xxx
Allowance for uncollectible accounts. Xxx
What is the worksheet entry to add to inventory?
Inventory. Xxx
Cost of sales. Xxx
What is the worksheet entry to record prepaid insurance and adjust insurance expense?
Prepaid insurance. Xxx
Owner’s capital. Xxx
Insurance expense. Xxx
What is the worksheet entry to record a probable legal loss?
Estimated loss from lawsuit. Xxx
Estimated liability from lawsuit. Xxx
What is the worksheet entry when there is an increase in payroll tax expense and utilities expense, as part of accrued expenses for the year?
Utilities expense. Xxx
Payroll tax expenses. Xxx
Owner’s capital. Xxx
Accrued expenses. Xxx
What is the worksheet entry when living expenses were incorrectly used and proprietors income was incorrectly included in salaries and wages?
Owner’s, drawings. Xxx
Living expenses. Xxx
Salaries. Xxx
What amount should be included in income from continuing operations before tax? Calculation
Net of tax amount/(1-tax rate)
Warranty liability for year one, how is it affected by a recall before issuance in year 2?
Add the recall amount to year 1 warranty liability
A loss for a recognized subsequent event should be reported in…
The current year financial statements
Recognized subsequent events result in a loss recognized in the current year and a…
Corresponding adjustment to record the liability
The price paid to acquire an asset is…
An entry price, not an exit price
The fair value of an asset definition
Price that would be received to sell the asset at the measurement
Date under current market conditions
Current cost for inventories and equipment is measured on the supplementary information at…
The lower of current cost or recoverable amount
For comparative purposes IFRS requires…
The presentation of prior year financial statements
Under IFRS the statement of cashflows my be presented on…
The direct or indirect basis
All corrections of errors should be treated as…
A restatement of prior period financial statements
All corrections of errors on financial statements require a prompt recording the…
Error in the year in which the error was discovered
An error should be reported in the financial statements as an adjustment to…
The carrying value of the assets and liabilities as of the beginning of
The first period presented
With an offsetting adjustment to the opening balance of retained
Earnings for that period
The accumulated changes in valuation (unrealized excess of cost over market value) of available for sale marketable equity securities shall be reported as…
Accumulated other comprehensive income
Results of operations of a component that has been or will be discontinued should not be reported as part of…
Other comprehensive income
