Mod 9A And D Review

Question 0

Relevance and faithful representation are…

Answer 0

Fundamental qualitative characteristics of financial information

Question 1

What are the enhancing qualitative characteristics of financial reporting 4

Answer 1

1 comparability (including consistency)
2 verifiability
3 timeliness
4 understandability

Question 2

Cost benefit is a…

Answer 2

Financial statement Constraint

Question 3

Materiality is a…

Answer 3

Threshold for reporting useful information

Question 4

An estimate of an impairment charge to a fixed asset can be…

Answer 4

Faithful representation

Question 5

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

Answer 5

1 applied impairment rules properly

2 disclosed the process of arriving at impairment estimate

3 disclosed any uncertainties that affect impairment estimate

Question 6

On an impairment, assuming all of the criteria for faithful representation is met, no other estimate is better than…

Answer 6

The derived estimate comprised of the best available info

Question 7

Per SFAC 6, revenues are…

Answer 7

Inflows of assets or settlements of liabilities, or both

During period as a result of entities major or primary activities

Question 8

2 essential characteristics of revenues are that revenues…

Answer 8

1 arise from companies primary earning activities

2 are recurring or continuing in nature

Question 9

A decrease in an asset is not…

Answer 9

A revenue

Question 10

When calculating unearned revenue for gift certificates, if 10% of revenue is expected to not be redeemed in the future, then…

Answer 10

10% of sales must be subtracted from total sales

Question 11

When converting from the cash basis to the accrual basis to report rental income, uncollectible rents written off under the cash basis…

Answer 11

Should be added back into accrual basis rental sales

Question 12

Under the milestone method, contingent revenue may be…

Answer 12

Recognized in its entirety in period where milestone is achieved

Question 13

Upon first time adoption of IFRS, an entity may elect to use fair value as deemed cost for…

Answer 13

Any individual item of property, plant and equipment

Question 14

Performance measure concerned primarily with cash to cash cycles

Answer 14

Earnings

Question 15

Depreciation expense, prepaid rent and unearned revenue are all examples of…

Answer 15

Deferrals

Question 16

Receivables and payables are examples of…

Answer 16

Accruals

Question 17

What is the accrual worksheet entry for adding an allowance for uncollectible accounts?

Answer 17

Uncollectible accounts. Xxx

Allowance for uncollectible accounts. Xxx

Question 18

What is the worksheet entry to add to inventory?

Answer 18

Inventory. Xxx

Cost of sales. Xxx

Question 19

What is the worksheet entry to record prepaid insurance and adjust insurance expense?

Answer 19

Prepaid insurance. Xxx
Owner’s capital. Xxx
Insurance expense. Xxx

Question 20

What is the worksheet entry to record a probable legal loss?

Answer 20

Estimated loss from lawsuit. Xxx

Estimated liability from lawsuit. Xxx

Question 21

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?

Answer 21

Utilities expense. Xxx
Payroll tax expenses. Xxx
Owner’s capital. Xxx
Accrued expenses. Xxx

Question 22

What is the worksheet entry when living expenses were incorrectly used and proprietors income was incorrectly included in salaries and wages?

Answer 22

Owner’s, drawings. Xxx
Living expenses. Xxx
Salaries. Xxx

Question 23

What amount should be included in income from continuing operations before tax? Calculation

Answer 23

Net of tax amount/(1-tax rate)

Question 24

Warranty liability for year one, how is it affected by a recall before issuance in year 2?

Answer 24

Add the recall amount to year 1 warranty liability

Question 25

A loss for a recognized subsequent event should be reported in…

Answer 25

The current year financial statements

Question 26

Recognized subsequent events result in a loss recognized in the current year and a…

Answer 26

Corresponding adjustment to record the liability

Question 27

The price paid to acquire an asset is…

Answer 27

An entry price, not an exit price

Question 28

The fair value of an asset definition

Answer 28

Price that would be received to sell the asset at the measurement
Date under current market conditions

Question 29

Current cost for inventories and equipment is measured on the supplementary information at…

Answer 29

The lower of current cost or recoverable amount

Question 30

For comparative purposes IFRS requires…

Answer 30

The presentation of prior year financial statements

Question 31

Under IFRS the statement of cashflows my be presented on…

Answer 31

The direct or indirect basis

Question 32

All corrections of errors should be treated as…

Answer 32

A restatement of prior period financial statements

Question 33

All corrections of errors on financial statements require a prompt recording the…

Answer 33

Error in the year in which the error was discovered

Question 34

An error should be reported in the financial statements as an adjustment to…

Answer 34

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

Question 35

The accumulated changes in valuation (unrealized excess of cost over market value) of available for sale marketable equity securities shall be reported as…

Answer 35

Accumulated other comprehensive income

Question 36

Results of operations of a component that has been or will be discontinued should not be reported as part of…

Answer 36

Other comprehensive income