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Financial Accounting & Reporting - CPA > Module 9A Part 1 > Flashcards

Module 9A Part 1 Flashcards

1
Q

Cash Collections X Gross Profit %

A

Realized Gross Profit

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2
Q

Ending Accounts Receivable X Gross Profit %

A

Deferred Gross Profit

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3
Q

Beginning Accounts Receivable for that Year

A

Installment Sales

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4
Q

Installment Sales - Cost

A

Gross Profit

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5
Q

Gross Profit / Installment Sales

A

Gross Profit %

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6
Q

When to use Installment Sale method?

A

Cannot estimate collectibility

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7
Q

When to use Cost Recovery Method?

A

Can’t determine collectibility of receivables

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8
Q

Definition of Conservatism

A

Bias in all U.S. GAAP - The accountant, when confronted with alternative methods of accounting treatment, will choose the one that does not overstate assets or earnings

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9
Q

3 part Definition of Assets

A
  1. Obtain it or control it today
  2. It will provide benefits in the future
  3. It occurred as a result of a past transaction
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10
Q

3 part Definition of Liabilities

A
  1. Owe it as of today
  2. You will sacrifice something in the future
  3. It occurred as a result of a past transaction
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11
Q

Comprehensive Income SFAC Definition

A

Any change in Shareholder’s Equity that does not involve the owners (investments or distributions)

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12
Q

Normal Balance for Assets on T Account

A

Debit

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13
Q

Normal Balance for Liabilities on T Account

A

Credit

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14
Q

Normal Balance for Shareholder’s Equity on T Account

A

Credit

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15
Q

Normal Balance for Revenue on T Account

A

Credit

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16
Q

Normal Balance for Expenses on T Account

17
Q

In calculating present value in a situation with a range of possible outcomes all discounted using the same interest rate, the expected present value would be…

A

the sum of probability-weighted present values

18
Q

The two fundamental qualitative characteristics of accounting information are…

A

Relevance and Faithful Representation

19
Q

According to the Statement of Financial Accounting Concepts, neutrality is part of:
Faithful Representation?
Relevance?

A

Faithful Representation - Yes

Relevance - No

20
Q

According to the FASB conceptual framework, which of the following is an enhancing quality that relates to both relevance and faithful representation?

a. Comparability
b. Confirmatory Value
c. Predicative Value
d. Freedom from error

A

a. Comparability

Financial Accounting & Reporting - CPA (4 decks)

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