Ninja Notes: Personal Financial Statements, Segments & Interim Reporting; Inventory; Investments Flashcards
What Personal financial statements are required?
> Stmt. of Financial Position
> Stmt. of Changes in Net Worth
What is the presentation of the Stmt. of Financial Condition?
Assets (Liabs.) (Est. Taxes on Assets Sold) --------------------------------------- = Net Worth
How should business interest that constitute a large % of total assets be presented?
They should be separated from other investments.
What are some Interim Reporting rules that differ from GAAP?
> GP method may be used to estimated COGS and EI.
> Temp. declines in inventory aren’t recognized.
Discontinued Operations and Extraordinary Items under interim reporting?
> Aren’t prorated.
> Are fully recognized in Interim Period as incurred
How are cumulative gains and losses handled under Interim reporting?
They are reported as if they occurred in the first quarter.
What are the Tests of Significance for a company under Segment reporting?
> Revenue of segment is 10% of more of total
Profit is 10% or more of total
Segment assets are 10% or more or total
75% Test
- All segments revenues must equal 75% of total external revenues
What are some non-inventoriable costs?
> Sales Commissions
Interests on Liabs. to Vendors
Shipping Expense to Customers
What is the Gross Method for Inventory discounts?
Records discounts only when used.
What is the Net Method for Inventory discounts?
Records discounts whether used or not; unused discounts are allocated to financing expense.
Abnormal inventory costs?
Not included in inventory–includes waste>
Effect of B.Inv. over/understated?
Has no effect on End. Retained earnings.
Effect of E.Inv. being overstated?
COGS are understated and End. RE. are overstated.
Effect of E.Inv. being understated?
COGS are overstated and End. RE. are understated.
FIFO (little cat) under Rising Prices?
> FIFO has the Lowest COGS
> FIFO (cat) sees a mouse… starts Low and is Rising
> If COGS is low, that means EI is High.
