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Yaeger FAR > Quiz Generator Wrong Answers > Flashcards

Quiz Generator Wrong Answers Flashcards

0
Q

Failure to accrue a cost in 20x1 is an error which should be reported in 20x2 as…

A

As a prior period adjustment

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1
Q

Any error in the financial statements of a prior period discovered after the financial statements are issued, shall be reported as…

A

An error correction, by restating prior period financial statements

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2
Q

Change in depreciation is a change in accounting estimate shown on…

A

The income statement

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3
Q

With respect to the objective of general purpose financial reporting, what are US GAAP and IFRS differences?

A

With the issuance of SFAC 8, chapter 1, US GAAP and IFRS have
The same “objective of general purpose financial reporting”

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4
Q

How should the effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate be reported?

A

As component of income from continuing operations

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5
Q

Whenever a change in accounting principle is inseparable from a change in accounting estimate, the change should be considered as…

A

A change in an accounting estimate

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6
Q

Guaranteed residual value should be added to…

A

Minimum lease payments at present value

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7
Q

Capital lease accounting for a lesser involves determining…

A

Amounts and timing of all cash flows not considered Executory
Costs

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8
Q

Capital lease accounting for a lessee includes…2

A

1 minimum lease payments

2 residual values

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9
Q

Under a capital lease of a lesseeThe sum of minimum lease payments and guaranteed residual value is…

A

Capitalized as an asset

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10
Q

Under IFRS, what are 2 measurements allowed to estimate and report a liability for the cost of settling a lawsuit?

A

1 use range of amounts that may be lost in lawsuit and the best
Number in the range must be chosen to accrue

2 chosen amount must always be discounted to present value

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11
Q

When calculating units of production method of depreciation, what is the calculation in the first year

A

Depreciation expense =

Cost - Salvage value) x (units consumed/total units

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12
Q

The first balance sheet must recognize all assets and liabilities as required by IFRS and…

A

All assets and liabilities as required by IFRS

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13
Q

For available for sale securities, if a decline in value is not temporary, the cost basis of the individual security should be…

A

Written down to fair value and the amount of the write down

Is included in earnings (income statement)

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14
Q

A financial instrument that embodies an unconditional obligation or one other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares must be classified as a liability if at inception, the monetary value of the obligation is based solely or predominantly on any one of the following 3 conditions…

A

1 fixed monetary amount known at inception

2 variations in something other than the FV of issuer’s equity shares

3 variation inversely related to changes in FV of issuer’s equity shares

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15
Q

Fixed monetary amount known at inception, example

A

Payable settleable with variable number of issuer’s equity shares

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16
Q

Variations in something other than the fair value of the issuer’s equity shares, example

A

Financial instrument indexed to S&P 500 and settleable with a
Variable number of issuer’s equity shares

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17
Q

Variations inversely related to changes in fair value of the issuer’s equity shares, example

A

Written put option that could be net share settled

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18
Q

During periods of inflation, a perpetual inventory system would result in the same dollar amount of ending inventory as periodic inventory system under which inventory valuation method?

A

Same under FIFO

Not same under LIFO

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19
Q

The lessor shall measure the gross investment in a direct financial lease initially as the sum of the following 2 amounts

A

1 minimum lease payments

2 Unguaranteed residual value accruing to benefit of lessor

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20
Q

In the company’s year end balance sheet, what amount of liability for compensated absences is required for reporting?

Payment for vacation days = $10,000
Unadjusted liability balance = $21,000

A

$10,000 only

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21
Q

Research and development costs are defined as the…

A

Planned research for new knowledge and the translation of

research findings into a design for a new product or process

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22
Q

Development of software for internal use is…

A

Excluded from research and development

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23
Q

Marketing research is…

A

Specifically excluded from research and development

24
Q

The SEC website lists the following 3 steps in the rule making process…

A

1 concept release

2 rule proposal

3 rule adoption

25
Q

Common stock dividend is…

A

Not considered income

26
Q

Dividend income for the year would includes…

A

Both current year dividends and cumulative dividends

27
Q

An employer’s obligation for post retirement health benefits that are expected to be provided to or for an employee must be fully accrued by the date where…

A

Employee is fully eligible for benefits

28
Q

What is the journal entry for an operating lease payment of $25,000, when the lease is for 3 years total with total payment of $90,000?

A

Rent expense 30,000
Cash. 25,000
Lease liability. 5,000

29
Q

How is an unconditional purchase commitment reported?

A

Not reported in the balance sheet, but disclosed in the notes
At present value of future required payments

30
Q

Title search fees are…

A

A capitalized cost to land

31
Q

Where in its financial statements should a company disclose information about its concentration of credit risks?

A

Notes of financial statements

32
Q

Per GASB, net position should be reported as restricted if use is constrained either by…2

A

1 Externally imposed conditions such as from creditors or grantors

2 or by legislation

33
Q

Councils actions do not constitute…

A

Restrictions on net position

34
Q

Which of the following is not an item that is required to be disclosed about reportable segments profit or loss?

A

Rent expense

35
Q

Conceptually interim financial statements emphasize…

A

Timeliness over faithful representation

36
Q

A gain on a foreign currency transaction pertaining to a receivable or payable purchased in a foreign currency. Where is it reported?

A

on the income statement

37
Q

What is the adjusting journal entry entered for a gain on a futures contract?

A

Option (futures contract). Xxx

Unrealized holding gain-equity. Xxx

38
Q

How is a notice a college receives from a recent graduate that the college is named as a beneficiary of $10,000 in the graduates will treated on the public college’s statement of activities? Why?

A

It should not be recognized that year

Wills can change and there is a lot of uncertainty

39
Q

When Remeasuring foreign currency financial statements into the functional currency, what item would be re measured using historical exchange rates?

A

Inventories carried at cost

40
Q

Combined statements may be used to present the results of operations of…2

A

1 commonly controlled companies

2 companies under common management

41
Q

How are discontinued operations and extraordinary items that occur at mid year initially reported for interim statements?2

A

1 reported separately net of tax on income statement for interim
period

2 disclosure in notes of interim statements

42
Q

How do you calculate end of year retained earnings for an equity method investment!

A

End of year retained earnings =

Beginning of year retained earnings + net income - dividends

43
Q

Reconciliation of ending retained earnings to net cash flow from operations would serve…

A

No useful purpose and not be disclosed in statement of cash flows

44
Q

Interest payments on the statement of cashflows are…

A

Included in operating activities

45
Q

In a consolidated balance sheet, what amount should a company report as intercompany receivables?

A

$0

46
Q

An entity must classify as a liability a financial instrument, other than an outstanding share, that, at inception both…

A

1 embodies an obligation to repurchase the issuer’s equity shares
And
2 requires/may require issuer to settle obligation by transferring
Assets

47
Q

An entity must be classify as a liability a financial instrument, other than an outstanding share, that at inception both embodies an obligation to repurchase the issuer’s equity shares and requires/may require issuer to settle obligation by transferring Assets. Examples 2

A

1 forward purchase contracts

2 written put options on issuer’s equity shares that are physically
Settled or net cash settled

48
Q

Under GASB, Programs are financed from…

A

Program revenues and general revenues

49
Q

Under GASB, program revenues are derived…2

A

1 Directly from program itself
Or
2 from parties outside the reporting government’s taxpayers or
Citizenry as a whole

50
Q

Under GASB, All revenues are general revenues unless…

A

They are required to be reported as program revenues

51
Q

Under GASB, all taxes are…

A

General revenues

52
Q

3 classes of freestanding financial instruments that must be presented in the balance sheet as liabilities (they are not presented between liabilities and stockholder’s equity)

A

1 mandatorily redeemable financial instruments

2 obligations to repurchase the issuer’s equity shares by
Transferring assets

3 certain obligations to issue a variable number of shares

53
Q

Acquisition related costs are…

A

Costs the acquirer incurs to effect a business combination

54
Q

All acquisition related costs should be…

A

Expensed in the period incurred

55
Q

Costs incurred by the acquiring entity that are directly related to acquisition are…

A

Expensed as incurred

56
Q

Indirect acquisition costs incurred by the acquiring entity are…

A

Expensed as incurred

57
Q

Earnings per share data should be be reported on the face of the income statement or other related notes for entity that reports…3

A

1 discontinued operation

2 extraordinary item

3 cumulative effect of an accounting change

Yaeger FAR (59 decks)

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