RANDOM QUIZ#2 Flashcards
When outcome cannot be measured reliably, what method does IFRS require?
Cost-recovery method
How are interest, royalties and dividends recognized under IFRS
When it is probably that an economic benefit will flow to entity and amt can be reasonably measured.
How is interest measured under IFRS?
Using the EFFECTIVE INTEREST METHOD
How are dividends recognized under IFRS?
Divs recognized WHEN SHAREHLDR OBTAINS RIGHTS to receive the dividend.
How are royalties recognized under IFRS
Royalties are recognized on the ACCRUAL BASIS under IFRS
Trial balance categories included in Current Assets total may include the following 6:
- Net of overdrafts and uncleared drafts
- Inventory
- Cash from land sale
- Cash
- A/R (net allowances)
- Prepaid exps
What happens when Treasury stock is reissued for a higher or lower price than what it was purchased for?
No gain or loss is recognized on the purchase, reissue, or retirement of Treasury Stock!
How do you figure amt of intercompany sales when given a consolidated B/S?
Add revenues shown for Parent and Subsidiary. Compare to Consolidated Revenue total. The difference will be the amt of intercompany sale’
when calculating current liabilities what is the treatment for ‘discount on bonds payable”?
This is netted (contra acct) with the “bonds payable” amount so if b/p is 25k and discount on b/p is 3k, then you will be adding 22k to the CL for that year.
What qualities are emphasized in the interim reports?
Timliness & Relevance
Adjustment for specific price change equals_____
Current Cost
Adjustment for general price level changes equals___
Constant Dollar
what 2 things make up Comprehensive Income
Net Income
Other Compr. Income (OCI)
What is J.E. when issuing a government purchase order?
dr: Encumbrances
cr: Reserved for Encumb. (Budg Fund bal)
Where does unfunded prior service cost fit in to Pension Liability calculation?
was n/a in the problem i solved
Change in business env. is affecting factory, how do you determine amount of impairment loss?
- Determine IF loss - Sum of undiscounted future cash flows is compared to CV(BV) and is less.
- Amt is determined by Book Value (CV) vs. FV
For a company preparing 1st year of IFRS financial stmts, what is the minimum reporting requirement?
3 statements of financial position are minimum for 1st time IFRS reporting.
- Items recorded at original cost
- Items are adjusted to their current amounts.
- Items (assets/cash/dollars) are NOT adjusted for changes in general price level (inflation).
- Items are adjusted for changes in the general price level (inflation) aka “Real Dollars.”
- Historical Cost
- Current Cost
- Nominal Dollar
- Constant Dollar
What amt s/Frame report as a current asset for interest on a (details given) note receivable?
It is Carrying amt x Int rate x time, but you must remember to adjust the carrying amount for any principle that has already been paid!!
If 200, 9%, $1000 bonds are sold at 101, what amount, including accrued interest, does the seller receive at issuance?
The bonds have a stated value of 200,000.
The sale at 101 means 202,000 was received.
The accrued interest is based on STATED, not MV, so 202000 + .09 x 200,000 x 5/12.
(there were 5 mos between sale and statements)
