Random Quiz #4

Question 1

IFRS terms when dealing with foreign entities

Answer 1

1. Functional - Currency used for transactions (primary economic environment where entity does business)
2. Foreign - Anything other than functional currency
3. Presentation - Reporting currency (may or may not be the functional currency)

Question 2

When a receivable is written off, how are various accounts effected including net income, a/r, working capital?

Answer 2

A/R is decreased but NET A/R is a wash because the allowance reduction offsets the a/r reduction. Correct answer is
NET INCOME & WKG CAPITAL ARE UNAFFECTED.

Question 3

Intrinsic Method (stock options)

Answer 3

Stock options valued at date they were Granted
Difference between EXERCISE PRICE and FV of the share on the date Granted - but only if FV is HIGHER.
This diff x # of shares is recorded as Compensation expense

If FV > Exercise Pr, then sh. x diff = compensation
If FV

Question 4

Based on Consolidated Statements:

How determine CASH total

Answer 4

Parent + Subsidiary

Question 5

How determine Investment in Subsidiary on Consolidated Statement?

Answer 5

Investment is ELIMINATED entirely in consolidation along with the STKH EQUITY accounts of the subsidiary

Question 6

How determine Noncontrolling Interest on Consolidate Statements?

Answer 6

Shown in Consolidated F/S, but not in Separate Unconsolidated F/S.

Question 7

How determine Common Stock on Consolidated Statements?

Answer 7

Same as for PARENT only.

(Next 3 cards) “Consolidated Stockholders’ equity consists of the SE accts of the Parent plus the Noncontrolling Interest

Question 8

Determine Beginning Retained Earnings on Consolidated Statement

Answer 8

Same as for PARENT only

Question 9

Determine Dividends paid on Consolidated Statements

Answer 9

Will include only those paid by PARENT

Question 10

Vocabulary - Gaap vs IFRS for result on I/S

Answer 10

GAAP = Net Income
IFRS = PROFIT

Question 11

Wrongful dismissal suit considered to be without merit - what is required in financial reporting?

Answer 11

Neither disclosed or accrued

“Remote” probability is neither D or A