Where should these items be found on the BS? 1. Idle Machinery 2. Cash Surrender Value of life insurance 3. Marketable equity investments 4. Treasury stock

1. Assets 2. Assets 3. Assets 4. SE

REVIEW Flashcards by Jenni Buckner

How should a govt choose to allocate indirect expenses:

In a column separate from the direct expenses to enhance comparability with other govts that do not allocate

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Statement of Net assets availabe for benefits of the plan must include the following:

~Total Assets and Liabilities
~Net assets reflecting all investments at FV
~Net assets available for benefits

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What is the proper measurement of an impaired asset held for sale?

Lower of FV, less costs to sell or CV

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An organization is most likely to be considered a govt if:

it has the power to enact and enforce a tax levy

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What constitutes as a major fund in govt and enterprise?

~Total assets, liabilities, revenues, or expenditures (expenses) amount for at lease 10% of that item for all funds in the same category, govt’l or enterprise, added together, and
~Total assets, liabilities, revenues or expenditures(expenses) account for 5% of that item for all gov’t and enterprise funds added together

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Amortization of a intangible asset with a residualDe value

The amount to amortize is the cost less the residual value

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Statement of Changes in Stockholders equity includes the following:

~Column headings that identify individual stockholders equity accounts
~events changing stockholders equity accounts
~the body of the statement presented in terms of the dollar impact of various transactions and events
~the impact of the transactions on the number of shares of stock, if any
~ending balances that tie to the items presented in SE sections of the BS on the same dates

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Debt to Equity Ratio =

Debt to equity ratio = total debt / total SE

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The funded status of a define benefit pension plan for a company should be reported in the

BS/Statement of financial position

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How are expenses reported in NFP

As decreases to unrestricted net assets

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How are receivables reported using Cost, Equity and Acquisition Method?

Cost = Separately
Equity = Separately
Acquisition = Would require elimination of the receivable as an intercompany item

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How does IFRS account for Inventories?

Lower of cost or NRV. If NRV falls below cost then inventory must be written down. If NRV increases back up above cost, then a recovery of writedown must occur, and the inventory must be written back up to the cost, which is not the lower of cost and NRV. **Replacement cost is not used in this procedure

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Where should these items be found on the BS?

Idle Machinery
Cash Surrender Value of life insurance
Marketable equity investments
Treasury stock

Assets
Assets
Assets
SE

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Difference in footnote disclosure

IFRS requires more footnote disclosure than GAAP

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Regulation S-K ?

Regulation S-X?

Regulation S-K contains the instructions for filing the nonfinancial statement forms required by the SEC.

Regulation S-X contains information regarding the financial statements that must be submitted to the SEC. There are no such documents as the “SEC Form Guide” or “Regulation 10-K-I (Instructions).”

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J/E for Stock Dividend

DR: RE
CR: CS
CR: APIC

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In a single step income statement which of theses are included in total revenues?
~SAles
~Purchase Discounts
~Recovery of accts written off

Only Sales

Purchase discounts are shown as deductions in the expense section.

Write off have no effect on IS since cash is increased and allowance for doubtful accts is decreased

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J/E to record payment of cash dividend

DR: Cash dividend payable
C:R Cash

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When an entity undertakes an obligation to service financial assets (collecting principal, interest, etc) it should recognize:

FASB ASC 860-50-20 and 50-25-1 require recognition and measurement of servicing assets (total servicing revenue is expected to exceed total servicing costs) or servicing liabilities (total servicing costs are expected to exceed total servicing revenues) when an entity undertakes an obligation to service financial assets.

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Are contingent gains accrued?

no-

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RE Base formula for Acquisition

Beg RE
+Income
-Dividends
=End RE

In a single step income statement which of theses are included in total revenues?
~SAles
~Purchase Discounts
~Recovery of accts written off

Only Sales

Purchase discounts are shown as deductions in the expense section.

Write off have no effect on IS since cash is increased and allowance for doubtful accts is decreased

Derived Tax Revenues?

Result from taxes assessed on exchange transactions. The tax on hotel charges fits this description. Other examples are sales tax, personal and corporate taxes, and motor fuel tax.

What is antidilutive?

Exercise price exceeds the market price of the stock

What are included in program revenues for Govt Wide Statement of Activities

S - Charges for Services O - Operating grants & contributions C - Capital grants and contributions

Secured Borrowing

Financial assets that does not qualify for a sale then it is classified as a secured borrowing with a pledge of collateral

How are billings for transportation services provided to other govt'l units are recorded by the internal service fund as:

Operating Revenues

Required disclosures of reportable segments?

~Revenues from external customers ~Revenues from transactions with other operating segments of the same enterprise ~Interest revenue ~Interest expense ~Depreciation, depletion, and amortization expense ~Unusual items as described in FASB ASC 225-20 ~Equity in the net income of investees accounted for by the equity method ~Income tax expense or benefit ~Extraordinary items ~Significant noncash items other than depreciation, depletion, and amortization expense Rent expense is not one of the items that require disclosure.

Under IFRS, which of the following measurements is allowed to estimate and report the liability for the cost of settling a lawsuit?

When a range of amounts that may be lost in a lawsuit are established, the best number in the range must be chosen to accrue. The chosen amount must always be discounted to present value.

When does off-balance sheet risk happen?

occurs when the amount of an accounting loss exceeds the amount of the associated asset or liability recorded on the balance sheet.

Disclosure requirements for permanent deferred tax differences

None--- not required

Debt to equity formula

total liabilities / total shareholders equity

Any FV measurement should assume that the transaction to sell the asset or transfer the liability occurs in which market?

The principal market for the asset or liability

Level 2 input for FV

1. Quoted prices for similar assets or liab in active markets 2. Quoted prices for identical or similar a & l in markets that are not active 3. Inputs other than quoted prices that are observable for the asset or liab 4. Market-corroborated inputs

What is different about the IFRS and GAAP BS

IFRS statements may present property plant and equipment first in the BS

What are liquidating dividends?

Occur when dividends to shareholders exceed RE. Dividends in excess of RE would be charged (debited) first to APIC and then to common or preferred stock (as appropriate). Liquidating dividends reduce total PIC

FV -- Market Aprroach

The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business)

FV- Income Approach

The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted).

FV -- Cost Approach

The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (often referred to as current replacement cost).

What is financial capital concept?

The effects of price changes on assets held and liab owned are recognized as "holding gains and losses" and included in return on capital

What is physical capital concept?

The effect of price changes are recognized as "capital maintenance adjustments" as a separate element of equity and would not be included in return on capital

What is cash surrender value?

s the amount available in cash upon voluntary termination of a life insurance policy by its owner before it becomes payable by death or maturity.

AR Turnover in Days

Avg Net Receivables / (Net credit sales/365)

A NFP vol health and welfare entity should report a contribution for the construction of a new building as CF from which category

Financing Activity A contribution to a NFP restricted to LT purposes like construction shall be reported as a CF from financing activities. CF received from investment income restricted by donor stipulation to the same purposes also are reported as financing activities, not as operating

What are program service cost for NFP?

Cost incurred in carrying out its primary missions, these expenses are subclassified by function

What are supporting service expenses for NFP?

Management and general expenses and Fund-raising expenses

What is the maximum number of reportable segments?

When do dividends in arrears become an accrued liability?

Not until they are declared. Thus, the reporting of dividends in arrears is achieve through disclosure either on the face of the BS or in the notes

When is compensation recognized under the stock option plan

Compensation is recognized over the service period (the period the employee performs the service), and this is generally the vesting period

The effective interest rate for a loan restructured in troubled debt restructuring is based on:

the original contractual rate

Is Depreciation & Propreitors Draw included in the IS of a proprietorship?

Depreciation is included Draw is not