Test Definitions Flashcards
1
Q
Intangible Assets
A
Identifiable Non-monetary asset without any physical substance.
2
Q
What is the criteria to be met for an intangible asset:
A
PIRATE
Probable economic benefits
Intention to use
Cost is reliably measurable
Access to the necessary resources
Technical feasibility
3
Q
Finance Lease journal entries
A
Dr: Gross investment in lease
Cr: Asset
Cr: UNEARNED FINANCE INCOME
Dr: Bank
Cr: Gross Investment in lease pmt amount
Dr: Unearned finance income
Cr: Finance Income (pm 1 = 1 pm 2 = 1)
SOPL
Other income (pmt)
Finance income (int)
SOFP
Net investment in lease ()
4
Q
Operating Lease Journal entries
A
Dr: Bank
Cr: Operating Lease Liability
Dr: operating lease liability
Cr: lease income (pmt)
Still need to depreciate the ppe as a disposal is not taking place
