Day 4 - F2

Question 1

Equation: Days in inventory

Answer 1

Ending Inventory / COGS / 365

MCQ-02633

Question 2

Concert Cash to Accrual:

Answer 2

1. ADD Increases to CA
2. SUBTRACT Decreases to CA
3. ADD Decreases to CL
4. SUBTRACT Increases to CL

Note: Unearned Revenue = CL

MCQ-06929

Question 3

Define: Matching Principal

Answer 3

Recognize costs in the same period as service revenue is earned

MCQ-07527

Question 4

When sales people’s fixed salary is treated as an advance to their sales commission, how is the Accrued sales commission calculated?

Answer 4

Sales × Commission%

LESS: Fixed Salary Amount

MCQ-00623

Question 5

When is a subsequent event recognized on the BS?

Answer 5

A subsequent event happens after the BS date but before the FS are issued

A subsequent event will only be recognized on the FS of the condition existed as of the BS date

MCQ-16129