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Flashcards in 20B Wrong Answers Deck (7):
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How do you calculate a third quarter income tax provision (expense) in an interim statement, when tax rates were 30% in the 1st and 2nd quarter and 35% in the 3rd quarter?

(Total income from all 3 quarters x 35%)
- (income from 1st + 2nd quarters x30%)

1

Planned volume variance that is expected to be absorbed by the end of the fiscal year should be...

Deferred on interim reporting dates whether favorable or unfavorable

2

Inventory losses from market declines should not be...

Deferred beyond the interim period in which the loss occurs

3

If the market decline (in inventory) for interim reporting is considered to be temporary and will be recovered by year end...

No loss needs to be recognized

4

In the fourth quarter when a loss on inventory has not recovered, the loss is considered...

Permanent and should be recognized

5

The inventory loss is not recorded in...

The period of temporary decline, only in the period when the loss is
Considered permanent

6

A decline in inventory market price expected to be other than temporary should be...

2) a subsequent recovery in market value should be....

Recognized in period of decline

2) recognized as cost recovery in period of increase, but never
Above original cost