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FAR > Journal Entries > Flashcards

Journal Entries Flashcards

1
Q

When stock is exchanged for an asset in a non-cash transaction, how is the asset valued?

A

The fair value of the stock or the asset is used, whichever is more determinable. If the fair value of both the stock and asset are known, then it does not matter which is used. If the fair value of neither are known, then a consultant will need to assign a value

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2
Q

How are property dividends recorded?

A
  1. Increase or decrease the property so that it equals FMV
  2. Debit RE and Credit Dividends Payable (to record declaration)
  3. Debit Dividends Payable and Credit Property (to record payment of dividends)
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3
Q

How is a liquidating dividend recorded?

A

When declared, The amount in excess on a return on income is a return on investment. Retained Earnings is debited for the return on income, and APIC is debited for the return on investment

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4
Q

What is the entry for stock compensation on the grant date?

A

There is not an entry

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5
Q

What is the debit and credit for stock compensation?

A

Dr: Compensation Expense
Cr: Paid-in Capital Stock Options
*Keiso Page 916

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6
Q

What is the entry for restricted stock compensation on the grand date?

A 
DR: Unearned compensation
CR: C/S
CR: Paid in Capital
*It is then amortized in subsequent periods
Dr: Compensation Expense
Cr: Unearned Compensation
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7
Q

How is a write down of inventory recorded?

A

With a contra account.
Dr: Loss due to decline of inventory to market
Cr: Allowance to reduce inventory to market

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8
Q

When market prices drop on a future purchase committment, resulting in a loss, what is the JE to record the loss?

A

DR: Unrealized Holding Gain or Loss (Purchase Commitments)
CR: Estimated Liability on Purchase Commitments

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9
Q

What is the JE for a Sales-Leaseback Capital Lease that has a gain?

A 
For Sale:
DR: Cash
CR: Asset
CR: Deferred Gain
*Gain will be amortized

For Depreciation:
DR: Depreciation Expense
CR: Accumulated Depreciation

For Gain:
DR: Deferred Gain
CR: Depreciation Expense
*Reduces depreciation expense, and balance of Deferred Gain

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10
Q

What is the JE for a Sales-Leaseback Operating Lease that has a gain?

A 
For Sale:
DR: Cash
CR: Asset
CR: Deferred Gain
*Gain will be amortized

For Depreciation:
DR: Rent Expense
CR: Cash

For Gain:
DR: Deferred Gain
CR: Rent Expense
*Reduces rent expense, and balance of Deferred Gain

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11
Q

What is the journal entry for stock options that are granted?

A

DR: Deferred Compensation
CR: APIC Options Outstanding

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12
Q

What is the JE for when stock options are excercised?

A

DR: Cash
DR: APIC Options Outstanding
CR: C/S
CR: APIC: APIC-C/S

*APIC Options outstanding is an equity account, so the debit would be included in finding the net amount of equity increase as a result of the transaction.

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13
Q

What is the journal entry for a property dividend

A 
The property is issued at FMV.
Declared
DR: Retained Earnings
Cr: Property Dividends Payable
*Plug a gain or loss

Paid
Dr: Property Dividends Payable
Cr: THE Property

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14
Q

What is the journal entry for a liquidating dividend?

A

DR: RE
DR: APIC
CR: Dividends Payable

A liquidating dividend is unique in that it also reduces APIC. All dividends reduce Retained earnings.

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15
Q

What is the JE for a stock dividend?

A

DR: Retained Earnings
CR: C/S At Par
CR: APIC (Excess of Market over Par)

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16
Q

With the direct method, what is the JE to find cash receipts from sales?

A

Credit Sales, Debit or Credit for change in A/R, plug is Cash

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17
Q

With the direct method, what is the JE to find cash payments for inventory?

A

DR: COGS; DR or CR for change in Inventory and A/P, Plug is Cash

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18
Q

With the direct method, what is the JE to find cash payments for operating expenses?

A

DR: Operating Expense other then Depreciation; DR or Credit Change in Accrued Expenses; Plug is Cash

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19
Q

JE to fund a pension plan?

A

DR: Pension Expense
CR: Cash

*Prepaid Pension Cost, or Accrued Pension Cost are the plug

20
Q

What is the JE for a Note Receivable?

A

DR: N/R
CR: Discount on N/R
CR: Asset
CR: Gain

21
Q

What is the JE for payroll taxes?

A 
DR: Payroll Expense
DR: Payroll Tax Expense
CR: Accrued Payroll Taxes Liability
CR: Withholding Due to IRS (Employee Withholdings)
CR: Cash (Plug)
22
Q

What is the JE for a long-term contract when costs are incurred?

A

DR: CIP (Construction In Progress)
CR: Cash

23
Q

What is the JE for when profits are recognized on a long-term contract?

A

DR: CIP (Construction In Progress)
CR: Cash Income

24
Q

What is the JE to fund a pension plan?

A

DR: Pension Expense
CR: Cash

25
Q

What is the JE when PBO>FV of plan assets?

A

PBO>FV = Liability

DR: OCI Net of Tax (1-Tax Rate)
DR: Deferred Tax Asset (Tax Rate)
CR: Accrued Pension Cost Liability

26
Q

Under the cost method, what is the JE to purchase treasury stock?

A

DR: Treasury Stock
CR: Cash

27
Q

Under the cost method, what is the JE to resell Treasury Stock?

A

DR: Cash
CR: Treasury Stock (At original cost to repurchase)
*Plug will DR: APIC - TS/RE or CR: APIC - TS.

28
Q

Under the cost method, what is the JE to retire Stock?

A

DR: C/S
DR: APIC - C/S
CR: T/S (At original cost to repurchase)
CR: APIC - T/S

29
Q

Under the par method, what is the JE to purchase treasury stock?

A

DR: APIC - CS (Original bal)
DR: T/S (Par)
CR: Cash (Amount)
CR: APIC - T/S (Plug?)

30
Q

Under the par method, what is the JE to resell Treasury Stock?

A

DR: Cash
CR: T/S (Par)
CR: APIC - C/S (Plug)
*Like a new issuance, expect that T/S is credited

31
Q

Under the par method, what is the JE to retire Stock?

A

DR: C/S
CR: T/S

32
Q

What is the JE for an unrealized gain when marking up the security to FMV?

A

DR: Market Adjustment Trading Security
CR: Unrealized Gain (I/S)

33
Q

What is the JE for an unrealized loss when marking up the security to FMV?

A

DR: Unrealized loss (I/S)
CR: Market Adjustment Trading Security

34
Q

What is the JE for an unrealized gains for an AFS Security?

A

DR: Marketing Adjustment - AFS Security
CR: Unrealized Gain (OCI)

35
Q

What is the JE for an unrealized loss for an AFS Security?

A

DR: Unrealized Gain (OCI)
CR: Marketing Adjustment - AFS Security

36
Q

What is the JE for a realized loss on the sale of an AFS Security?

A

DR: Loss (I/S)
CR: Investment in AFS

37
Q

What is the JE to reclassify a AFS Security to a Trading Security?

A

DR or CR realized gain or loss on I/S
DR: Trading Security
CR: AFS Security

38
Q

What is the JE when reclassifying from AFS to HTM?

A

DR or CR Unrealized gain or loss to B/S as part of OCI
DR: HTM
CR: AFS

39
Q

What is the JE to reclass HTM to AFS?

A

DR or CR unrealized gain/loss to OCI
DR: AFS
CR: HTM

40
Q

What is the journal entry when there is deferred tax asset?

A

DR: Income Tax Expense (Plug)
DR: Deferred Tax Asset
CR: Current Tax Liability

41
Q

What is the journal entry when there is a deferred tax liability?

A

DR: Income Tax Expense (Plug)
CR: Deferred Tax Liability
CR: Current Tax Liability

42
Q

What is the journal entry when setting up a deferred tax asset valuation allowance?

A

DR: Income Tax Expense (Plug)
DR: Deferred Tax Asset
CR: Current Tax Liability
CR: Deferred Tax Asset Valuation Allowance

43
Q

When a deferred tax asset has been realized at the net amount expected, what is the JE to reverse a deferred tax asset valuation allowance?

A

DR: Deferred Tax Asset Valuation Allowance
CR: Deferred Tax Asset

44
Q

When a deferred tax asset is not realized at the net amount expected, what is the JE to reverse a deferred tax asset valuation allowance?

A

DR: Deferred Tax Asset Valuation Allowance

*Income Tax Expense (Plug) is reduced. Is considered a change in estimate.

45
Q

What is the JE for the retirement of Preferred Stock?

A

DR: Peferred (Par)
DR: APIC (For number of shares retired)
CR: APIC-Retirement of Stock (Plug)
CR: Cash

46
Q

When stock is retired with the Par Value Method, and the Debits Side (Treasury Stock, and APIC) do not balance with Cash, what is the plug to balance the JE?

A

Debit Retained Earnings

47
Q

When stock is retired with the Par Value Method, and the Credits Side do not balance with Debits (T/S and APIC) what is the plug to balance the JE?

A

Credit APIC - T/S

FAR (34 decks)

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