Intro

Question 1

quality characteristic

Answer 1

• relevance: Predictive value, Confirming value

- Faithful representation: Free from error,neutrality, completeness

Question 2

Enhancing qualitative characteristic CUT-V

Answer 2

• comparability
• understandability
• timeliness
• verifiability

Question 3

Measure an item at fair value. 3 approach

Answer 3

• Market approach:using information generated by market transaction
• Income approach:analyzing future amount in the form of revenue, cost saving, earning
• Cost approach:measuring the cost that would be incurred to replace

Question 4

Fair value

Answer 4

the price that would be received to sell an asset or paid to transfer a liability

Question 5

impairment loss, 2 steps

Answer 5

-determine whether an investment is impaired
(FV is less than its cost)
-evaluate whether an impairment is other than temporary

Question 6

input for fair value , 3 levels

Answer 6

1-most reliable, involve the use of observable data from actual market
2-involve the use of observable data from actual market, market not active
3-unobservable data, based on management’s judgement

Question 7

accrued accounting

Answer 7

revenue/gain are recognize when

• earned:earning process is complete
• realizable:collect cash or. a claim to cash

Question 8

revenue recognition

Answer 8

• a binding arrangement exist
• service rendered or delivery has occurred
• fixed or determine price exist
• collection is reasonably assured

Question 9

Balance sheet

Answer 9

-statement of position, report the effect of transactions at a point in time. Consists of assets, liabilities, and stockholder equity

Question 10

Available for sale securities,AVF

Answer 10

• part of OCI in stockholder equity
• current /non current
• record at cost, carried at FMV
• unrealized gain/loss appear on B/S OCI
• realize in I/S

Question 11

GAAP income statement

ON-TIDe-N-OC

Answer 11

O-operating income
N-non-operating
T-tax
I-income from continue operation
De-discontinue operation
N-net income
O-OCI
C-comprehensive income

Question 12

investment securities

Answer 12

0-20. cost method
20-50 equity
50+. consolidation

Question 13

equity method

Answer 13

• as the investee earns money, its increase investor’s books based on the % owns
• dividend received are reduction of investment

Question 14

cost method

Answer 14

• no significant influence
• market value exist, use market
• no market, use cost method

Question 15

equity to cost

Answer 15

prospective, use the cost method going forward

Question 16

cost to equity

Answer 16

retrospective
-apply equity method, but only for the percentage you previously owned, this required a prior period adjustment to reported income

Question 17

comprehensive income, DENT

Answer 17

D-derivative hedge cash flow
E-excess adjustment of PBO and FV
N-net unrealized gain/loss on AVS
T-translation adjustment for foreign currency

Question 18

Full set of financial statement

Answer 18

• statement of position, balance sheet
• statement of earning, income statement
• statement of cash flow
• statement of changes in owner equity

Question 19

Trading security classification

Answer 19

operating

Question 20

available for sale classification, HTM

Answer 20

investing activity