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Flashcards in 9A Wrong Answers Deck (25):
0

According to SFAC 6, realization is the process of...

Converting noncash resources and rights into money through
Sale of assets for cash or claims to cash

1

Realization occurs...

At the time of sale rather than when cash is collected

2

Per, SFAC 6, the major difference between financial and physical capital maintenance is related to...

The effects of price changes on assets held and liabilities owed
During the period

3

The financial capital concept is applied in...

Current GAAP

4

In the financial capital concept, the effects of the price changes are considered...

"Holding gains and losses" and are included in computing return
On capital

5

Comprehensive income is described in SFAC 5 as...

Change in equity of business enterprise during period from
Transactions and other events and circumstances from nonowner
Sources

6

Comprehensive income is a measure of...

Return on financial capital

7

Physical capital maintenance seeks to measure the...

Effects of price changes that aren't currently captured under
GAAP

EX. Replacement costs of nonmonetary assets

8

According to SFAC 7, The most relevant measure of a liability always reflects...

The credit standing of an entity obligated to pay

9

Those who hold the entity's obligations as assets incorporate the...

Entity's credit standing in determining prices they're willing to pay

10

The Codification provides guidance on the determination of gain or loss on disposal of...

2) according to this guidance, such determination should be based on...

A component of business

2) estimates of net realizable value

11

Historical cost, current reproduction and replacement costs are not appropriate measurement bases for assets (under SFAC 6) once an entity has decided to...

Discontinue its operations because these amounts don't reflect
Entity's probable future benefit

12

IASB element defined as increases in economic benefits in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity. What is this IASB element?

Income

13

The IASB definition of income includes both...

Revenues and gains

14

If the outcome of rendering services can't be measured reliably, what revenue recognition method does IFRS require?

Cost recovery method

15

Under IFRS, the percentage completion method is used when...

Reliable estimates can be made

16

The first step within the IFRS hierarchy of guidance to which management refers when selecting accounting policies?

The highest level in the hierarchy is...

An IFRS standard applicable to the transaction

17

An increase in net purchases is equivalent to...

An increase in accounts payable

18

Revenues from service contracts should be recognized on...

A pro rata basis over term of contract

19

Recognizing revenues of service contracts on a pro rata basis over the term of the contract allocates the contract revenues to...

The periods in which they are earned

20

Since sale of a service contract does not culminate in the completion of the earnings process (ex. Dose not represent the seller's performance of the contract) payments received for such a contract should be recorded initially in...

Deferred revenue

21

Initial franchise fee of $150,000
$60,000 was received upon signing the balance and is non refundable
There are 3 annual payments of $30,000 each, beginning December 31 year 2 that have a present value of $72,000.

What is the journal entry for the Franchisor?

Cash. 60,000
N/R. 90,000
Discount on N/R. 18,000
Franchise Revenue. 60,000
Unearned franchise fees. 72,000

22

Performance measure concerned primarily with cash-to-cash cycles

Earnings

23

Accrual entries vs. Deferral adjusting entries

Accruals: receivables and payables

Deferrals: depreciation, prepaid items, unearned revenue

24

Changes in market values of investments in marketable equity securities classified as available for sale securities are included in...

2) what are they excluded from?

Included in comprehensive income

2) excluded from earnings until realized