All the goodies Flashcards

Question

Debt Service Fund

Answer 1

Account for the accumulation of resources for, and payment of, principal and interest for general debt for gov funds. ## Footnote Not for fiduciary funds or proprietary funds

Answer 2

unusual and infrequent

Answer 3

Revenues that are legally restricted to expenditure for specified purposes.

Answer 4

Recorded when they become due and payable, not the general rule of "measurable"

Answer 5

Reported using economic resource measurement focus. Showing long term liabilities. Displays gov and enterprise only, not fiduciary.

Answer 6

1. Net investment in capital assets 2. Restricted 3. Unrestricted

Answer 7

Agency trans., cash contributions without donor restrictions, program income, investment income (Div/Int) ## Footnote General fund accounts for all financial resources unless required to be in another fund.

Answer 8

Includes basic financial statements and supplementary info. * Basic = gov-wide fin stmts, fund fin stmts, notes to the financial stmts. * Supplementary = MD&A, a few other things

Answer 9

* Separately * Elected governing Body * Legally separate entity * Financially independent status ## Footnote Blended: Not separate Discrete: (separate column) fail blended criteria

Answer 10

* + Capital assets net of * (-) Accumulated depreciation * (-) Non-current liabilities * + Service (internal service fund) net position | Reconciliation between fund and fov wide financial statements ## Footnote Non-current assets and liabilities are excluded in funds but still need to be on gov wide presentation.

Answer 11

Change in gov fund balances * C: Capital outlay (+) * P: Principal payments LT debt (+) * A: Asset disposals * S: Sources (other financiing) (-) * () * R: Revenue - sales tax (+) * I: Interest expense (-) * DE: Depreciation expense (-) * S: Internal service fund

Answer 12

* Budget comparison schedules - general and major special revenue funds * Schedules include: original and final budget, actual inflows, outflows, and balances * Variances are optional

Answer 13

Total compensation cost = market price of the share on date of grant x number of restricted shares awarded. | Compensation is expensed (allocated) over the period of service.

Answer 14

(Net Income - Preferred dividends) / (WACSO = Total shares x period outstanding)

Answer 15

1. Ownership - transfers at end of lease 2. Written Option - purchase reasonably certain 3. Net Pesent Value - lease payments is most of the asset value (90%) 4. Economic Life - lease term major part of UL (75%) 5. Specialized - no alternative use to lessor No to all = Operating No to any = Operating | Yes to any = Finance; No to any = Operating ## Footnote Finance Lease/ Sales-Type Lease or... Operating/ Operating

Answer 16

Date the underlying asset is made available to the lessee for use | Lease payment start date does not matter

Answer 17

Minimum lease payments PLUS any residual value

Answer 18

Lessee should use the rate implicit to discount cash flows. Annuity = periodic payment x PV of ordinary annuity. ## Footnote I dont think the incremental borrowing rate matters in anything...

Answer 19

* Beginning of period = PV of an annuity due (generally) * End of period = PC of an annuity (ordinaty/arrears) ## Footnote Initial Entry - DR: ROU CR: Lease Liability Subsequent Entries - DR: Lease expense CR: Cash/lease liability DR: Lease Liability CR: Accumulated Amortization - ROU asset

Answer 20

Amortized beginning on the commencement date using straight line.

Answer 21

1. One or more underlyings, and one or more notional amounts or payment provisions or both 2. Requires no initial investment or one that is smaller than alternatives 3. Terms require or permit a settlement | Includes: Futures, forwards, options, swaps ## Footnote Financial instrument that derives value from the value of some other instrument

Answer 22

Currency of the primary economic environment in which the entity operates. Usually local currency or reporting currency. ## Footnote Capital accounts are translated using functional currency

Answer 23

Must be reported on a straight line basis. When they fluctuate, the average rate needs to be calculated. ## Footnote Watch the dates, if lease begins in June... June 1 to December 31 is SEVEN months

Answer 24

Amortize over the life of the improvements or the remaining life of the lease, whichever is shorter.

Answer 25

Components * Payment * Interest * Decline in liability | Capitalize using implicit rate

Answer 26

Finance leases should be recorded as both an asset and a liability at the PV of minimum lease pmts. The asset is depreciated. The liability is amortized using the interest method where the payment is allocated between principal and interest and reduced by the principal reduction. The liability is segregated between current and non current where the reduction each year = the current liability at the end of prior year.

Answer 27

Lessee amortizes the asset over the economic life if there is a purchase option or when lessee takes ownership at the end of the lease term.

Answer 28

Treated as if it happened ay the beginning of year.

Answer 29

Book doesnt make any fucking sense on this.

Answer 30

Inter-period tax allocation is to recognize the amount of current and future tax related to events that have been recognized in financial accounting income. | FASB/GAAP vs IRS Code ## Footnote Asset and liability approach (balance sheet approach)

Answer 31

When lease expense starts. Doesnt matter when they start paying, what matters is when the underlying asset is made available.

Answer 32

The lessee shall record an operating lease as lease expense using the straight line basis. Variable payments are calculated for the PV of the lease liability and expensed. There is no separate interest component.

Answer 33

Just cuz it is recorded, doesnt mean it is always right. Need to look for context clues. This includes adjusting entries.

Answer 34

If the terms attribute all or a portion of future benefits to service greater than one year, the cost (payment) is recognized over the required period of service.

Answer 35

Can use equity (common stock) as a way to refinance and it does not hit equity account. It hits the liability accounts.

Answer 36

Not reflected in the financial statements, but can disclose as a note. Record when realized.

Answer 37

Anticipate all losses but not gains.

Answer 38

Accrue if reasonable estimate can be made and "probable". If only a range is provided, use the minimum value. | If Possible, just disclose ## Footnote Could be a subsequent event and therefore be included assuming the fin stmts have not been sent out.

Answer 39

Total Payment = principal and intrest multiplied by the present value of 1. ## Footnote PV = Future amount x PV Factor

Answer 40

Transactions that result in identical periodic payments.

Answer 41

Payments are made at the end of each period.

Answer 42

Payments occur at the beginning of each period.

Answer 43

Reported at the present value of future cash flows.

Answer 44

Current Maturities of Long term debt in the balance sheet should include amounts due and payable within 12 months of the balance sheet date. ## Footnote Includes term notes due within one year and principal payments due in one year. Anything held to term more than 1 year is not included.

Answer 45

The fair value of the warrant are separated from the issue price of bonds, i.e. stand-alone value.

Answer 46

Mature in installments. Opposite of term bonds.

Answer 47

Unsecured corporate bonds, I think they can be either term or serial.

Answer 48

GAAP Interest expense = carrying value at beginning of the period X effective periodic interest rate.

Answer 49

Stated interest = Amount stated on bond. | Not the same as GAAP Interest Expense.

Answer 50

SHown on the balance sheet net of unamortized discount. | (Carrying amount)

Answer 51

Bond issue price is the sum of the pv of the maturity value (using principal) and the interest payment annuity. | So two calculations: PV of maturity value and interest annuity.

Answer 52

The prevailing market rate of interest is used to discount both the principal and annuity. ## Footnote Remember, the rates usually need to be divided by two to refelct how the annual interest payments are made (semi annually).

Answer 53

Bonda payable is recorded at the face amont and the discount is debited to "discount on bonds payable and the remainder is cash. ## Footnote DR: Cash 49k DR: Discount on bonds payable 1k CR: Bonds paable 50k

Answer 54

Amortization causes the carrying value to approach the face falue. | Discount amort. inc. liability; Premium amort. dec. liability

Answer 55

Amortization of Premium is the difference between interest expense and cash payment. | Reduces the carrying value

Answer 56

Interest expense = Carrying value x market % | CV = face +/- premium/discount

Answer 57

Cash Payment = Face Value x coupon %

Answer 58

This makes complete sense now. If you have a premium you need to recognize the cost in some way. This is done by taking the difference between what you expense as interest and what you actually pay in cash. That difference is the amortized portion of the remaining premium. The remaining premium is unamortized so thats why you reduce that.

Answer 59

Not included in determining net income for the period but are disclosed and accumulated as a component of OCI in consolidated equity.

Answer 60

Included in income from continuing operations.

Answer 61

All majority owned subsidiaries to have one management and one economic entity. Consolidate when a parent-subsidiary relationship is formed (typically when an entity has control or more than 50% of the voting stock) ## Footnote Do not consolidate if in bankruptcy; consolidate in a vertical chain (sub is parent over another entity)

Answer 62

1. Consolidation - control or over 50% of voting stock 2. Equity - 20-50% ownership or significant influence

Answer 63

Carrying mount of REPORTING UNIT compared with the fari value of REPORTING UNIT. If CV > FV, there is an impairment loss. Loss equals the difference but cannot exceed goodwill currently reflected on the balance sheet.

Answer 64

Eliminate subsidiary equity. Add assets and liabilities to books at fari value. ## Footnote Acquisition costs are expensed as incurred.

Answer 65

Beginning NCI + NCI share of sub net income - NCI share of sub dividends = ending NCI ## Footnote Cash dividend decreases NCI and no effect on RE of parent (entry is eliminated in consolidations)

Answer 66

Any company that is > 50% owned should be included in consolidated financial statements. | All of it, not just %owned of the liabilities

Answer 67

As date of acquisition, the consolidated equity will be equal to the parent company's equity plus the FV of any NCI. Subsidiary equity accounts are eliminated.

Answer 68

Subsidiary equity accounts are eliminated in consolidations.

Answer 69

* Equity Method: Investor exercises significant inflence over an investee * Consolidated Method: Investor ownership has control * Fair Value Method: Neither significant influence or control

Answer 70

No accounting necessary. Any goodwill is ignored under the equity method. The entire investment is subject to an impariment test.

Answer 71

Questions are mostly calculating the investment and asking how situations impact the investment and financial statements. Can be compared against fair value.

Answer 72

Direct and Indirect materials and labor, insurance/ other product costs (inventoriable costs). ## Footnote Advertising is not included

Answer 73

Include any cost required to get an inventory item in a state where it is ready to be sold.

Answer 74

While an agent (Consignee) will hold and sell goods on behalf of the consignor until the inventory is sold, the seller (consignor) will include in his inventory because title and risk of loss are retained by the consignor.

Answer 75

If the company has legal title, typically follows possession. Exceptions * In transit * Nonconforming * Consigned * Public Warehouse * Sales with mandatory Buyback * Installment

Answer 76

1. Cost 2. Lower of Cost or Market 3. Lower of Cost and NRV

Answer 77

The lower of cost and net realizable value principle may be applied to a single item, a category, or total inventory, provided that the method most clearly reflects periodic income. ## Footnote all inventory that is not costed using LIFO or the retail inventory method.

Answer 78

Net realizable value is an item' s net selling price less the costs to complete and dispose of the inventory. Net realizable value is the same as the" market ceiling" in the lower of cost or market method.

Answer 79

The lower of cost or market principle may be applied to a single item, a category, or total inventory, provided that the method most clearly reflects periodic income. ## Footnote Under U. S. GAAP, the lower of cost or market method is used when inventory is costed using LIFO or the retail inventory method.

Answer 80

Under U. S. GAAP, the term market in the phrase lower of cost or market generally means current replacement cost( whether by purchase or reproduction), provided the current replacement cost does not exceed net realizable value( the market ceiling) or fall below net realizable value reduced by normal profit margin( the market floor).

Answer 81

Market Value Under U. S. GAAP, * market value is the median( middle value) of an inventory item' s replacement cost, its market ceiling, and its market floor. * Replacement Cost Replacement cost is the cost to purchase the item of inventory as of the valuation date. * Market Ceiling Market ceiling is an item' s net selling price less the costs to complete and dispose( called the net realizable value). * Market Floor Market floor is the market ceiling less a normal profit margin.

Answer 82

* In periods of rising prices, the FIFO method results in: 1. the highest ending inventory, 2. the lowest costs of goods sold, and 3. the highest net income( i. e., current costs are not matched with current revenues). * The use of the LIFO method generally better matches expense against revenues because it matches current costs with current revenues; thus, LIFO eliminates holding gains and reduces net income during times of inflation. | RIsing Prices - LIFO = Lowest

Answer 83

1. Specific Identification 2. FIFO 3. LIFO 4. Weighted Average 5. Moving Average 6. Dollar Value LIFO

Answer 84

Rule: Capitalize all costs necessary to put a fixed asset in place, the required condition, at the proper time for its intended use. Rule: Capitalize costs that improve the quality, efficiency, or productive capacity of a fixed asset Interest capitalization: ends when asset is complete and ready for use.

Answer 85

Under US GAAP, nonmonetary echanges that have commercial substance are recorded using fair value. ## Footnote Gains and losses recognized immediately

Answer 86

Means a transaction that does not involve money changes the economic position of either party.

Answer 87

Obviously, intangible assets should be amortized over the lesser of the useful life or the legal life | Straight Line Method

Answer 88

Capitalized amounts include application and successful defense of patent. DEVELOPMENT COSTS are a direct expense.

Answer 89

Go with principal market. Principal market has the greatest activity. When there is none, choose most advantageous market by comparing net prices. Net price is quote - trans cost. QUOTE is used to measure

Answer 90

Assets contributed by partners to a partnership are valued at fair market value, net of related liabilities.

Answer 91

A segment is considered reportable if its reported revenue, including sales to unafilliated customers and intersegment sales, is 10% or more of the combined revenue (unaffiliated and intersegment) of all operating segments. | Size test

Answer 92

Non-GAAP presentations that include other bases of accounting such as cash basis and modified cash basis. Statement of cash receipts and disbursements. | Cash Basis mostly ## Footnote Example: Income Tax Basis - recognize events when recognized on the tax return.

Answer 93

Current assets - current liabilities

Answer 94

Current Assets / Current Liabilities ## Footnote Current assets: Cash, AR, Inventory

Answer 95

Cash + Net AR + Marketable Securities / CL ## Footnote Cash and equivalents

Answer 96

Sales/ Accounts Rec.

Answer 97

Ending Inv. / (COGS / 365)

Answer 98

Net Income / Net Sales

Answer 99

Reported as financing activities

Answer 100

The reconciliation of operating income to net cash provided by operations includes depreciation and changes in current assets and liabilities, but does not include adjustments for gains and losses because gains and losses and nonoperating items are not included in operating income.

Answer 101

10-Q: registered companies; unaudited; GAAP, MD&A, Disclosures Large Accel= >700M (10Q 40 days, 10K 60 days); Accel = >75M(10Q 75 days); Small = <75M

Answer 102

Change in accounant IS REPORTED ## Footnote I keep getting that one wrong over and over.

Answer 103

An entity should not recognize subsequent events in the financial statements that provide information about events that did not exist at the financial stmt date. Disclose if it happened before issue of financials but dont account for it if it was not forseeable. | Recognize/ Disclose what was known

Answer 104

* Determining Profitability * Value for Investment Purposes * Creditworthiness ## Footnote Performance for a period of time

Answer 105

Reports operating revenues and expenses separately from nonoperating. ## Footnote Enhances user information; just moves shit around.

Answer 106

* Interest * Sale of securities, fixed assets * | Auxilary Stuff

Answer 107

* Sales * Cost of Sales * SG&A Expense * Depreciation Expense

Answer 108

1. Freight Out 2. Salaries for Sales People 3. Commissions 4. Adertising

Answer 109

1. Officers Salaries and Insurance

Answer 110

Reported separetely as income from continuing operations. Ex: Large loss from Foreign currency translation, Union Strike, Gov seizure, Earthquake in unusual area. ## Footnote If an event is common, do not separately disclose.

Answer 111

Disclose measurment bases and accounting principles i.e. depreciation methods, rev rec issues, basis of consolidation, amortization. ## Footnote Does not include detailed dollar amounts or computations... supposed to be high level.

All the goodies Flashcards

(135 cards)