Becker FAR

Question 1

What are the authoritative literature included in the codification?

Answer 1

FEDPRIA, Financial Accounting Standards Board, Emerging issues Task Force Abstracts and Topic D, Derivative Implementation Group issues, Accounting Principles Board opinions, Accounting research bulletins, Accounting interpretations, American Institute of Certified Public Accountants

Question 2

What are the elements of financial statements?

Answer 2

REGL ALE needs ID, Revenues, Expenses, Gains, Losses (impairement/writedown), Assets, Liabilities, Equity, Investments by owners, Distributions by owners

Question 3

What is the presentation of an income and retained earnings statement?

Answer 3

IDEA, Income (or loss) from continuing operations, Income (or loss) from discounted operations, extraordinary items, Cumulative effect of change in accounting principle

Question 4

What is included in Other comprehensive income?

Answer 4

PUFER, Pension adjustments, Unrealized gains and losses (AFS securities), Foreign currency items, Effective portion cash flow hedges, Revaluation surplus (IFRS only)

Question 5

What is the equity method account analysis?

Answer 5

BASE, Beginning balance, Add: Investors share of investee earning, Subtract: Investors share of investees dividends, Ending balance

Question 6

How does a corporation adjust the acquisition method during consolidation?

Answer 6

CAR IN BIG, Common Stock, APIC, Retained earnings are eliminated, Investment in subsidiary is eliminated, Noncontrolling interest is created, Balance sheet of subsidiary is adjusted to fair value, Identifiable intangible assets of the subsidiary are recorded at their fair value, Goodwill (or Gain) is required

Question 7

How do you calculate accounts receivable?

Answer 7

Beginning balance, +Credit sales, -Writeoffs, -Convert to note, -Cash collected, =Ending balance

Question 8

How do you calculate market ceiling (NRV)?

Answer 8

Selling price, -Costs of completion, =Market Ceiling (NRV)

Question 9

How do you calculate Market Floor?

Answer 9

Market Ceiling (NRV), -Normal Profit (profit margin), = Market Floor

Question 10

What do you use to compute depletion on land?

Answer 10

REAL property, Residual value (subtract), Extraction/development cost, Anticipated restoration cost, Land purchase price

Question 11

What is the conditions to capitalize a capital lease (US GAAP)?

Answer 11

OWNS, Ownership transfers at end of lease, Written option for bargain purchase, Ninety percent of leased property, Seventy five percent or more of asset economic life is being committed in lease term, Only 1 is required

Question 12

What are the finance lease criteria (IFRS)?

Answer 12

OWES FACS, Ownership, Written bargain, Economic life, Substantially all of the fair value, Fluctuation, Ability to continue the lease, Cancel the lease, Specialized nature

Question 13

What are the sales type/direct financing type criteria (US GAAP)?

Answer 13

LUC, Lessee owns the leased property, Uncertainties do not exist regarding any unreimbursable costs to be incurred, Collectability of the lease payments is reasonably predictable, Must have all three

Question 14

How do you calculate Net periodic pension costs?

Answer 14

SIRAGE, Current service cost, +Interest cost, - Return on Plan assets, +Amortization of prior service cost, -Gains and +Losses, +Amortization of existing net obligation or net asset, =Net periodic pension cost

Question 15

How do you calculate Basic EPS?

Answer 15

Basic EPS=, Income available to common shareholders (NI - PD)/, Weighted average number of common shares outstanding

Question 16

How do you calculate Weighted average number of common shares outstanding (WACSO)?

Answer 16

Shares outstanding at the beginning of the period, +Shares sold during the period (on a time weighted basis), -Shares reacquired during the period (on a time weighted basis), +Stock dividends and stock splits (retroactively adjusted), -Reverse stock splits (retroactively adjusted), =Weighted average number of common shares outstanding for the entire period (WACSO)

Question 17

How do you calculate Diluted EPS?

Answer 17

Diluted EPS=, Income available to the common stock shareholder, +Interest on dilutive securities, /Weighted average number of common shares

Question 18

What are in the governmental funds?

Answer 18

GRASPP, General fund, Special revenue funds, Debt service funds, Capital projects funds, Permanent fund

Question 19

What are in the proprietary funds?

Answer 19

SE, Internal Service funds, Enterprise funds

Question 20

What are in the Fiduciary (trust) funds?

Answer 20

PAPI, Pension (and other employee benefit) trust funds, Agency trust funds, Private purpose trust funds, Investment trust funds

Question 21

What is the measurement focus and accrual basis for fiduciary and proprietary funds?

Answer 21

SPACE, SE, PAPI, Accrual, Carry Fixed assets & Long term debt, Economic resources measurement focus

Question 22

What are the constraints for the governmental fund balances?

Answer 22

NU CAR, Non-spendable fund balance, Restricted fund balance, Committed fund balance, Assigned fund balance, Unassigned Fund Balance

Question 23

The governmental funds use modified accrual accounting for what accounts?

Answer 23

BAE, Budget, Activity, Encumbrances

Question 24

Net position in proprietary funds displays three categories?

Answer 24

RUN, Restricted, Unrestricted, Net investment

Question 25

Primary government entities that meet the following criteria:

Answer 25

SELF, Separately elected governing body, Legally separate, Fiscally independent of other state and local governments

Question 26

What are the program revenue category types?

Answer 26

SOC, Charges for services, Operating grants and contributions, Capital grants and contributions

Question 27

How to prepare the reconcliation for the balance sheet?

Answer 27

GALS BARE, Graspp fund balance, +Assets (noncurrent), -Liabilities (noncurrent), +Service (internal) fund net position, Basis of accounting, Accrued, Revenues and, Expenses

Question 28

How to prepare the reconcliation for the changes in fund balance (statement of revenues, expenditures)?

Answer 28

GOES BARE, Graspp net change in fund balance, -Other financing sources, +Expenditure- capital outlay (net of depreciation), +Service (internal) fund net income, Basis of accounting, Additional accrued, Revenues and, Expenses

Question 29

What are the components of net assets of not-for-profit organizations?

Answer 29

PUT, Permanently restricted net assets, Unrestricted Net assets, Temporarily restricted net assets

Question 30

How are contributions of donated services recognized?

Answer 30

SOME, Specialized skills are required and possessed by the donor, Otherwise needed by the organization, Measurable, Easily (at fair value)

Question 31

Disclosure should be made for guarantee type remote loss contingencies, such as:

Answer 31

DOG, Debts of others guaranteed (officers/related parties), Obligations of commercial banks under standby letters of credit, Guarantees to repurchase receivables (or related property) that have been sold

Question 32

Step 1: Compute gross profit of completed contract?

Answer 32

Contract price (Estimated total cost) =Gross profit

Question 33

Step 2: Compute percentage of completion

Answer 33

Total cost to date/Total estimated cost of contract

Question 34

Step 3: Compute gross profit earned (profit to date)

Answer 34

Step 1 x Step 2 = Profit to date Step 1) Contract price = gross profit Step 2) Total cost to date/Total estimated cost of contract

Question 35

Step 4: Compute gross profit earned for current year

Answer 35

Profit to date at current FYE (Profit to date at beginning of period) = Current year to date gross profit

Question 36

How do you calculate gross profit?

Answer 36

Sales - Cost of goods sold = Gross Profit

Question 37

How do you calculate gross profit percentage?

Answer 37

Gross Profit/Sales Price = Gross Profit percentage

Question 38

How do you calculate earned gross profit?

Answer 38

Cash collections x gross profit percentage = Earned gross profit

Question 39

How do you calculate deferred gross profit?

Answer 39

Installment receivable x gross profit percentage = Deferred gross profit

Question 40

How do calculate Cost of Goods Sold?

Answer 40

Beginning inventory + Purchases = Cost of Goods Available for Sale - Ending Inventory = Cost of Goods Sold