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Flashcards in Comp. Reveiw Questions Deck (19):
1

Walk through the layout of a mutli-step income statement

Net Sales
(less) COGS
= Gross Profit

Less SGA Expenses
= Operating Income

Other income / Expense
= Income from contin. Op (if there is only discontinued operations if not, then its just income before income tax)

Income tax expense
income b4 Disco (net of tax)

Net Income ___

2

How should the effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate be reported

As a component of income from continuing operations... reported prospectively as a change in estimate

3

To be a significant enough to report on, a segment must be at least 10% of

1. combined revenues
2. Operating profit
3. Identifiable assets

4

When should a long-lived asset be tested for recoverability

when events or circumstances indicate the carrying amount may not be recoverable

5

Which disclosures are required under IFRS or GAPP:

1) statement of compliance with applicable accounting principles
2) Disclosure of all significant accounting polices
3) Disclosure of judgements made in the preparation of the FS

1) IFRS
2) IFRS & GAAP
3) IFRS

6

Are start up costs including organizations costs expensed our capitalized

Expensed as incurred without exception

7

For a patent what is expensed vs Capitalized:
-price
- taxes
-research
-legal costs
- training production staff on use of patent
- admin salaries

- only capitalize the price, tax, and legal fees

8

When do you use the lower of cost or NRV for inventory

or the Lower of cost and market

1) - FIFO / WA (IFRS and GAAP)

2) LIFO / Retail (only GAAP)

9

how do you find the carrying amount of the bond (add what two things)

beginning carrying amount (or ending PY)+ amortized discount of current year

10

FX conversion gains associated with translations of financial statements are reported where

AOCI

11

What is functional currency

Functional currency is the currency of the primary economic environment in which the entity operates, it is usually the local currency but not always

12

What are the qualitative enhancing characteristics of data

Timeliness, understandability, and comparability and verifiability are used to enhance the usefulness of information that is relevant and faithfully represented

13

Useful information must exhibit the fundamental qualitative characteristics of

Faithful representation and relevance

14

What are the components of Relevant information

Materiality, predictive value, and confirming value

15

What are the fundamental qualitative characteristics of useful information and their components

Relevance (PCM): Predictive Value, Confirmatory Value, Materiality

Reliable (faithful) Representation (CNM) Complete, Neutral, Free from Error (Material)

16

What are the enhancing Qualitative Characteristics of useful information

(CUTV): Comparability, Understandability, timeliness, verifiability

**Note it is all the "ilities", beside timeliness

17

The aggregate amount of payments to be made on unconditional purchase obligations should be disclosed for how long following the recent BS

5 years

18

What is allowed to elect the FV option

Financial Assets (debt, securities, etc) and Liabilities (notes payable)

19

What is not allowed to Elect the FV option

Investments in subs, pension benefits, assets / liab under leases