Flashcards in Deck 21 Deck (20):
Purchase method vs consumption method of inventory (Gov't accounting)
Purchase method: record asset as expenditure when purchased; Consumption method: record asset as a current asset when purchased
How is debt recorded under governmental funds?
"Other financing sources"
Changes in values of derivatives used for hedging activities are reported as either:
Deferred outflows or inflows of resources
Deferred outflows vs deferred inflows
Outflow: Consumption of net assets and have a positive impact on net position; Inflow: Acquisition of net assets, negative impact on net position
Debt covenants should be classified as what kind of fund balance?
Assets associated with unavailable revenues should be recorded by crediting:
Deferred inflow of resources
Items that are "unusual" and/or infrequent should be reported where?
Separately as a component of income from continuing operations
Losses from discontinued operations should be reported in what period?
The interim period incurred
When is revenue recognized for a generic product?
Recognize revenue based on shipments (recognize revenue based on production for custom products)
Under the installment method, installment receivables =
Deferred gross profit/gross profit percentage
Installment receivables =
Sales minus cash collections (gross profit/GP %)
Under the installment method, cash collections =
Gross profit/GP percentage
Under current cost accounting, holding gain on inventory =
Excess replacement cost over original purchase price
Royalty expense for the year equals what amount
The amount "earned"
Ending royalty receivable =
beg. balance + royalty revenue - collections
Rule for capitalization of interest (F4)
Capitalize the lower amount of avoidable interest or actual interest
Avoidable interest =
Average accumulated expenditures x interest rate on specific borrowing
Title passes when received by the buyer. Packaging, shipping, and handling are all costs of the seller
Ending inventory under the weighted average method =
weighted average cost per unit * (total units - units sold)