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Flashcards in Deck 27 Deck (21):
1

What kind of transaction qualifies as a discontinued operation?

The sale of a segment

2

What must occur for something to qualify as a discontinued operation?

The sale of a segment must qualify as a strategic shift and must have a significant effect on its operations

3

Difference between credit risk and market risk?

Credit risk: required to be disclosed while market risk is not required

4

When do you recognized the initial franchise fee as revenue?

When all conditions have been substantially performed

5

Substantial performance means:

Initial services have been performed and all other conditions of the sale have been met; no obligation to refund any payment

6

Rent expense includes:

First month's rent and an allocation of the bonus (last month's rent is prepaid expense)

7

Amounts reported in AOCI (such as unrecognized prior service cost) should be shown:

NET OF TAX

8

Routine employer contributions from general fund to pension trust fund would be accounted for as an:

Expenditure in general fund

9

Donor restricted cash contributions for long-term purposes should be shown where in the cash flow statement?

Financing section

10

Change from FIFO to LIFO

Accounting principal change that is accounted for prospectively

11

Reporting sufficiency test for segments:

75% of the total "external sales" only

12

Examples of items that should be disclosed in the "summary of significant estimates"

Basis of consolidation, depreciation methods, amortization

13

What amount do you capitalize when recording the lease? the lesser of:

FV of asset or PV of minimum lease payments

14

Depreciable life for leases under GAAP vs. IFRS

GAAP: OW - use asset life, NS - use lease term; IFRS: lower of the two

15

What costs are included/excluded in the cost of the lessee

Included: BPO and guaranteed residual value; Excluded: executory costs

16

Net income =

Revenue - expenses - tax expense

17

What type of major government fund must prepare a cash flow statement?

Only the proprietary funds

18

Stock dividends vs. cash dividends declared

Stock dividends: memo entry only; cash dividends: reduce the investment account under the equity method

19

Interest expense over the term of the debt =

Cash interest paid + discount or - premium

20

How does a 50% stock dividend and 2:1 stock split affect weighted average common shares outstanding?

Will occur at beginning of the year; Multiple beginning balance by 1.5 and by 2.

21

What must occur in order for an entity to be considered a blended unit?

Two entities must be substantially the same ( school district is NOT substantially the same at the city)