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Flashcards in Deck 5 Deck (20):
1

Intangible asset carrying amount =

Cost - amortization

2

Adjusted cash balance =

Unadjusted cash balance +/- bank errors + credit memos - service charges

3

Short term debt that is refinanced or is expected to be refinanced should be classified as:

Long term liability

4

Two adjustments for the bank balance

Deposits in transit (add) and outstanding checks (subtract)

5

Pledging A/R

Using existing A/R as collateral for a loan

6

Freight in vs. freight out

Freight in: COGS; freight out: selling expense

7

LIFO reserve is

Difference between inventory on LIFO method versus any other cost method

8

How does understatement of ending inventory affect retained earnings?

RE is understated

9

When is revenue recognized under a consignment sale?

When goods are sold to third parties

10

Consignee

"Sales agent"; inventory held by consignee is owned by the consignor

11

Inventory that is costed using LIFO or retail inventory method should be measured at

Lower of cost or market (Use lower of cost or NRV for anything else)

12

The write down of inventory is usually reflected in

COGS (unless its material; then loss should be separately identified in IS)

13

Weighted average cost per unit =

Total cost/total units purchased; periodic

14

Moving average method for inventory

Compute weighted average cost after each purchase; perpetual

15

Capitalized interest is equal to the

Lower of total interest or avoidable interest

16

Avoidable interest =

Average accumulated expenditures x interest rate

17

Classification of fixed assets

Equipment, buildings, and land; all shown at historical cost

18

Difference between additions, improvements/replacements, and repairs?

Additions and improvements/replacement: capitalize; Repairs: expense

19

How do you account for construction period interest?

Capitalized based on weighted average of accumulated expenditures

20

When a permanent impairment loss occurs, what account is credited for the loss?

Accumulated depreciation