Deck 6 Flashcards Preview

FAR > Deck 6 > Flashcards

Flashcards in Deck 6 Deck (20):
1

If a non monetary exchange has commercial substance, the transaction is accounted for using:

The fair value of the asset received or asset surrendered, whichever is more evident

2

When a non monetary exchange has commercial substance, gain and losses are recognized based on:

Difference between FV and BV of the asset given up

3

If an exchange lacks commercial substance, the gain recognized is based on:

Boot received (loss is recognized always)

4

When would an exchange lack commercial substance?

1) No change in cash flows; or 2)FV can not be determined

5

When is an exchange considered a monetary exchange?

When boot received equals or exceeds 25% of the total consideration (gains/losses recognized in their entirety)

6

Difference between historic cost and current cost?

Current cost reflects appreciation while historic ignores it

7

Difference between nominal dollar and current dollar?

Current dollar reflects inflation while nominal dollar ignores it

8

What is the required basis for GAAP for measuring prices?

Historical cost/nominal dollar

9

Foreign currency transaction gains and losses are included in:

Operating income

10

Foreign exchange transaction gains and losses are included in:

OCI

11

Weighted average rate =

Use for income statement

12

Foreign currency translation

Restate financial statements from functional currency to reporting currency

13

Foreign currency remeasurement

Restate foreign financial statements from foreign currency to entity's functional currency

14

Remeasurement method (temporal method)

"Dysfunctional" currency (need to remeasure to the functional currency); gain/loss - income statement

15

Translation method (current rate method)

"Functional" currency (need to translate to the reporting currency); gain/loss - OCI

16

Under income tax basis, nontaxable revenues and expenses may be reported as:

1) Separate line items; 2) additions and deductions to net income; or 3) note disclosure

17

Form 8-K reports:

Reports on major corporate events (does not show quarterly results, as those are shown in 10-Q)

18

A liability associated with an exit or disposal activity is only recognized when:

1) An obligating event has occurred; 2) Present obligation to transfer assets or provide services in the future; and 3)little or no discretion to avoid the future transfer of assets or providing of services

19

Change from LIFO to FIFO should be reported as a change to:

Beginning retained earnings

20

How are errors reported?

Change to beginning retained earnings in prior periods (debit to retained earnings)