F1

Question 1

Relevent

Answer 1

Passing Confirm Money

Question 2

Faithful Representative

Answer 2

Completed Neutral equals Free of Error

Question 3

6K

Answer 3

Semi-Annually by foreign issuer

Question 4

40K

Answer 4

Annually by Canadian issuer

Question 5

20F

Answer 5

Annually by Non-US registrant register

Question 6

Under Regulation S-X

Answer 6

Financial Statement include 2 b/s, 3 other

Question 7

10 Q

Answer 7

Quarterly by US issuer, reviewed by CPA

40 days by large and accelerated filer, 45 days for other

Question 8

Other Comprehensive Income (non owner transaction)

Answer 8

PUFER:
Pension adjustment
Unrealized gain and loss AFS securities
Foreign currency translation
Effective portion cash flow hedge
Revaluation surplus( IFRS only)

Question 9

Comprehensive Income Formula

Answer 9

NI
+OCI
=Comprehensive Income

Net Income includes following items:
( IDE ) A
-Income from continuing operation
-Discontinued operation
-Extraordinary gain/loss

Question 10

Where Comprehensive Income report?

Answer 10

Comprehensive income can be reported:
-Statement of comprehensive income
OR
-Statement of income and comprehensive income.

Question 11

Reclassification adjustments must be shown in the financial statement that discloses comprehensive income:

Answer 11

To avoid double counting in comprehensive income items, which are currently displayed in net income.

Question 12

Reclassification adjustments

Answer 12

Move OCI items from AOCI to Net Income

Question 13

What is the purpose of reporting comprehensive income?

Answer 13

To summarize all changes in equity from nonowner sources.However, not include investments by stockholders and dividend

Question 14

What is the purpose of information presented in notes to the financial statements?

Answer 14

To provide disclosures required by generally accepted accounting principles.

Question 15

Related party disclosures under GAAP

Answer 15

Includes loan to officers

Question 16

Related party disclosures under IFRS

Answer 16

Includes loan to officers and key management compensation

Question 17

Estimate disclosure

Answer 17

Significant estimates should be disclosed when it is reasonably possible (not probable) that the estimate will change in the near term and that the effect of the change will be material. Immaterial items are not disclosed.

Question 18

Reportable operating segment

Answer 18

A reportable operating segment is one having 10% of all revenue, including revenue from unaffiliated sales(external) and from intersegment sales(internal)

Question 19

What information should a public company present about revenues from its reporting segments?

Answer 19

Disclose separately the amount of sales to unaffiliated customers and the amount of intracompany sales.

Question 20

Operating profit by segments

Answer 20

is based on the measure of profit reported to the “Chief Operating Decision Maker.”
Interest expense, income taxes, and general corporate expenses are not allocated to the divisions solely for the purposes of segment disclosures

Question 21

Which is a required enterprise-wide disclosure regarding external customers

Answer 21

Must report segment information about a company’s major customers if that customer provides 10% or more of the combined revenue, internal and external, of all operating segments.

Question 22

Quantitative Thresholds for Reportable Segment

Answer 22

The 10% “Size” test is the quantitative threshold for reportable segments. Any of the three criteria are applicable:
1) Reported revenue (sales to external customers and intersegment sales) greater than or equal to 10% of combined revenue (internal and external) of all operating segments.

2) Reported profit/loss greater than or equal to 10% of the greater (absolute value) of:
- -Combined profit of all operating segments that did not report a loss.
- -Combined reported loss of all operating segments that did report a loss

3) Assets greater than or equal to 10% of the combined assets of all operating segments.

Question 23

Under IFRS, which of the following is disclosed for an entity’s reportable segments?

Answer 23

Segment Asset
Segment profit or loss
Segment Liability( IFRS only)

Question 24

How the corporation should value its inventory in its interim financial statements?

Answer 24

The lower of cost or market method should be applied to interim periods.

Temporary declines in market value that are expected to reverse by the end of the annual period are not recognized in the interim statements.

Only permanent declines are recognized.

Question 25

How are discontinued operations and extraordinary items that occur at midyear initially reported?

Answer 25

Included in net income and disclosed in the notes to interim financial statements.

Question 26

Net Income

Answer 26

Includes (IDE)A: Income from continuing operation Discontinuing operation Extraordinary gain/loss Accounting principle change is Retained Earning item

Question 27

Change in accounting principle inseparable from a change in estimate

Answer 27

When a change in accounting principle is considered inseparable from a change in estimate, the change is handled as a change in estimate - prospectively. No cumulative effect adjustment is made.

Question 28

Correction of an error

Answer 28

Retroactive treatment as a prior period adjustment to retained earnings with restatement of prior periods.

Question 29

Extraordinary loss under U.S. GAAP

Answer 29

Must be both unusual in nature and infrequent in occurrence

Question 30

Changed from the cash basis of accounting to the accrual basis of accounting

Answer 30

The cash basis for financial reporting is not (GAAP); therefore, it is an error.

Question 31

Selling expense

Answer 31

Freight out, salary and commission, advertising, rent applicable to sale department

Question 32

Under U.S. GAAP, a material loss should be presented separately as a component of income from continuing operations when it is:

Answer 32

Gains or losses that are unusual in nature or occur infrequently but not both, are presented as a component of income from continuing operations.

Question 33

Impairment loss for Discounting continuing operation

Answer 33

The impairment loss is recognized in the year in which the component is classified as held for sale, NOT the year when asset sold.

Question 34

How should the effect of a change in accounting estimate be accounted for?

Answer 34

In the period of change and future periods if the change affects both.

Question 35

Change in depreciation method

Answer 35

Considered to be both a change in method and a change in estimate. These changes should now be accounted for as a change in estimate and handled prospectively

Question 36

Failure to accrue warranty cost

Answer 36

Correction of error--> RE prior period adjustment of opening balance

Question 37

Change in entity

Answer 37

Financial statements of all prior periods presented should be restated when there is a "change in entity"

Question 38

Tax treatment for IDEA

Answer 38

I- gross and net of tax | DEA- net of tax

Question 39

Change in accounting estimate show on F/S

Answer 39

No cumulative effect adjustment is made and no separate line item presentation is made on any financial statement. If a material change is being made, appropriate footnote disclosure is necessary.

Question 40

General and Administrative expense

Answer 40

Officer's salaries, accounting, legal, insurance

Question 41

Inventory cost

Answer 41

Purchase price, freight in

Question 42

Cumulative effect of a change in accounting principle

Answer 42

If non comparative F/S presented, equals the difference between retained earnings at the beginning of period of the change and what retained earnings would have been if the change was applied to all affected prior periods. If comparative F/S presented, is equal to the difference between beginning retained earning in the fire period presented and what retained earnings would have been if the new principle had been applied to all prior period.

Question 43

Examples of extraordinary items

Answer 43

Expropriation of a plant by the government | Prohibition of product line by newly enacted law

Question 44

Prior period adjustment formula

Answer 44

``` Correct accounting -Incorrect accounting =Prior period adjustment, before tax * (1-tax rate) =Prior period adjustment, net of tax ```

Question 45

Cost associated with exit and disposal activities

Answer 45

Cost to relocate employees Cost to terminate NON-capital lease Benefits related to involuntary employee termination Cost

Question 46

Extraordinary items under IFRS

Answer 46

IFRS prohibited Extraordinary items, these items will go to Income from continuing operation

Question 47

A change from direct recognition to the installment method

Answer 47

is a change in accounting principle inseparable from a change in accounting estimate that is treated like a change in accounting estimate, prospectively.

Question 48

Disclosed in a summary of significant accounting policies

Answer 48

Criteria for determining which investments are treated as cash equivalents. Property, plant, and equipment is recorded at cost with depreciation computed principally by the straight-line method.

Question 49

what is the loss treatment from first anti-trust action

Answer 49

Losses arising from a company's first (and probably "last") "anti-trust" action are unusual and extraordinary and should be reported as an extraordinary item. Losses resulting from additional costs caused by a strike at a major supplier or even at one's own company are not extraordinary and should be disclosed as a separate component of "income from continuing operations."

Question 50

Calculation of Gain and Loss when have insurance policy

Answer 50

``` Amount from insurance Co. -deductible -additional cost incurred -carrying amount of asset = gain/loss ```

Question 51

Inventory accounting principle change to ==>LIFO

Answer 51

Exception from GR No cumulative effect adjustment is made. The change is accounted for prospectively.

Question 52

The effective tax rate should reflect anticipated:

Answer 52

foreign tax rates and available tax planning alternatives

Question 53

Inventory losses from "permanent market declines"

Answer 53

are recognized in the interim period, incurred and later, if they "turn-around," are recognized as gains in a subsequent interim period only to the extent of previously reported losses.

Question 54

"Temporary" market declines

Answer 54

need not be recognized at interim when a "turn-around" can reasonably be expected to occur before the end of the fiscal year.

Question 55

A statement of cash flows for a development stage enterprise:

Answer 55

Present financial statements in accordance with GAAP and make additional disclosures such as cumulative amounts from inception for: net losses, deficits, sales and expenses, and cash flows and supplementary data.

Question 56

Research & development costs in developmental stage of company

Answer 56

100% expense

Question 57

Enhancing Qualitative

Answer 57

Comparability Variability Timeliness Understandability

Question 58

Five elements of present value measurement

Answer 58

``` U VOTE The price for bearing uncertainty Expectations about timing variations of future cash flows Other factors Time value of money Estimate of future cash flow ```

Question 59

Form 3 4 5

Answer 59

filed by director, officer, or beneficial owner of more than 10% of class of equity

Question 60

10K

Answer 60

annually U.S company. | 60 days by large, 75 by accelerated filer, 90 by other

Question 61

If the subsidiary's functional currency is its local currency

Answer 61

the subsidiary's financial statements are simply "translated" to the reporting currency. The resulting adjustment is reported as other comprehensive income.

Question 62

If the subsidiary's functional currency is not the same as its local currency (the functional currency may be the reporting currency or another currency)

Answer 62

the subsidiary's financial statements must be "remeasured" into the functional currency. The resulting gain or loss on remeasurement is reported in the consolidated income statement.