FAR 16 Flashcards
(22 cards)
Fees of finders and consultants are?
Expensed at the period incurred.
Registration fees for equity securities issued are?
Decrease additional paid in capital.
The general guidelines for assigning amounts to the inventories acquired provide for:
Finished goods to be valued at estimated selling prices, less both costs of disposal and reasonable profit allowance.
When calculating stockholders equity:
Add in noncontrolling interest piece (FV of acquired compnay * NC %) + NCI Share of net income - NCI share of dividends
The stock options granted in a compensatory stock option plan should reduce the stock options outstanding account on the
Excercise date.
How do you record the purchase of treasury stock?
Dr.Treasury Stock
Dr. APIC
Dr. Retained Earnings
Cr. Cash
How do you record the re-issuance of treasury stock?
Dr. Cash
Cr. Treasury Stock
Cr. APIC
If you re-issue treasury stock below cost, what is the journal entry?
Dr. Cash
Dr. APIC-T/S
Dr. Retained Earnings
Cr. Treasury Stock
The primary purpose of a quasi-reorganization is to give a corporation the opportunity to?
Eliminate a deficit in retained earnings.
Are gains and losses on treasury stock transactions recorded on the income statement?
Never. Gains are recorded by increasing APIC-T/S and Losses are recorded by first eliminating any balance in APIC then decreasing retained earnings.
What are the required disclosures of a statement of cash flows under the direct method ?
The major classes of gross cash receipts and gross cash payments.
The amount of income taxes paid
A reconciliation of net income to net cash flow from operations.
What do investing activities include?
Acquisitions and sales of long term assets or investment assets.
What do financing activities include in cash flow?
Obtaining resources from owners and providing them with a return: borrowing money and repaying borrowed amounts. Dividends paid, no declared, should be included as an outflow of cash from financing activities.
What should be disclossed as supplemental info in statement of cash flows?
Conversion of debt to equity.
What is the primary purpose of a statement of cash flows?
Provide relevant information about the cash receipts and cash disbursements of an enterprise during a period.
What consistios of operating cash flow?
Selling products, collecting receivables, purchasing inventory, paying vendors, purchasing supplies, paying vendors, paying taxes, purhcasing selling tading securities, collecting interst on investment, collecting dividends on investment, paying interest on debt.
What is considered investing cash flow?
Purchasing long term asets or long term investments for cash, selling long term assets or investments cash proceeds
What are financing cash flow?
Borrowing funds, paying principal on debt, issuing common or preferred stock, paying dividends on common or preferred stock, repurchasing stock (treasury shares)
Differences between IFRS and GAAP, CASH FLOW
Interest received, dividends received, dividends paid (GAAP CFO) (IFRS CFO OR CFI)
Dividends paid IFRS vs. GAAP
GAAP: CFF IFRS: CFO or CFF
Indirect method of cash flow?
Start with net income
Direct method has seperate disclosure:
Need to include reconciliation to net income
