FAR 2 Module 7 Flashcards
what are the general guidelines for OCBOA financial statement presentation?
1) different titles from accrual basis F/S
2) required F/S are the equivalent of accrual basis B/S and I/S
3) F/S should explain changes in equity accts
4) statement of cash flows not required
5) disclosures should be similar to GAAP F/S disclosures
other comprehensive basis of accounting
-another type of financial statement presentation
-include financial statements prepared using the cash basis, modified cash basis, and income tax basis
conversion of cash basis to accrual
-have to convert because entity trying to go public, obtain loan from bank, or report to owners
-revenue recognition: cash; when cash received and accrual; when earned, realized or realizable
-expense recognition: cash; when paid and accrual; when incurred, owed, or benefit received
converting cash basis revenue to accrual revenue
cash basis revenue: from cb I/S
+ ending AR: rev. earned not yet collected
- beg. AR: cash collected earned in prior periods
- ending unearned revenue: cash collected before performing
+ beg. unearned revenue: cash collected earned in prior periods
=accrual basis revenue
converting cash paid for purchases to COGS
cash paid for purchases: from cb I/S
+ ending AP: expenses incurred in period but not paid
- beg. AP: expenses paid in current period from PY
- ending inventory: purchases made in current period not yet sold
+ beg. inventory: purchases made in prior periods sold during current period
=COGS
converting cash paid for operating expenses to accrual basis operating expenses
cash paid for operating expenses: from cb I/S
+ ending accrued liabilities: expenses incurred in CY not paid
- beg. accrued liabilities: expenses from PY that were paid in CY
- ending prepaid expenses: payments made during the current period that will benefit future periods
+ beg. prepaid expenses: payments made in PY that benefit CY
=accrual basis operating expenses
