FAR Flashcards
(1062 cards)
1
Q
Is FASB stmts of fin acctng concepts more authoritative then FASB acct stnd codification?
A
No
2
Q
Is IFRS more principle-based then US GAAP?
A
Yes
3
Q
Is IFRS more rule-based then US GAAP?
A
No
4
Q
Is US GAAP more principles based then IFRS?
A
No
5
Q
Is FASB acctng standards codification more authoritative then AICPA stmt of position?
A
Yes
6
Q
Is one of the goals of convergence to improve US GAAP?
A
Yes
7
Q
Is one of the goals of convergence to eliminate the differences in GAAP and IFRS?
A
Yes
8
Q
Is one of the goals of convergence to improve IFRS?
A
Yes
9
Q
What are the steps for the SEC rulemaking process?
A
- Concept release
- Rule proposal
- Real adoption
10
Q
True or false: the SEC issues financial reporting releases that usually agree with US GAAP.
A
True
11
Q
True or false: IFRS is simpler and less stringent (principles – based. )
A
True
12
Q
True or false: US GAAP is more detailed (rule – based).
A
True
13
Q
Is US GAAP more detailed/rule-based or less stringent/principles based?
A
US GAAP is more detailed/rule-based.
14
Q
Is IFRS simpler and less stringent than US GAAP?
A
Yes
15
Q
Is US GAAP more detailed then IFRS?
A
Yes
16
Q
Should an entity w/pref stock & preference in involuntary liquidation considerably in excess of par disclose it?
A
Yes, in the equity section of the stmt of fin position.
17
Q
T or F: installment method - gross profit on installment sale is recognized in income in proportion to cash collection.
A
True
18
Q
Sales minus cost of good sold equals
A
Gross profit
19
Q
What is the formula for gross profit percentage?
A
GP/sales
20
Q
What is the bonus method to record a new partner into a partnership?
A
(new total amt of partnership x new partner’s interest %) - amount new parter invested = the bonus
21
Q
Where is the principal portion reported in the stmt of cash flow for a building lease that’s reported as a capital lease?
A
In the financing activities section of its statement of cash flow.
22
Q
What is the installment method calculations of annual gross profit?
A
For each period, Multiply cash collected times the gross profit percentage in the period the sales were made to get that period’s GP.
23
Q
Where is interest portion reported in the stmt of cash flow for building lease reported as capital lease?
A
In the operating activities section of that statement of cash flow
24
Q
Does the stmt of changes in net assets include change in FV of each signif type of investment?
A
Yes
25
Does the stmt of changes in net assets include investment income?
Yes
26
Does the statement of changes in net assets include contributions from employers?
Yes
27
Does the statement of changes in net assets include contributions from participants?
Yes
28
Does the statement of changes in net assets include contributions from other identified sources?
Yes
29
Does the stmt of changes in net assets include benefits paid to participants?
Yes
30
Does the stmt of changes in net assets include pmts to insurance entities to purchase contracts?
Yes
31
Does the statement of changes in net assets include administrative expenses?
Yes
32
Does the statement of changes in net assets include The net change in the actuarial present value of accumulated plan benefits?
No
33
T or F: an advantage of perpetual inventory system is record keeping is simple.
False
34
T or F: advantage of periodic inventory system is it provides continuous record of inventory balance.
False
35
True or false: a disadvantage of the perpetual inventory system is that the inventory dollar amounts used for interim reporting purposes are estimated amounts.
False
36
True or false: a disadvantage of the periodic inventory system is that the cost of goods sold amount used for financial reporting purposes includes both the cost of inventory sold and inventory shortages.
True
37
True or false: the periodic inventory system calculates cost of goods sold as the difference between cost of goods available for sale and ending inventory.
True
38
True or false: the periodic inventory system does not maintain records indicating what the amount of ending inventory should be.
True
39
True or false: the periodic inventory system simply requires a company to determine what the amount of ending inventory is at period end.
True
40
True or false: there is no way to determine what portion of the items represented by the difference between cost of goods available for sale and cost of ending inventory was sold and what portion was stolen, broken and discarded, etc. in the periodic inventory system.
True
41
True or false: the periodic inventory system assigns the entire difference between cost of goods available for sale and ending inventory to cost of goods sold because of the inability to determine what portion represents inventory shortages.
True
42
True or false: the revenues control account of a governmental unit is increased when property taxes are recorded.
True
43
True or false: the revenues control account of a governmental unit is increased when the budget is recorded.
False
44
True or false: the revenues control account of a governmental unit is increased when appropriations are recorded.
False
45
True or false: the revenues control account of a governmental unit is increased when the encumbrance account is decreased.
False
46
True or false: budgetary events and accounts do not affect the revenue control account.
True
47
True or false: crediting the revenues control account of a governmental unit signifies either that cash has been collected, or that a valid receivable exists.
True
48
Which format must an enterprise fund use to report cash flow operating activities in the statement of cash flows?
Either direct or indirect method
49
True or false: for proprietary funds, a statement of cash flows should be presented using the direct method.
True
50
Where should receipts from a special tax levy to retire and pay interest on general obligation bonds be recorded?
Debt service fund
51
True or false: debt service funds are used to account for payment of the maturing principal and related interest of general government long-term debt and the accumulation of financial resources for these payments.
True
52
Under GASB concept statement one, accountability consist of what subobjectives?
1. Inter-period Equity
2. Budgetary & fiscal compliance
3. Service efforts costs & accomplishments.
53
What sub objective of accountability is interperiod equity?
Financial reporting should provide information to determine whether current year revenues were sufficient to pay for current your services.
54
What sub objective of accountability is Service efforts costs and accomplishments?
Financial reporting should provide information to assist users in assessing the service efforts, costs, and accomplishments of the governmental entity.
55
IFRS requires that inventories be valued at?
Lower of cost or not realizable value.
56
What is the net realizable value?
The sale price minus the cost to sell or dispose.
57
What type of account is other comprehensive income?
An equity account
58
What is the numerator in the fraction used to compute earnings per-share?
Net income plus (interest net of taxes)
59
Using the allowance method for uncollectible accounts what effect would the right off of accounts receivable have on net income and total assets?
No affect on either
60
Assuming a single tax jurisdiction, the maximum number of deferred tax balances that can be presented on a classified balance sheet is?
Current & noncurrent.
61
With respect to qualitative characteristics what are US GAAP and IFRS differences?
They have the same qualitative characteristics
62
True or false: enterprise funds are a type of proprietary fund.
True
63
True or false: the computation of income for any year except the first must accommodate the possibility of a change in estimate for the percentage of completion method.
True
64
True or false: equipment that has an alternative use for R & D is capitalized and depreciated. The other expenditures should be expensed immediately for research and development.
True
65
Is equipment purchased for current and future projects capitalized and depreciated if it is for research and development?
Yes
66
Is equipment purchased for current projects only, capitalized and depreciated if it is for research and development?
No they are expensed immediately
67
Are research and development salaries for a current project capitalized and depreciated?
No, they are expensed immediately.
68
During periods of rising prices, will the inventory cost differ between FIFO perpetual and FIFO periodic inventory system?
No, they will be the same
69
What are the qualitative characteristics differences between US GAAP and IFRS?
With the issuance of SFAC 8 chapter 3 - they are the same now.
70
The total of external revenues of all reportable segments must make up at least what percentage of total consolidated revenues in determining that no additional segments should be reported?
75%
71
In the final year, are both actual total costs and income previously recognized used in the percentage of completion method?
Yes
72
Book value per share of co
| Min stock?
Book value of corporation/shares of stock outstanding
73
Is the book value of corporation the total stockholders' equity?
Yes
74
Are the common shares outstanding the common stock issued minus reacquired held in treasury stock?
Yes
75
The FASB conceptual framework for correctly forecasting is called?
Predictive value.
76
True or false: The FASB conceptual framework for correctly forecasting is called feedback value.
False
77
True or false: The FASB conceptual framework for correctly forecasting is called representational faithfulness.
False
78
True or false: The FASB conceptual framework for correctly forecasting is called reliability.
False
79
True or false: The FASB conceptual framework for correctly forecasting is called predictive value.
True
80
Are extraordinary gains from extinguishment of debt classified as "other" comprehensive income?
No
81
Are foreign currency translation adjustments classified as other comprehensive income?
Yes
82
Are gains and losses on foreign currency transactions that are designated as and are effective as economic hedges of a net investment in a foreign entity, commencing as of the designation date classified as other comprehensive income?
Yes
83
Are gains and losses on intra-entity foreign currency transactions that are of a long-term investment nature when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting entity's financial statements classified as other comprehensive income?
Yes
84
Are gains and losses on derivative instruments that are designated as, and qualify as, cash flow hedges classified as other comprehensive income?
Yes
85
Are unrealized holding gains and losses on available-for-sale securities classified as other comprehensive income?
Yes
86
Are unrealized holding gains and losses that result from a debt security being transferred into the available-for-sale category from the held to maturity category classified as other comprehensive income?
Yes
87
Are subsequent decreases or increases in the fair value available for sale securities previously written down as impaired classified as other comprehensive income?
Yes
88
Are gains or losses associated with pension or other post retirement benefits classified as other comprehensive income?
Yes
89
Are prior service costs or credits associated with pension or other post retirement benefits classified as other comprehensive income?
Yes
90
Are transition assets or obligations associated with pension or other post retirement benefits classified as other comprehensive income?
Yes
91
Are minimum pension liability equity adjustment for a defined benefit pension plan classified as other comprehensive income?
Yes
92
Are unrealized gains for the year on available for sale marketable securities classified as other comprehensive income?
Yes
93
Are foreign currency translation adjustments classified as other comprehensive income?
Yes
94
Are extraordinary gains from extinguishment of debt classified as other comprehensive income?
No
95
What's the formula to find the cost of merchandise?
Sales price/mark-up + 100%
96
What is the earliest point that a company can report a group as a discontinued operation?
When the company classifies it as held for sale.
97
True or false: cash flow per-share should not be disclosed under either the direct or indirect method for statement of cash flows.
True
98
True or false: the income taxes paid should not be disclosed in the statement of cash flows using the indirect method.
False
99
True or false: the interest paid, net of amounts capitalized should not be disclosed in the statement of cash flows using the indirect method.
False
100
True or false: the dividends paid on preferred stock should not be disclosed in the statement of cash flows using the indirect method.
False
101
True or false: Financial statement shall not report an amount of cash flow per-share
True
102
Are cash basis financial statements sometimes provided for investors or creditors?
Yes
103
True or false: net operating cash flow is the difference between cash receipts and cash disbursements.
True
104
True or false: the cash basis method of accounting is not an allowable method under GAAP unless there is no material difference from the accrual method.
True
105
Is form 10 – K the required annual report?
Yes
106
True or false: form 10 – K provides a comprehensive report of a company's business and financial condition, including audited financial statements.
True
107
True or false: examples of items commonly considered to be cash equivalents our treasury bills, commercial paper, money market funds, and federal funds sold.
True
108
True or false: the purchase of US treasury bills would have no effect on the statement of cash flows.
True
109
Would the purchase of a US treasury bill be treated as an outflow from investing activities on the statement of cash flows?
No
110
What is the formula for effective interest of debenture bonds?
Carrying value of the bonds x effective interest rate x time period.
111
Are trading securities recognized on the balance sheet at fair value?
Yes
112
Are a company's unrealized holding gains and losses for trading securities included in earnings?
Yes
113
In like kind exchanges how is cash to compensate for the difference in values recognized?
A gain equal to the difference between fair value and carrying
amount.
114
When are like kind exchanges recorded based on the book value?
When fair value is not determinable.
Exchange transaction is to facilitate sales for customers.
Exchange transaction lacks commercial substance.
115
True or false:: a transaction that is unusual in nature and in frequent in occurrence should be reported separately as a component of income before any cumulative effect of accounting changes and after discontinued operations.
True
116
True or false: an extra ordinary item is a transaction that is both unusual nature and in frequent in occurrence.
True
117
True or false: an extraordinary item should appear after discontinued operations and before any cumulative effect of accounting changes.
True
118
True or false: an extraordinary item should appear after any cumulative effect of accounting changes and before discontinued operations.
False
119
True or false: an extraordinary item should appear after any cumulative effect of accounting changes and after discontinued operations.
False
120
True or false: an extraordinary item should be reported separately as a component of income before any cumulative effect of accounting changes and before discontinued operations.
False
121
How should a change from depreciation to the modified approach be reported?
As a change in accounting estimate, not requiring restatement of prior periods.
122
The billings for transportation services provided to other governmental units are recorded by the intern service fund as?
Operating revenues
123
True or false: FASB allows a great deal of flexibility and presentation format for the statement of activities.
True
124
What is the formula for rate of return on assets?
Net income/average assets
125
True or false:Blended component unit data is included within the primary government information.
True
126
True or false: a component unit is presented in the component units column after the primary government totals.
True
127
True or false: When applying inventory lower of cost or market, if the replacement cost is less than realizable value less profit margin, the cost used is the original cost.
True
128
What are the four assumptions that underlie GAAP?
Economic entity assumption
Going concern assumption
Periodicity assumption
Monetary unit assumption
129
What is the economic entity assumption?
The presumption that all economic events can be identified with a particular economic entity and that the activities of the company can be distinguished from those of its owners.
130
What is the going concern assumption?
A business entity will continue to operate in definitely.
131
What is the periodicity assumption?
Relates to the ability to divide the life of a business into shorter artificial time periods for financial reporting purposes.
132
What is the monetary unit assumption?
The monetary unit is the most appropriate common denominator for measuring, reporting, and analyzing economic activity.
133
What is the quick ratio?
Current assets (excluding inventories and prepaid assets)/current liabilities
134
How are transfers in from other funds for government revenues represented in the budget?
Estimated other financing sources
135
How are interfund transfers recognized in the government budget?
Other financing sources
136
How are property taxes, licenses and permits, and intragovernmental revenues represented in the government budget?
Estimated revenues
137
Edge owns a small warehouse located on the banks of a river in which it stores inventory worth approximately 500,000. Edge is not insured against flood losses. The river last overflowed its banks 20 years ago. Is an adjustment required?
No adjustment is required
138
During The year, edge began offering certain health care benefits to its eligible retired employees. Edges actuaries have determined that the discounted expected cost of these benefits for current employees is 150,000. Is an adjustment required?
Yes for 150,000
139
Edge offers an unconditional warranty on it toys. Based on past experience, edge estimates it's warrantee expense to be 1% of sales. Sales during the year were 10 million. Is an adjustment required?
Yes for 100,000
140
During the year, a safety hazard related to one of edges toy products was discovered. It is considered probable that edge will be liable for an amount in the range of 100,000 to 500,000. Is an adjustment required?
Yes for 100,000 because the lower amount would be reported. The additional 400,000 potential liability must be disclosed.
141
During the year, edge initiated a lawsuit seeking 250,000 in damages from patent infringement. Is an adjustment required?
No adjustment is required
142
During the year, a former employee filed a lawsuit seeking 100,000 for unlawful dismissal. Edges attorneys believe the suit is without merit. No court date has been set. It is an adjustment required?
No adjustment is required.
143
At the end of the year, edge guaranteed a bank loan of 100,000 for its president's personal use. Is an adjustment required?
No adjustment is required
144
In Dec 31. edge has a division that qualifies as a component held for sale. The division had a book value at Dec 31 of 400,000 and a fair value on that date of 150,000. The division had no operations during the year. Assume edges income tax rate is 40%. The division was sold on February 15 of the next year. Is an adjustment required?
Yes for 150,000 (the loss amount net of taxes) (150,000-400,000) - (250,000 x tax rate 40%)
145
At the beginning of a following year, a warehouse containing a substantial portion of edges inventory was destroyed by fire. Edge expects to recover the entire loss, except for 250,000 deductible, from insurance. Is an adjustment required for December 31 of the previous year?
No adjustment is required
146
At the beginning of the following year, inventory purchased FOB shipping point from a foreign country was detained at that countries border because of political unrest. The shipment is valued at 150,000. Edges attorneys have stated that it is probable that edge will be able to obtain the shipment. Is an adjustment required?
No adjustment is required
147
At the beginning of the following year, edge issued 10 million bonds at a premium of 500,000. Is an adjustment required?
No adjustment is required
148
At the beginning of the following year, the IRS assessed edge an additional 400,000 for the previous tax year. Edge's tax attorneys and tax accountant have stated that it is likely that the IRS will agree to a 100,000 settlement. Is an adjustment required?
And adjustment is required for 100,000 in the notes to the f/s
149
Does events subsequent to the balance sheet date that are about conditions existing before the balance sheet date required to be disclosed?
Yes
150
If the possibility of a loss is remote, would it be reported or disclosed in the financial statements?
Neither
151
Are contingent gains such as from an initiated lawsuit accrued or disclosed?
Neither
152
Is the general fund always a major fund for government?
Yes
153
According to the FASB conceptual framework, the usefulness of providing information in financial statements is subject to the constraints of?
Cost-benefit
154
True or false: Financial reporting should provide information to determine whether current year revenues were sufficient to pay for career services. This sub objective of accountability is interperiod equity.
True
155
True or false: Financial reporting should demonstrate whether resources were obtained and used in accordance with the entity's legally adopted budget.This sub objective of accountability is interperiod equity.
False it is budgetary in fiscal compliance
156
True or false:Under GASB the accountability of service efforts costs and accomplishments are financial reporting should provide information to assist users in assessing the service efforts, cost, and accomplishments of the governmental entity.
True
157
True or false:Under GASB the accountability sub objective budgetary and fiscal compliance, is financial reporting should demonstrate weather resources were obtained and used in accordance with the entities legally adopted budget;it should also demonstrate compliance with other finance related legal or contractual requirements.
True
158
True or false:Under GASB accountability some objective enter. Equity is financial reporting should provide information to determine whether current your revenues were sufficient to pay for career services.
True
159
True or false: Financial reporting should provide information to assist users in assessing the service efforts, costs, and accomplishments of the governmental entity. This sub objective of accountability is interperiod equity.
False this is service efforts cost and accomplishments.
160
According to the FASB conceptual framework, the process of reporting an item in the financial statements of an entity is?
Recognition
161
True or false: recognition and realization are not synonymous.
True
162
True or false: recognition and realization are synonymous.
False
163
True or false: in a consignment sale, a sale is not recognized until it is sold.
True
164
Does a contingent arrangement fall in the same category as a consignment?
Yes
165
When receiving royalties, for a period of three years the royalties received should be reported when? See
In the period earned.
166
According to the FASB conceptual framework, financial statements include property with a caring amount increased to managements estimate of market value violates the concept of reliability.
True
167
True or false: late financial statements violates timeliness.
True
168
True or false: late financial statements violate reliability
False it violates timeliness
169
GASB primary characteristics of government structure that must be considered in the establishing financial reporting objectives?
Representative form of gov & separation of powers.
Federal system of gov & prevalence of intergovernmental revenues.
Relationship of taxpayers to services received.
170
Does the characteristic of reliability allow users of financial statements to generate predictions about an organization?
No – relevance does
171
Does the characteristic of relevance allow users of financial statements to generate predictions about an organization?
Yes
172
Does the characteristic of timeliness allow users of financial statements to generate predictions about an organization?
No – relevant does
173
Does the characteristic of neutrality allow users of financial statements to generate predictions about an organization?
No – relevance does
174
True or false: financial capital is applied to both currently reported net income and comprehensive income.
True
175
True or false: physical capital is applied to currently reported net income; financial capital is applied to comprehensive income.
False - The physical capital would not be included in return on capital
176
True or false:Financial capital is applied to currently reported net income; physical capital is applied to comprehensive income.
Falls – physical capital would not be included in return on capital.
177
True or false: physical capital is applied to both currently reported net income and comprehensive income.
False – physical capital would not be included in return on capital.
178
Are current receivables acquired as a result of customary trade terms normally reported at their face value?
Yes
179
Are long-term receivables reported at their present value?
Yes
180
Are current receivables acquired as a result of customary trade terms normally reported at the present value?
No they are normally reported at their face value
181
What is the purpose of SFAC 4 as stated in the concepts statement?
To provide a basis for establishing detailed accounting and reporting standards for non-business entities.
182
Is the purpose of SFAC4 to provide the methods for preparing financial statements for non-business entities?
No
183
Is the purpose of SFAC4 to provide detailed accounting and reporting standards for non-business entities
No
184
Is the purpose of SFAC4 to provide a basis for establishing detailed accounting and reporting standards for non-business entities?
Yes
185
True or false: conceptually, interim financial statements can be described as emphasizing timeliness over faithful representation.
True
186
True or false: conceptually, interim financial statements can be described as emphasizing faithful representation over relevance.
False
187
True or false: conceptually, intern financial statements can be described as emphasizing relevance over comparability.
False
188
True or false: conceptually, interim financial statements can be described as emphasizing comparability over neutrality.
False
189
True or false: to be relevant, information should have confirmatory value.
True
190
True or false: to be relevant, information should have verifiability..
False
191
True or false: to be relevant, information should have understandability.
False
192
True or false: to be relevant, information should have costs and benefits.
False
193
The cost of materials used in prototype testing qualify for asset capitalization?
No – they qualify for research and development
194
Do cost of testing a prototype and modifying its design qualify for asset capitalization?
No – it qualifies for R and D
195
Does the salaries of engineering staff developing a new product qualify for asset capitalization?
No – it qualifies for R and D
196
Do the legal costs associated with obtaining a patent on a new product qualify for asset capitalization?
Yes
197
The GASB requires the issuance of two financial statements for governments which are?
The bal sheet or stmt of net position.
| Statement of revenue & expenses or statement of activities.
198
True or false: extraordinary gain is already included in the net income amount.
True
199
Articulation means the financial statements are?
Fundamentally interrelated.
200
True or false: neutrality is an ingredient of faithful representation.
True
201
True or false: neutrality is an ingredient of relevance
False
202
True or false:SFAC 4 suggests performance indicators for non-business organizations include information about both the nature and relationship between inflows and outflows and service efforts and accomplishments.
True
203
True or false the concept of faithful representation and financial reporting includes neutrality.
True
204
True or false: future values of single payments and present values of single payments are reciprocals.
True
205
True or false: according to FASB an entity's revenue may result from a decrease in a liability from primary operations.
True – unearned revenues
206
True or false: confirmatory value does not relate to relevance or faithful representation.
True
207
True or false: comparability relates to both relevance and faithful representation.
True
208
True or false: verifiability relates to both relevance and faithful representation
True
209
True or false: timeliness relates to both relevance and faithful representation
True
210
True or false: comparability relates to both relevance and faithful representation
True
211
True or false: confirmatory value relates to both relevance and faithful representation
False
212
True or false: comparability, verifiability, timeliness, and understandability relate to both relevance and faithful representation.
True
213
True or false: con for my Tory value is a component of relevance.
True
214
According to FASB the objectives of financial reporting for business enterprises are based on the needs of the users of the information.
True
215
Sure false: according to FASB the objectives of financial reporting for business enterprise are based on GAAP.
False
216
Is the Paramount objective of financial reporting by state and local government accountability?
Yes
217
True or false: GAAP and IFRS have the same objective of general purpose financial reporting with the issuance of SF a C8, chapter
True
218
True or false: cost to obtain a patent are not R&D expenditures and should be capitalized
True
219
True or false: predictive value is an ingredient of relevance
True
220
True or false: predictive value and confirmatory value our components of relevance
True
221
True or false predictive value is an ingredient of faithful representation
False
222
What are the primary qualitative characteristics of accounting information?
Relevance and faithful representation.
223
What are the components of relevance?
Predictive value, confirmatory value, and materiality.
224
What are the characteristics of faithful representation?
Completeness, neutrality, and being free from error.
225
True or false: to be relevant, information should have confirmatory value. To be relevant
True
226
Qualities of faithful representation?
NEC:
Neutrality, timelines
Error free, understandability
Complete, comparability, verifiability
227
What are the components of relevance?
PC:
Predictive value - comparability
Confirmatory value - verifiability, timeliness.
228
True or false: the term reliability is still used in SFAC5, even though it has changed to faithful representation in SFAC 8.3
True
229
What are the three sup objectives of the GASB accountability for financial reporting?
1. Interperiod Equity
2. Budgetary & fiscal compliance
3. Service efforts costs & accomplishments
230
What's the purpose of SFAC 4 as stated in that concept statement?
To provide a basis for establishing detailed accounting and reporting standards for non-business entities
231
True or false: interim financial statements emphasize timeliness over faithful representation
True
232
True or false: interim financial information is essential to provide investors and others with timely information as to the progress of the enterprise
True
233
True or false: conceptually, interim financial statements can be described as emphasizing faithful representation over relevance
False
234
True or false: conceptually, interim financial statements can be described as emphasizing relevance over comparability
False
235
True or false: conceptually, interim financial statements can be described as emphasizing comparability over neutrality
False
236
True or false: the royalties should be recognized as revenue in the period earned.
True
237
True or false: royalties should be reported as revenue at the date of the royalty agreement
False
238
True or false: royalty should be reported as revenue in the period received
False
239
True or false: royalty should be reported his revenue evenly over the life of the royalty agreement
False
240
True or false: the SEC has the authority to establish accounting standards, but it has generally deferred to the FASB to generate US GAAP
True
241
Total asset turnover ?
Sales/total assets
242
Are foreign currency adjustments an element of other comprehensive income?
Yes
243
Are accumulated gains and losses on available for sale investments an element of other comprehensive income?
Yes
244
Are cumulative effect of a change in accounting estimate an element of other comprehensive income?
No
245
Is amortization of unrecognized prior service costs related to a pension plan an element of other comprehensive income?
Yes
246
What's the formula for cash provided by operating activities in the statement of cash flow's?
NI - AR + AP
247
Is cash received from sale of equipment included in investing activities?
Yes
248
Is cash received from sale of equipment included in cash provided by operating activities?
No
249
Is cash received from sale of equipment included in operating activities in the statement of cash flows?
Yes
250
Is cash paid to employees included in operating activities in the statement of cash flows?
Yes
251
Is interest paid to bank on note included in operating activities in the statement of cash flows?
Yes
252
True or false: for IFRS, but not for US GAAP, bank overdraft are presented separately as an operating activity
True
253
How are bank overdress presented for IFRS?
As operating activities
254
How are bank overdraft presented for GAAP?
Financing activities
255
How are interesting dividends presented for IFRS?
As operating or investing activities
256
How was interest and dividends presented for GAAP?
Only as operating activities
257
Does IFRS use extra ordinary items?
No
258
What is the times preferred dividends ratio?
NI/preferred stock div
259
Does dividends paid decrease the cash flow's provided by financing activities?
Yes
260
Does borrowings under a line of credit increase the company's cash flow's provided by financing activities?
Yes
261
Do the proceeds from the issuance of convertible bonds increase cash flows provided by financing activities?
Yes
262
Do the proceeds from the sale of a building increase cash flow sprovided by financing activities?
No
263
What effect would the purchase of a three-month US treasury bill have on the statement of cash flows?
It would have no effect
264
What is the formula for AR turnover in days
365/AR turnover
265
What is the formula for defensive interval ratio
Total quick assets/ave daily cash exp.
266
Is return on stockholders equity useful in assessing liquidity of the company?
No it is a profitability measure
267
What is the formula for return on stockholders equity?
Net income/total SH Equity
268
If a company plans to issue additional common stock will that increase or decrease stockholders equity?
Increase
269
What is the average collection for AR?
360/AR Turnover
270
Are dividends received on stock an investing activity?
No
271
Are cash proceeds from sale of investments considered investing activities?
Yes
272
Is common stock purchased considered investing activities?
Yes
273
What section of the statement of cash flows does the amortization of a bond discount go?
Operating activities
274
Does other comprehensive income include unrealized holding gains or losses on available-for-sale securities?
Yes
275
Does other comprehensive income include sales revenue?
No
276
Does other comprehensive income include loss on early extinguishment of bonds?
No
277
Does other comprehensive income include realized gain on sale of available-for-sale securities?
No
278
Does other comprehensive income include loss on right down of inventory?
No
279
Does comprehensive income include loss from discontinued operations?
Yes
280
This comprehensive income include prior periodError correction?
Yes
281
Does comprehensive income include dividends paid to stockholders?
No
282
Does comprehensive income include unrealized loss on investments and marketable equity securities classified as available for sale?
Yes
283
What is the primary purpose of a statement of cash flow?
To provide relevant information about cash receipts and cash disbursements during the period.
284
Is the primary purpose of a statement of cash flow to provide relevant information about differences between net income and associated cash receipts and disbursements?
No
285
Is the primary purpose of a statement of cash flow to provide relevant information about an enterprise his ability to generate future positive net cash flows?
No
286
Is the primary purpose of the statement of cash flow to provide relevant information about the cash receipts and cash disbursements of an enterprise during a period?
Yes
287
Is the primary purpose of a statement of cash flow to provide relevant information about an enterprise ability to make cash operating needs?
No
288
Is the gain on sale of plant asset included in the operating activities section of a cash flow statement?
Yes
289
Are unrestricted contributions reported is operating activities?
Yes
290
True or false: both the US GAAP and IFRS use the term retained earnings
True
291
True or false: IFRS uses the same stock account titles as US GAAP
False
292
True or false: US GAAP and IFRS account for treasury stock in the same manner
False
293
Does IFRS use paid in capital to account for reevaluation of property plant and equipment?
No
294
The debt to equity ratio is computed how?
Total liabilities/total stockholders equity
295
What is the formula for inventory turnover?
COGS/AVG inventory
296
What is the formula for AR turnover?
Sales/AVG AR - allowance for doubtful accounts
297
Which financial statement is the accumulated other comprehensive income reported?
The statement of financial position
298
True or false: other comprehensive is transferred to accumulated other comprehensive income each period.
True
299
Accumulated other comprehensive income is reported as part of equity on which financial statement?
The balance sheet also known as statement of financial position.
300
Is cash in Bonn sinking fund a cash equivalent?
No because it would be restricted cash
301
Is a post dated check a cash equivalent?
No because it would still be a receivable
302
True or false: accumulated other comprehensive income is reported in the stockholders equity section of the balance sheet.
True
303
The excess of proceeds over cost of treasury stock sold would be credited to what account under the cost method?
Additional paid in capital
304
Are trading securities included in quick assets?
Yes
305
How should the amortization of bond discount on long-term debt be reported in a statement of cash flow's prepared using the indirect method?
In operating activities as an addition to income.
306
What's the formula for comprehensive income?
Net income + Other comprehensive income = comprehensive income
307
True or false: disclosures should be limited to principles and methods peculiar to the industry in which the company operates.
False
308
True or false: disclosures of accounting policies is an integral part of the financial statements.
True
309
True or false: the format and location of accounting policy disclosures are fixed by generally excepted accounting principles.
False
310
True or false: disclosures should duplicate details disclosed elsewhere in the financial statements.
False
311
True or false: payments of dividends to stockholders are included in financing activities.
True
312
True or false: payment of interest on bonds payable on coded in financing activities.
False it is included in operating activities.
313
True or false: payment to acquire shares of common stock are included in financing activities.
False – they are included in investing activities.
314
Under IFRS, if a company uses the functional method, where must it disclose expenses by nature?
In the notes to the financial statement.
315
Under IFR us, are extraordinary items prohibited?
Yes
316
Is the IFRS definition of discontinued operations more narrow than that of US GAAP?
Yes
317
What is the formula for gross profit?
Sales - COGS = GP
318
What effect does recovery of accounts written off have on the income statement?
No effect
319
Where are purchase discounts shown in the single step income statement?
As deductions in the expense section.
320
Where are revenue and gains shown in the single step income statement?
In the upper part of the statement.
321
In the single step income statement, does the total revenues include purchase discounts?
No
322
In the single step income statement, does recovery of accounts written off have an effect on the total revenues?
No
323
True or false: increase in Accounts Receivable's are classified as investing activities.
False
324
Is the sale of property, plant, and equipment classified as investing activities?
Yes
325
True or false: investing activities involve acid transactions other than those related to operating results.
True
326
Is the payment of cash dividends to shareholders classified as investing activities?
No
327
Is the issuance of common stock to the shareholders classified as investing activities?
No
328
What section of the statement of cash flows is the cash effect of transactions obtaining resources from owners and providing them with the return on their investment?
The financing activities section
329
Are the cash effects of transactions involving making and collecting loans included in the financing activities section?
No
330
Would collection of proceeds from a note payable be reported as in investing activity
No
331
With the collection of an overdue account receivable from a customer be reported as in investing activity?
No
332
Would the collection of the tax refund from the government report as in investing activity?
No
333
Which is the most appropriate financial statement to use to determine if a company obtained financing during a year by issuing debt or equity securities?
Statement of cash flows
334
Would dividends received from investments increase reported cash flows from operating activities using the direct method?
Yes
335
Does a gain on sale of equipment increase reported cash flows from operating activities using the direct method?
No
336
Does the gain on early retirement of bonds increase reported cash flows from operating activities using the direct method?
No
337
Does the change from straight line to accelerated depreciation increase reported cash flows from operating activities using the direct method?
No
338
Does interest received increase reported cash flows from operating activities using the direct method?
Yes
339
What section of the statement of Cash flows does borrowing 5000 used to purchase a truck go?
In cash inflow from financing activities and cash outflow from investing activities
340
Raising cash through borrowing is what type of activity on the statement of cash flows?
It is cash inflow from financing activity
341
Using cash to purchase fixed assets is what type of activity in the statement of cash flows?
It is an outflow from investing activities.
342
What is the times interest earned ratio formula?
Income b4 int exp & tax/int exp
343
What is the formula for The number of days sales' in average inventories?
Ave inv/COGS X days per year
344
What is the price – earnings ratio?
Stock price per share/EPS
EPS= NI/common shares o/s
345
What is the formula for earnings per-share?
Net income/CS outstanding
346
At the end of the accounting period, the components of other comprehensive income are transferred to which stockholders equity accounts?
Accumulated other comprehensive income
347
What's the formula for number of days in the current year operating cycle?
days sales in inventory + # days sales in AR
348
What is the PE ratio?
Stock price/EPS
349
What is the formula for EPS?
NI - PS Dividend/CS outstanding
350
True or false: IFRS statements may present property, plant, and equipment first in the balance sheet
True
351
True or false: cash flows per-share should not be reported in a statement of cash flows
True
352
What is the purpose of reporting comprehensive income?
To summarize all changes in equity from non-owner sources.
353
When a company declares a stock dividend will this decreased stockholders equity?
No, total stockholders equity is not changed.
354
Are the proceeds from sale of treasury stock considered financing activities on the statement of cash flows?
Yes
355
Are dividends paid considered financing activities on the statement of cash flows?
Yes
356
What is the formula for dividends per-share?
Dividends paid out/total shares
357
What's the formula for cash paid to suppliers?
COGS + increase in inventory + decrease in AP
358
Are dividends to shareholders included in comprehensive income?
No
359
Are revenues from external customers included in comprehensive income?
Yes
360
Is interested expense to bondholders included in comprehensive income?
Yes
361
Is extraordinary loss from a tornado included in comprehensive income?
Yes
362
How should a gain from the sale of used equipment for cash be reported in the statement of cash flows using the indirect method?
In operating activities as a deduction from income
363
A not-for-profit company should report a contribution for a new building as cash flows from which section of the statement of cash flows?
Financing activities
364
Is the modified cash basis a hybrid method that combines features of both the cash basis and the accrual basis?
Yes
365
Does modifications to the cash basis accounting include such items as the capitalization of assets and the accrual of income taxes?
Yes
366
True or false: for the modified cash basis, the resulting balance sheet would include long term assets, accumulated depreciation, and a liability for income taxes.
True
367
Which SEC document provides instructions for filing the nonfinancial statement forms required under the securities act of 1933?
Regulation S-K
368
A company is required to file quarterly financial statements with the U.S. Securities & exchange commission on what form?
Form 10-Q
369
Which period is a company required to present down she's on form 10 – Q?
The end of proceeding fiscal year
370
What is 10 – Q used to file?
Quarterly reports with the SEC
371
What are the required financial statements in the form 10 – Q?
Quarterly and end of the preceding fiscal year balance sheet
372
Which statements are usually included in a set of personal financial statements?
A statement of financial condition and a statement of changes and net worth.
373
SEC regulation S – X provides guidance for the issuer regarding?
Format and content of financial information submitted to the SEC
374
What is the maximum number of days after the companies fiscal year end that the company has to file form 10 – K with the SEC?
75 days
375
True or false there is no current deduction for capital expenditures in the cash basis of determining taxable income.
True
376
A company that is a large accelerated filer must file it's form 10 – Q with the SEC within how many days after the end of the period?
40 days
377
Does IFRS allow LIFO?
No
378
Is the freight in cost included in the cost of inventory?
Yes
379
Is the cost of materials and labor incurred to bring the product to salable condition included in the cost of inventory?
Yes
380
Is the insurance costs during transit of purchased goods included in the cost of inventory?
Yes
381
Under the lower of cost or market rule what is the market upper limit?
NRV which is
| Selling price minus processing costs
382
Under the lower of cost or market roll what is the market lower limit?
NRV - normal profit margin
| = selling price - processing cost - normal profit margin
383
Under the lower of cost or market rule, when the replacement cost is less than market lower limit which one is used?
The market lower limit
384
Generally, which inventory costing method approximates most closely the current cost for COGS and ending inventory?
COGS = LIFO
| Ending inventory = FIFO
385
Could current cost financial statements report holding gains for good sold during the period and holding gains on inventory at the end of the period?
Yes for both
386
In increase in the cash surrender value of life insurance policy would be recorded by?
Decreasing annual insurance expense.
387
True or false: no value is assigned to the conversion feature when convertible debt is issued.
True
388
True or false: the holder of convertible debt must be repaid with shares of the issuers stock.
False
389
True or false: the convertible debt transaction should be recorded as the issuance of stock.
False
390
True or false: for convertible debt, the issuers stock price is less than market value when the debt is converted.
False
391
When a company contracts with a supplier for a required amount of goods, how is it recorded in the financial statements?
Disclosed in the notes if fs
392
When a company acquires 20% to 50% of the outstanding stock of another company what method does the FASB require?
The equity method
393
For a security transferred from trading category to available for sale will have what effect in earnings for the period.
No effect - The unrealized holding gain or loss at the date of the transfer will have already been recognized in earnings and shall not be reversed.
394
For a security transferred into the trading category from available for sale will have what effect in earnings for the period.
An increase or decrease
| The unrealized holding gain or loss at the date of the transfer shall be recognized in earnings immediately.
395
If an investor exercise significant influence over financial and operating policies of the investee and they have under 20% ownership what method should be used?
Equity method
396
Available-for-sale securities are recognized on the balance sheet at what value?
Fair value
397
True or false: any related unrealized holding gains and losses are excluded from net income and reported as other comprehensive income if it is temporary.
True
398
True or false: any related unrealized holding gains and losses are excluded from net income and reported as other comprehensive income if it is not temporary.
False – only if temporary.
399
True or false: available for sale gains or losses that are not temporary should be written down to the fair value and the amount included in earnings.
True
400
Is yield a synonym for market rate?
Yes
401
Is par another term for face amount?
Yes
402
Is the present value based on the market rate of interest?
Yes
403
What amount is repaid to the owner of the bond at the end of its term?
The face amount of principal
404
What amount of cash interest is paid to the bond owner annually?
The coupon rate multiplied by the face – principal amount.
405
The value of owning a bond is the present value of what two rights?
The principal at end of bond term and the coupon rate of interest each year until then.
406
True or false:The present value of the principal at & of bond term and the coupon rate of interest each year until then is the value of the bond.
True
407
Under the equity method will investment in preferred stock result in dividend income?
Yes
408
Under the equity method will investment in common stock result in dividend income?
No, it will reduce the carrying amount of the investment and not included in the income.
409
If a bond is classified as either a trading or an available for sale item at what value is it carried on the balance sheet?
Both are carried at fair value
410
When does the company have a liability for dividends payable?
When the board declares a dividend
411
True or false: deferred revenue is a liability until the service has been performed.
True
412
Do serial bonds mature in installments?
Yes
413
Do debenture bonds mature in installments?
No
414
Do debenture bonds have a security interest in specific property?
Yes
415
To term bonds all mature together after a fixed term?
Yes
416
Is a troubled debt restructuring normally accomplished by modification of terms of the debt?
Yes
417
Is a troubled debt restructuring normally accomplished by issuance of an equity interest to the creditor by the debtor to satisfy fully or partially the debt?
Yes
418
Is a troubled debt restructuring normally accomplished by transfer from the debtor to the creditor of assets (e.g. real estate, receivables )to satisfy fully or partially the debt?
Yes
419
What type of bonds in a particular bond issuance will not all mature on the same date
Serial bonds
420
True or false: a debenture is an unsecured promissory note (Bond) to pay a specified amount on a specified date.
True
421
True or false: term bonds are bonds that are scheduled to be outstanding for a fixed period of time, or term.
True
422
True or false: a sinking fund is money regularly set aside for a specific purpose, usually to redeem outstanding bonds or preferred stock or to replace capital assets.
True
423
Is the amortization of discount of a note reported as interest expense?
Yes
424
Is pension cost interest reported as interest expense?
No
425
Is deferred compensation plan interest reported as interest expense?
No
426
Where is pension cost interest reported?
Pension expense
427
When the company interest rate is greater than the market rate bonds sell at a premium or a discount?
Premium
428
When the market rate is higher than the company rate Bonds sell at a premium or a discount?
Discount
429
The effect of interest rate for a long restructured and a troubled debt restructuring is based on what rate?
The original contractual rate
430
Are debenture bonds unsecured debt?
Yes
431
What is the journal entry to record treasury stock?
Debit treasury stock
| Credit cash
432
If a company acquires treasury stock for less than their book value what is the impact on total stockholders equity and the book value per comment share?
Decrease in total SE
| Increase in book value per share
433
If there's no reasonable basis for estimating the degree of collectibility what method of revenue recognition is best to use?
The installment method
434
Income recognized using the installment method of accounting generally equals cash multiplied by what?
Gross profit percentage
435
What is the gross profit percentage?
Gross profit/sales
436
What justifies the use of the cost recovery method of recognition for revenue?
There's no reasonable basis for estimating collectibility
437
What justifies the use of the installment method of revenue recognition?
There's no reasonable basis for estimating collectibility
438
What revenue recognition method would be used if there's no reasonable basis for estimating collectibility?
Either installment method or cost recovery method
439
Organization costs of $6000 at the beginning of the first year of operations would be amortized or expensed immediately according with GAAP?
Expensed immediately
440
Our accounting and legal fees part of general and administrative expenses?
Yes
441
Our officer salaries part of general and administrative expenses?
Yes
442
Our insurance expense part of general and administrative expenses?
Yes
443
Is freight in part of general and administrative expenses?
No
444
What type of expense is Freight in?
COGS
445
Is freight out part of general and administrative expenses?
No
446
Our sales representative salaries part of general and administrative expenses?
No
447
How is freight out expense classified?
Part of selling expenses
448
What type of expense is sales representative salaries?
Selling expenses
449
Is an overall description of the plan a required disclosure with the defined-benefit pension plan for a company?
No
450
Is the amount of pension expense by component a required disclosure with the defined benefit pension plan of the company
Yes
451
Is the weighted average discount rate a required disclosure with a defined benefit pension plan for a company?
Yes
452
Is the estimates of next years contributions a required disclosure of a defined benefit pension plan for a company?
Yes
453
What's the formula for the intrinsic method for options?
The excess of market price over the exercise price.
454
Interest cost included in the net pension cost recognized by an employer sponsoring a defined benefit pension plan represents what?
Increase in the projected benefit obligation due to the passage of time.
455
On what date is a public entity required to measure the cost of employee services in exchange for an award of equity interest based on the fair market value of the award?
The date of Grant
456
True or false: both the intrinsic value method and the fair market value method use the grant date to measure the cost for stock issued to employees.
True
457
Acquisition of goods or services from non-employees in exchange for equity instruments should be recorded at what value?
Fair value
458
Permanent differences between taxable income and pretax accounting income affect intraperiod or interperiod or both?
Neither
459
True or false: the assets/liability method of accounting for income taxes requires that deferred income taxes be based on the tax rates currently enacted for the future periods in which the temporary differences are expected to reverse.
True
460
True or false: the effect of the change on the deferred tax asset or liability at the beginning of the year of change should be included in income from continuing operations for the period that includes the enactment date.
True
461
What is the formula for a company's effective tax rate?
Total tax due/total income earned
462
Where does the noncontrolling interest appear on the balance sheet?
In the owners equity section
463
Under IFRS what measurement is allowed to estimate and report the liability for the cost of settling a lawsuit?
Only the best estimate to settle discounted to present value.
464
True or false: an entity is required to disclose a reconciliation of the numerators and denominators of the basic and deluded EPS computations
True
465
True or false: an entity is required to disclose the effect given to preferred dividends in income available to common shareholders.
True
466
True or false: an entity is required to disclose securities that could be diluted in the future that were excluded from the current periods diluted EPS because they were not dilutive.
True
467
Are the basic earnings per-share for income from continuing operations and for net income reported on the face of the income statement?
Yes
468
Would quoted prices for identical assets and liabilities in markets that are not active a level 2 observable input?
Yes
469
Are quoted prices for similar assets and liabilities in markets that are active be a level 2 observable input?
Yes
470
Would internally generated cash flow projections for a related asset or liability be a level 2 observable input?
No
471
Would interest rates that are observable at commonly quoted intervals be a level 2 observable input?
Yes
472
Would yield curves observable at commonly quoted intervals be a level 2 observable input?
Yes
473
Would implied volatilities be considered a level 2 observable input?
Yes
474
Would credit spreads be considered a level 2 observable input?
Yes
475
Would market – corroborated inputs be considered a level 2 observable input?
Yes
476
When is goodwill impaired?
When the carrying amount exceeds the goodwill's implied fair value
477
What is IFRS impairment test?
Excess caring value above recoverable amount.
478
What is IFRS recoverable amount?
The higher of the value of PV of discounted future cash flow or NRV.
479
What's the formula for NRV?
Sales proceeds less cost to sell.
480
Does IFRS use on discounted cash flow's to measure impairment loss?
No
481
Does GAAP use undiscounted future cash flow's to measure impairment loss?
Yes
482
Does IFRS use net realizable value for impairment tests?
Yes
483
Does IFRS use gross sale proceeds for impairment test?
No
484
Our capital leases or less sees tested for impairment?
Yes
485
Are long-lived assets of lessors subject to operating leases tested for impairment?
Yes
486
Are proved oil and gas properties that are being accounted for using the successful-efforts method of accounting tested for impairments?
Yes
487
Are long term prepaid assets tested for impairment?
Yes
488
Is the restoration of an impairment recognized?
No
489
After an impairment loss is recognized, the reduced carrying amount of the asset should be treated as?
The new cost
490
If an asset's carrying amount exceeds its FV but the estimated future cash flows are not less than the carrying value will an impairment loss be recognized?
No
491
Where are the cost of developing, maintaining, or restoring good will deducted?
They are deducted from income when incurred.
492
Are subsequent reversal of a previously recognized impairment loss of goodwill or other intangible assets prohibited in FASB?
Yes
493
Is depreciation modified when an asset has been determined to be impaired?
Yes
494
What's the book value after impairment?
Book value before impairment less the impairment equals new book value.
495
What is the initial test for determining whether an impairment of the carrying amount of a long-lived asset is indicated?
Carrying amount exceeds undiscounted future cash flows
496
When is a restoration of carrying value for long-lived assets permitted if an asset FV increases subsequent to recording an impairment loss?
Held for disposal (sale).
497
Our assets held for sale depreciable?
No
498
When can restorations of carrying value for long-lived assets be permitted?
When held for disposal.
499
Well issuing additional common stock increase or decrease equity?
Increase
500
How do Capital lease payments affect the statement of cash flows?
Outflow from the principal payment only
501
Assuming constant inventory quantities, which costing method will decrease inventory turnover in an inflationary economy?
FIFO
502
True or false: IFRS requires more footnote disclosure then GAAP?
True
503
Is a post dated check from a customer a cash equivalent?
No it is still a receivable.
504
Are accounts receivables cash equivalents?
No
505
What's the formula for number of days in current year operating cycle?
days sales inventory + # days sales in A/R
506
True or false; GAAP and I FRS account for treasury stock in the same manner.
False
507
True or false: IFRS uses different stock account titles then GAAP.
True
508
What account title does IFRS use for common stock?
Share capital
509
How does IFRS account for treasury stock retirements?
Only by charging an excess in purchase price and issue cost to paid-in capital.
510
Does both GAAP and IFRS use the term retained earnings?
Yes
511
Does IFRS use paid in capital to account for reevaluation property, plant, and equipment: mineral resources: and intangible assets?
No. IFRS uses a revaluation surplus.
512
Does IFRS use the same stock account titles as US GAAP?
No
513
Which is the most appropriate financial statement to use to determine if a company obtained financing during that year by issuing that or equity securities?
Statement of cash flows
514
True or false:under IFRS, if a company uses the functional method, it must disclose expenses by nature in the notes to the financial statement.
True
515
True or false: under IFRS, extra ordinary items are prohibited.
True
516
True or false: the IFRS definition of discontinued operations is more narrow than GAAP.
True
517
True or false: under IFRS, companies may classify expenses by either nature or function.
True
518
True or false: under IFRS, net income or loss is simply "income" or "loss."
True
519
Should the conversion of debt to equity be disclosed in the statement of cash flows?
Yes
520
What is EBIT?
Earnings before interest and taxes
521
What is EBITDA?
Earnings before interest taxes depreciation amortization.
522
What is the formula for times interest earned?
EBIT or EBITDA/interest expense
523
Formula for times preferred dividend ratio?
NI/PS Div
524
Formula for number of days sales in average inventory?
Days in the year/inventory turnover
525
Our cost in excess of billings on long term contracts current assets?
Yes
526
True or false: When receivables are sold with recourse, the entity has a contingent liability
True
527
True or false: a contingent liability is an obligation that has to be paid in the future.
True
528
True or false: the notes receivable discounted account must be increased by the face amount of the note when receivables are sold with recourse.
True
529
True or false: a note sold with recourse is a promise to pay the financial institution if the maker dishonors them note.
True
530
How does IFRS value inventory?
Lower of cost and NRV applied on item by item basis.
531
Estimates of price level changes for specific inventories are required for which inventory method?
Dollar value LIFO
532
Our trade discount included in the cost of finished goods inventory?
No
533
Is interest cost included in the cost of finished goods inventory?
No
534
Is manufacturing overhead included in the cost of finished goods inventory?
Yes
535
How do you calculate moving average unit cost?
Total cost/number of units
536
Could current cost financial statements report holding gains for goods sold during the period?
Yes
537
Could current cost financial statements report holding gains on inventory at the end of the period?
Yes
538
True or false: holding gains for cost of goods sold are realized?
True
539
True or false: holding gains for inventory on hand at the end of the period are unrealized.
True
540
True or false: Holding gains for cost of goods sold are in realized?
False
541
True or false: holding gains for inventory on hand at the end of the period are realized.
False
542
Should insurance premium for consignment goods shipped to consignee be included in the inventory costs?
Yes
543
If beginning inventory is understated will the cost of good sold be understated are overstated?
Understated
544
If the ending inventory is overstated with the cost of good sold be understated or overstated?
Understated
545
If goods are excluded from ending inventory what effect does the omission have on assets and retained earnings at year-end?
Both are understated
546
True or false: In an installment sale revenue is not recognized at the time of sale.
True
547
True or false: in an installment sale, revenue is recognized as the cash installment payments that are received following the sale.
True
548
True or false: in an installment sale, the only revenue recognize at the time of sale would be that related to any down payment.
True
549
True or false: the cost recovery method treats the first dollars received as recovery of cost.
True
550
According to the installment method of accounting, gross profit on an installment sale is recognized in income how?
In proportion to the cash collection.
551
Income recognize using the installment method of accounting generally equals cash collected multiplied by?
Gross profit percentage
552
True or false: where receivables are collectible over an extended period of time and there is no reasonable basis for estimates of the degree of collectibility either the installment method or the cost recovery method of accounting may be used.
True
553
Is the transportation to consignees a part of cost of good sold?
Yes
554
Is the evacuation for the basement included in the cost of land or building?
Building
555
Does the cost of land include legal fees, commissions, and title insurance for acquisition?
Yes
556
Does the cost of land include the cost of preparing the land such as surveying, grading, filling, draining, and clearing?
Yes
557
Does the cost of land include the cost of tearing down an existing building to prepare the land for use?
Yes
558
What's the salvage value?
Fair value at end of asset life
559
What is the appropriate accounting treatment for interest on construction financing incurred after completion of construction?
Expense
560
What is the appropriate accounting treatment for interest on construction financing incurred during completion of construction?
Capitalize and depreciate
561
T or F: Salvage value is not used in the depreciation formula for double declining.
True
562
How many years are leasehold improvements amortized?
The term of the lease or the improvements only useful life, which ever is shorter.
563
Does the carrying amount of the assets include the salvage value?
Yes
564
What is the double declining rate?
200% times the straight-line percentage rate
565
What's the straight-line rate for a five-year life?
1/5 = 20%
566
True or false: group depreciation applies an average rate to an entire group of similar assets
True
567
True or false: composite depreciation applies an average rate to an entire group of dissimilar assets.
True
568
Do both group depreciation and composite depreciation use the straight-line depreciation method?
Yes
569
If an expenditure benefits periods other than the current period should the expenditure be capitalized?
Yes
570
Is salvage value included in the calculation for the 200% declining balance depreciation method?
Yes
571
Is the salvage value subtracted in the calculation for units of production depreciation method?
Yes
572
True or false: a company using the equity method to account for an investment does not recognize dividends received is revenue.
True
573
When the final settlement of a retiring partner's interest exceeds their capital balance, how is this accounted for under the bonus method?
It reduces the capital balances of the other partners.
574
Are the organization costs at the beginning of the first year of operations expensed or amortized?
Expensed
575
Are the organization costs considered start up costs?
Yes
576
The discount resulting from the determination of a note payable's present value should be reported on the balance sheet as?
A direct reduction from the face amount of the note.
577
Does the effect of a stock dividend change the number of shares held?
Yes
578
Does the effect of a stock dividend change the carrying value per share?
Yes
579
Does the total carrying value remain unchanged from a stock dividend?
Yes
580
Does the total carrying value change from a stock dividend?
No
581
True or false: disclosure of information about significant concentrations of credit risk is required for all financial instruments.
True
582
Are unrealized holding gains and losses for trading securities included in earnings?
Yes
583
Are trading securities recognized on the balance sheet at fair value?
Yes
584
Should the entire balance in a sinking fund account appear is a non-current asset?
Yes
585
Unrealized losses from investments classified as available for sale should be included in other comprehensive income or net income?
Other comprehensive income
586
Does the correction of an error in financial statements of a prior period affect income of the current period?
No
587
If bonds are converted for common stock, and the company uses the book value method of accounting for the conversion,what will the results be for the company?
Stockholders equity is increased.
588
When the bondholder decides to sell before they mature, how will the bond be classified?
Trading or available-for-sale.
589
Is a trading or available for sale item carried at fair value on the balance sheet?
Both are carried at fair value
590
True or false:
| initial cost of stock + %share of income - %share of dividends = carrying amount of investment.
True
591
When property other than cash is invested in a partnership, at what amount should the non-cash property be credited to the contributing partners capital account?
Fair value at the date of contribution.
592
Under the equity method how much of invested stock is reported on the income statement?
3% of reported income for the year.
593
When a company changes their investment from 10% to 40% in the middle of the year, how much of the year uses the equity method?
The whole year
594
The basis for defining the governmental financial reporting entity is?
Public accountability
595
True or false: the SEC is leading the IFRS adoption in the United States for publicly traded entities.
True
596
True or false: currently adoption of IFRS in not-for-profit voluntary health and welfare entities is not required.
True
597
T or F: According to FASB accounting standards codification, the financial statements of a not-for-profit entity focus on the entity as a whole.
True
598
What financial categories are used in a non-governmental not-for-profit entity's statement of financial position?
Assets, liabilities, and net assets
599
Are Grants to other organizations included in total expenses for a not-for-profit entity?
Yes
600
Is depreciation included in total expenses for a not-for-profit entity?
Yes
601
True or false: contribution revenues from gifts, grants, and bequest are reported in the. They are unconditionally promised or received, whichever is earlier.
True
602
Would gifts and contributions be considered operating revenues for not for profit hospitals?
No
603
The transfer of financial assets that does not meet criteria for a sale should be accounted for as?
Secured borrowing
604
True or false: subsequent events take place after the formal balance sheet date.
True
605
True or false: subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are issued or are available to be issued.
True
606
What information is included in total net assets in the statement of financial position for a non-governmental not-for-profit organization?
Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
607
How should a non-governmental, not-for-profit entity report donor restricted cash contributions for long-term purposes and it statement of cash flow's?
Financing activity inflow
608
Unconditional contributions wether promised or received as cash, are recognized as revenue when?
In the period received
609
How are contributions revenue measured?
Fair value
610
Are donor intentions to give considered revenue?
No
611
Are donor unconditional promises considered revenue?
Yes
612
Are membership dues considered functional expense for a non-governmental not-for-profit entity
No
613
Is fund-raising categorized as functional expense for a non-governmental not-for-profit entity?
Yes
614
Is Grant expenses categorized as functional expense for a non-governmental not-for-profit entity?
No
615
Is membership development categorized as functional expense for a non-governmental not-for-profit entity?
No
616
Are professional fees categorized as functional expense for a non-governmental not-for-profit entity?
No
617
Is program services categorized as functional expense for a non-governmental not-for-profit entity?
Yes
618
Is management and general categorized as functional expense for a non-governmental not-for-profit entity?
Yes
619
Is fundraising categorized as functional expense for a non-governmental not-for-profit entity?
Yes
620
What are the functional categories for expense reporting by a private not-for-profit?
Program services and supporting services
621
True or false: for private not-for-profit, within the supporting service category, specific subcategories are management & general activities, fundraising activities, and membership development activities.
True
622
In a non-governmental not-for-profit entity, when assets are released from restriction does the unrestricted category of net assets increase or decrease?
The unrestricted category of net assets increased
623
True or false: in a non-governmental not-for-profit entity, when assets are released from restriction, the unrestricted category of net assets increases as the temporarily restricted category decreases.
True
624
If a charity receives equity securities as an unrestricted gift, and during the year the fair value increases and dividends are received how does this affect the net assets?
Net assets are increased by the dividends received and the fair market value increase.
625
True or false: the basic financial statements for a not for profit entity are statement of financial position like a balance sheet, statement of activities, statement of cash flows and for voluntary health and welfare entities a statement of functional expenses.
True
626
How should unconditional promises to give received by a non-governmental not-for-profit entity that will be collected over more than one year be reported?
Contributions receivable, valued at their present values.
627
When a private not-for-profit receives a donation with conditions to match funds within the next 12 months how should this donation be accounted for?
As a liability called refundable advance
628
Is an endowment a net asset class for not-for-profit entity's?
No
629
The three categories of net assets reported for non-governmental not-for-profit entities are?
Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
630
True or false: in a not-for-profit entity, the donation of a professional service that would otherwise have to pay out cash for, is reportable as a donation and would increase unrestricted revenues, gains, and other support. It would also increase expense.
True
631
True or false: NFPs should not record an expense for estimated uncollectible promises when promises to give our initially recognized.
True
632
True or false: FASB allows NFPs to use the fair value at the date a promise to give securities was initially recognized even if the contribution will not take place for several years.
True
633
True or false: when promises to give cash are initially recognized by NFPs they could be based on the present value of estimated future cash flows.
True
634
T or F: NFPs create allowance for uncollectible promises or contributions but do not recognize bad debt expense as a business does.
True
635
True or false: all expenses for not-for-profit entities must be reported as decreases, or changes, in unrestricted net assets.
True
636
How should operating expenses for a non-governmental NFP entity be reported?
Change in unrestricted net assets
637
Are the salaries of staff researchers involved in research for NFP classified as supporting activities?
No, they're classified as program expenses.
638
Should the salaries of fundraisers for funds used in research of NFP be classified as supporting activities?
Yes
639
Should the cost of equipment involved in research for an NFP be classified as supporting activities?
No, it's classified as program expenses.
640
Should the cost of laboratory supplies used in research be classified as supporting activities for NFP?
No, they are program expenses.
641
Is the statement of comprehensive income used in a NFP?
No
642
Under what category in the statement of cash flows would cash contributions of 200,000 to be restricted to acquisition of property for NFA go?
Financing activities
643
What section of the statement of cash flows for NFP would unrestricted cash contributions to 500,000 go?
Operating activities
644
How should unconditional promises to give received by a non-governmental NFP that will be collected over more than one year be reported?
Contributions receivable, valued at their present values
645
T or F: when resources are used according to donor limitations, assets are released from restriction.
True
646
NFP Endowments that must be maintained in perpetuity are classified as?
Permanently restricted revenues
647
What is the primary purpose of the statement of activities of a non-governmental NFP organization?
To report the change in net assets for the period.
648
For a NFP how is a cash contribution to be used at the Board of Directors discretion classified?
Unrestricted revenue
649
For an NFP how is a promise to contribute $$$ from a supporter who made similar contributions in prior periods classified?
Temporarily restricted revenue
650
For a NFP, how are contributed legal services with a value of $100,000 which would have otherwise been purchased classified?
Unrestricted revenue
651
A non-governmental NFP statement of activities is similar to what for-profit financial statement?
Income statement
652
Regardless of whether reporting federal grant revenue at the fund or entity wide level the basic recognition criteria is?
When all eligibility requirements are met.
653
Property taxes and fines represent which class of nonexchange transactions for governmental units?
Imposed nonexchange revenues
654
Taxes assessed on exchange transactions such as Texon hotel charges, sales tax, personal and corporate income tax, and motor fuel taxesI called what kind of revenues?
Derived tax revenues
655
What type of governmental revenue is property tax and fines?
Imposed not exchange revenue
656
What are the four categories of non-exchange revenues?
Derived tax revenue
Imposed nonexchange revenue
Gov mandated nonexchange trans
Voluntary nonexchange trans
657
Net investment in capital assets is calculated as?
Total cap assets less deprec & o/s mortgage or bonds reduced by any significant unspent proceeds.
658
The city of Smith enters into securities lending transactions. The cost of these transactions should be reported as?
Expenditures or expenses in the operating statement.
659
T or F: the general fund, as a governmental fund, is accounted for from the current financial resources perspective.
True
660
T or F: capital assets & revaluations of capital assets are reported in the general fund.
False
661
T or F: in government wide statements, impairments are a revaluation of a capital asset that's reported as expense in the statement of activities.
True
662
Are deferred revenue the same as on unearned revenue?
Yes
663
In a debt service fund's statements, how are cash receipts and cash payments reported?
Cash receipts: operating transfers
| Cash payments: expenditures
664
What is the purpose of a debt service fund?
To make the required payments on the debt.
665
If determining the actual historical cost of general infrastructure assets is not practical because of inadequate records, how should public institutions reporting as special purpose governments report for Major General infrastructure assets?
Estimated historical cost
666
When a snowplow purchased by a governmental unit is received, it should be recorded in the general fund as what?
An expenditure
667
T or F: only the general fund can have an unassigned fund balance.
True
668
Billings to departments within the same government are considered interfund services provided and used. What's the typical journal?
Debit receivable and credit operating revenue
669
T or F: if an item is not classified as restricted or a capital asset, then it is unrestricted.
True
670
A city Council designates funds in the enterprise fund for future equipment replacement. The enterprise fund should report this as?
An unrestricted component of net position.
671
In preparing combined financial statements for a governmental entity, interfund receivables and payables should be reported as?
Amounts due to and from other funds
672
What are appropriations?
An account created as a restriction of revenues.
673
What are encumbrances?
Similar to a purchase order, specifically designates funds for a specific future purchase of goods or services.
674
What are expenditures?
Can be for capital or revenue items and means an outflow of resources, usually money.
675
When a capital lease entered into by a governmental unit represents the acquisition of a general capital asset, the acquisition should be reflected as?
Both an expenditure and an other financing source. It's a wash entry that has no effect on Fund balance.
676
Fixed assets donated to a governmental unit should be recorded at?
Estimated fair value when received.
677
ABC city records it compensated absences liability as a general government liability. The salary rate used to calculate the liability should normally be the rate in effect when?
At the balance sheet date.
678
Is the transfer of 200,000 from the general fund to establish a new enterprise fund a reciprocal interfund activity or a nonreciprocal interfund activity?
Nonreciprocal interfund activity
679
Is a routine transfer of 50,000 from the general fund to the debt service found a reciprocal interfund activity or a non-reciprocal interfund activity?
Nonreciprocal interfund activity
680
Is the billing by the internal service fund to a department finance by the general fund for services rendered in the amount of 5000 a reciprocal interfund activity or a nonreciprocal interfund activity?
A reciprocal interfund activity
681
How is the contribution of enterprise fund capital by the general fund reported?
Other financing uses
682
How is the transfer from the general fund to a capital projects fund reported?
Other financing uses
683
How is an operating subsidy transfer from the general fund to an enterprise fund reported?
As other financing uses
684
Are routine employer contributions from the general fund to a pension trust fund an expenditure of a governmental unit's general fund?
Yes
685
Operating transfers received by a governmental fund should be reported in the statement of revenues, expenditures, and changes in Fund balance as?
An other financing sources
686
T or F: the cost of electricity used is an expenditure regardless of whether the supplier of the electricity is part of the same government or an independent supplier.
True
687
T or F: the portion of fund balance that reflects equity for amounts that cannot be spent because they are not in spendable form would be termed non-spendable.
True
688
T or F: committed fund balance would result from an action of the highest level of the government and assigned fund balance would reflect action by government designee.
True
689
Are supplies inventory not spendable?
Yes
690
Are prepaid expenses not spendable?
Yes
691
T or F: restrictions of fund balance would reflect specific purposes externally imposed by creditors, grantors, or enabling legislation.
True
692
What effect would write off of receivables during the year have on equity?
No effect to the extent of the allowance made previously.
693
Are both extraordinary and special items defined as unusual and in frequent in nature?
Yes, However special items are significant transactions under management control.
694
What is the major difference between an exchange transaction and a non-exchange transaction for governmental units?
The relationship between the amount of value given and received.
695
Are property taxes an example of imposed nonexchange revenue for a governmental entity?
Yes
696
The government wide statement of activities explains changes in what?
Total net position
697
When state and local governments receive revenues from all types of taxes, these revenues are classified as?
Generally revenues
698
True or false: programs are financed with program revenues and general revenues.
True
699
Are all taxes general revenues?
Yes
700
T or F: all revenues are general revenues unless they are required to be reported as program revenues.
True
701
Which format must an enterprise fund use to report cash flow operating activities in the statement of cash flows?
Direct method
702
Which format must a not for profit and for-profit entities use to report cash flow operating activities in the statement of cash flows?
Either the indirect or the direct method
703
T or F: GASB requires government disclosure of principal and interest requirements to maturity, presented separately, for each of the five subsequent fiscal years and in five year increments thereafter.
True
704
Would fiduciary activities be included when governmental fund financial statements are converted to government wide financial statements?
No
705
Are the statement of activities of the government wide financial statements designed primarily to provide information to assess operational accountability?
Yes
706
Is agency, private purpose trust, and pension trust all fiduciary funds?
Yes
707
Do government wide financial statements report the information that is included in the fiduciary funds?
No
708
Should interest expense on general long-term debt be reported in the government wide statement of activities?
Yes
709
Does the debt service fund report the payment of interest on the governments general long-term debt?
Yes
710
Should debt service fund be reported as part of local government's governmental activities column in it's government wide statements?
Yes
711
Is agency fund reported in government wide statements?
No
712
Is private purpose trust fund reported in government wide statements?
No
713
Is pension trust fund reported in government wide statements?
No
714
T or F: government should only present that information needed to support their analysis of financial position and results of operations prescribed by GASB for MD&A
True
715
T or F: Government should present any information they believe is needed to support their analysis of financial position and results of operations for MD&A.
False
716
What are the three sections of the CAFR (comprehensive annual financial report)?
Introductory, financial, and statistical.
717
What is an entity-wide audit meeting specific federal guidelines for entities that receive and expend certain federal grants or other resources?
A single audit
718
How should interest received on long-term investments for an enterprise fund be reported on the statement of cash flows?
Investing activities
719
How should development agency loans and the related cash flow and interest received that was provided to businesses be classified on the cash flow statement?
Operating activities
720
True or false: the statistical section of a government comprehensive annual financial report (CAFR) is always considered part of required supplementary information (RSI).
True
721
The government wide financial statements consists of ?
A statement of net position and a statement of activities.
722
At leased capital assets reported in government wide financial statements?
Yes
723
When state and local government revenues are received from charges to users for services provided, these revenues are classified as?
Program revenues
724
Are charges for services always program revenues on a local governments government wide statement of activities?
Yes
725
What are charges for services on a local government's government wide statement of activities reported as?
Program revenues
726
What are taxes on a local government's government wide statement of activities reported as?
General revenues
727
True or false: the letter of transmittal is specified as part of the introduction section of a CAFR.
True
728
Cash receipts from grants and subsidies to decrease operating deficits should be classified in which section of the statement of cash flows for governmental not-for-profit entities?
Non-capital financing
729
If an enterprise fund received interest on long-term investments, how would the amount be reported on the statement of cash flows?
Investing activities
730
The basic financial statements of a general purpose government should include?
Government wide financial statements, fund financial statements, and the notes to the financial statements.
731
The minimum requirements for general purpose External financial statements are?
Government wide and fund financial statements, notes to the financial statements, MD&A, and RSI other than MD&A.
732
True or false: General long-term liabilities should be reported in the governmental activities column in the government wide statement of net position.
True
733
True or false: the noncurrent portion of capital leases financed by the general government is reported as general long-term liability.
True
734
Do governmental funds and proprietary funds require a statement of revenues and expenditures?
Yes
735
To fiduciary funds require a statement of revenues and expenditures?
No
736
Is the MD&A a component of the required supplemental information?
Yes
737
MD&A is classified as?
RSI
738
True or false: government should only present that information needed to support their analysis of financial position and results of operations prescribed by GASB.
True
739
True or false: depreciation of general capital assets, including infrastructure capital assets, should be reported by function.
True
740
True or false: depreciation is not taken on infrastructure assets accounted for using the modified approach.
True
741
True or false: depreciation on general capital assets, including infrastructure, is always required.
False
742
True or false: General capital assets, including infrastructure capital assets, should be reported at known or estimated historical cost less any accumulated depreciation.
True
743
True or false: capital asset purchases would be considered expenditure reductions of governmental fund balances and would be added back in preparing the reconciliation to government wide stmt of activities.
True
744
Would Payment of long-term debt principal be considered expenditure reductions of governmental fund balances and be added back in preparing government wide reconciliation?
Yes
745
An unrestricted Grant received from another government to support enterprise fund operations should be reported as?
Non-operating revenues
746
True or false: proprietary funds of governments, including enterprise funds, report unrestricted grants and restricted operating grants as nonoperating revenues.
True
747
True or false: restricted capital grants are reported as capital contributions.
True
748
True or false: neither contributed capital nor expenditures are reported for proprietary funds.
True
749
True or false: a statement of cash flows should be presented for proprietary funds only for a governmental entity.
True
750
True or false: the statistical section of a government comprehensive annual financial report is always considered part of RSI.
True
751
True or false: the statistical section is not part of the basic financial statements.
True
752
In the government wide financial statements, what is the correct revenue classification of fines and forfeitures?
Charges for services
753
Are enterprise funds a proprietary fund?
Yes
754
Are internal service funds a proprietary fund?
Yes
755
True or false: special purpose governments engaged only in business type activities such as utilities are required to report financial statements required for proprietary funds such as enterprise funds, including MD&A and RSI.
True
756
What are the three sections of CAFR?
Introductory, financial, and statistical
757
True or false: a summary reconciliation between fund financial statements and government wide financial statements is required at the bottom of the fund statements or in an accompanying schedule.
True
758
For the governmental activities portion of the government wide statement of net position, the reconciliation should tie with the fund balances of?
All governmental and internal service funds that provides services to the governmental functions.
759
How was the internal service fund categorized?
Reported as governmental activity in the government wide financial statements.
760
The letter of transmittal and the statistical section are classified as?
Other
761
Is the letter of transmittal included in the introductory section of CAFR?
Yes
762
True or false: the combining fund statements are part of the comprehensive financial report but not part of the basic financial statements.
True
763
Are the details of the aggregation of nonmajor funds shown in the combining fund statements?
Yes
764
Where can you find the combining fund statements?
Financial section of CAFR
765
In discussing the disclosure required by the FASB section on risks and uncertainties, what element is identified as important in determining the matters that are significant to a specific entity?
Selectivity
766
The primary subject discussed in FASB's topic of risk and uncertainties is?
Disclosure
767
What income tax rate should be used to report each quarter income tax expense?
The estimate of the effective tax rate expected for the annual period.
768
Should inventory loss is generally be recognized in the interim statements?
Yes
769
If inventory losses recognized in early periods are recovered in the same year, how is this handled?
Such recoveries are recognized as gains but should not exceed previously recognize losses.
770
Our temporary expected fluctuations in inventory reported in the interim financial statements?
No
771
True or false: extra ordinary items should be recognized totally in the period in which they occur.
True
772
True or false: cost not directly associated with interim revenues such as property taxes are allocated equally.
True
773
How does FASB conclude that interim financial reporting be viewed?
As reporting for an integral part of an annual period.
774
True or false: the current year effective annual tax rate is used for interim reports.
True
775
How are discontinued operations and extraordinary items that occur at midyear initially reported?
Included in net income and disclosed in notes to interim FS
776
True or false: mandatorily redeemable financial instruments must be presented as liabilities.
True
777
True or false: obligations to re-purchase the issuer's equity shares by transferring assets must be presented as liabilities.
True
778
True or false: certain obligations to issue a variable number of shares must be presented as liabilities.
True
779
Is cumulative preferred stock considered a liability?
No
780
Is convertible stock considered a liability?
No
781
Is common stock issued at a discount considered a liability?
No
782
Is an unconditional redemption feature on stock report is a liability?
Yes
783
What are the components of the lease receivable for a lessor involved in a direct financing lease?
The minimum lease payments plus residual value
784
If the lease term on the building is 75% or more of the asset life, would it be capitalized?
Yes
785
If the present value of lease payments on a building equals or exceeds 90% of fair value of the asset, would the building be capitalized?
Yes
786
How are nonlevel lease payments expensed?
On a straight line basis
787
If a capital lease is modified to be classified as an operating lease how should the company account for the modified lease?
Sale – leaseback
788
In a sale – leaseback transaction, a gain resulting from the sale should be deferred at the time of the sale – leaseback and subsequently amortized when?
When the seller – lessee retains the right to substantially all of the remaining use of the property.
789
When should a lessor recognize in income a nonrefundable lease bonus paid by a lessee on signing an operating lease?
Over the life of the lease
790
When is the implicit rate required in a lease?
When it can be determined and when it is less than the less he is incremental rate.
791
For a capital lease, the amount recorded initially by the lessee as a liability should normally be?
Equal the present value of the minimum lease payments at the beginning of the lease.
792
At the inception of a capital lease, the guaranteed residual value should be?
Included as part of minimum lease payments at present value.
793
An enterprise must separately report information about an operating segment when the segments revenue meets what minimum percentage of the combined revenue of all reported operating segments?
10 %
794
When is disclosure required by publicly held companies when revenues are derived from sales to a single customer or export sales?
If 10% or more of total revenues are derived from both sales to a single customer and export sales.
795
What type of entities are required to report on business segments?
Publicly traded Enterprises
796
When is equipment used for research and development capitalized and depreciated?
Only equipment that has alternative use for future.
797
Are costs incurred after commercial production has begun research and development costs?
No
798
Is the legal work in connection with patent applications or litigation considered R & D?
No
799
Is the sale of licensing or patents considered research and development costs?
No
800
When a non-monetary exchange lacks commercial substance how is the asset measured?
At its book value before the exchange Plus any cash paid.
801
How is a non-monetary exchange generally measured?
On the fair market value of the assets exchanged.
802
Does FASB require reconciliation of reportable segments CL to consolidate enterprise information?
No
803
For the purpose of determining that no additional segments should be reported, the total of eternal revenues of all reportable segments must make up at least what percentage of total consolidated revenues?
75%
804
Is the depreciation on equipment with alternative uses included in research and development costs?
Yes
805
How should excess appraised value be reported in a business combination that is accounted for as an acquisition?
As an extraordinary gain
806
True or false: voluntary changes in accounting principle such as from FIFO to weighted average be recognized using the retrospective approach, in which the cumulative effect is reported as an adjustment of the beginning of your retained earnings of the earliest you're presented.
True
807
Is rent expense required to be disclosed for reportable segments?
No
808
For a property dividend, the excess of the merchandise carrying amount over its market value should be reported as?
Reduction in income before extra ordinary items.
809
True or false: when software costs are capitalized, yearly amortization of these costs is based on the greater of the ratio of current sales to expected total sales or the straight-line method over the useful life of the asset.
True
810
What is the excess of acquisition price over fair value of net assets?
Goodwill
811
Is marketing research included as research and development costs?
No
812
True or false: losses for non-monetary assets exchanges are recognized immediately.
True
813
The main issue in determining commercial substance is?
Whether the entities future cash flow's are expected to significantly change
814
Where is an extraordinary item reported?
Before any cumulative effect of accounting changes and after discontinued operations.
815
What is the maximum number of reportable segments?
10
816
Are royalties paid to a major stockholder as consideration for patents purchased from the shareholder a related party transaction?
Yes
817
On what accounting basis does the GASB recommend governmental fund budgets be prepared?
Modified accrual
818
Is the modified accrual basis of accounting used in capital projects fund?
Yes
819
Is the modified accrual basis of accounting used in General fund?
Yes
820
Is the modified accrual basis of accounting used in special revenue?
Yes
821
Is the modified accrual basis of accounting used in debt service?
Yes
822
Is the modified accrual basis of accounting used in permanent funds?
Yes
823
How should a non-governmental not-for-profit entity report depreciation expense in its statement of activities?
It should be included as a decrease in on restricted net assets.
824
Monies held in trust for the benefit of parties who are not a part of government are accounted for in which type of fund?
Private purpose trust funds
825
True or false: the general fund records expenditures rather than expenses.
True
826
Is the fund balance and FundBalance reserved for encumbrances balance sheet accounts?
Yes
827
The appropriations included in the adopted budget of the general fund represent what?
The maximum authorized for expenditure during the period.
828
Does an amount that has been encumbered mean in an amount that has been committed?
Yes
829
True or false: the revenues control account of a governmental unit is increased one property taxes are recorded.
True
830
Which funds of a governmental unit records depreciation?
Internal service fund
831
Is the internal service fund a proprietary fund?
Yes
832
Are capital assets and depreciation expense recorded in the capital projects fund?
No
833
Are capital assets and depreciation expense recorded in the debt service fund?
No
834
Our capital assets and depreciation expense recorded in the special revenue fund?
No
835
The language describing funds as providing goods and services on a cost reimbursement basis applies to what type of funds?
Internal service funds
836
If pricing policies of the activity establish fees and charges designed to recover costs what type of fund must be used?
Enterprise fund
837
When the activity is financed with debt that is secured solely by a pledge of the net revenues from fees of the activity what type of fund must be used?
Enterprise fund
838
When laws require that the cost of providing services be recovered with fees and charges, rather than with taxes, what type of fund must be used?
Enterprise fund
839
When goods or services are provided on a cost reimbursement basis what type of fund must be used?
Internal service funds
840
True or false: escheat property held for another governmental entity should only be reported in an agency fund when the holding period is expected to be short.
True
841
True or false: escheat property held for another governmental entity should only be reported in an agency fund if the assets are not required to be reported elsewhere.
True
842
True or false: escheat property held for another governmental entity should only be reported in an agency fund if the unclaimed property ultimately reverts to another government.
True
843
Escheat property held for another government should be reported as?
An asset in a private purpose trust fund or an agency fund as appropriate, or in the governmental or proprietary fund in which the escheat property is otherwise reported.
844
True or false: an entity exempt from federal taxation may not be a governmental organization.
True
845
T or F: The characteristic of body corporate impolitic may only be a governmental organization.
True
846
T or F: The characteristic of power to enact and enforce a tax levy may only be a governmental organization.
True
847
The billings for transportation services provided to other governmental units are recorded by the internal service fund as?
Operating revenues
848
What are other financing sources used to record for governmental funds?
Operating transfers
849
How is interest in miscellaneous revenue report it for governmental funds?
Non-operating revenues
850
Is transportation appropriations a budgetary account?
Yes
851
Are deferred revenues a liability like on revenue?
Yes
852
In governmental accounting, expenditures should be recorded in a multiple classification scheme typically by?
1. Fund
2. Function or program
3. Organizational unit (dept)
4. Activity
5. Character
6. Object (of expenditure)
853
The expenditure element "salaries and wages" is an example of which type of classification?
Object
854
Are budgetary comparison statements listed among the items to be included in MD & A?
No
855
T or F: Governments with significant budgetary original and final differences are required to present budgetary comparison schedules as RSI.
True
856
If the gov. budgetary original and final differences do not significantly differ, are they required to present budgetary comparison schedules as RSI?
The budgetary comparisons may be included in the basic financial statements or RSI.
857
Are special revenue funds classified as governmental funds?
Yes
858
Are general fund, special revenue fund, capital projects funds, debt service funds and permanent funds classified as governmental funds?
Yes
859
Are enterprise funds a type of proprietary fund?
Yes
860
Are investment and pension trust funds types of fiduciary funds?
Yes
861
Do investment and pension trust funds use the accrual basis of accounting?
Yes
862
True or false: fiduciary funds include pension trust funds, investment trust funds, private purpose trust funds and agency funds.
True
863
How is an encumbrance recorded?
```
Debit encumbrances (budgetary account)
Credit appropriations control
```
864
True or false: an enterprise fund is a proprietary fund. Fees are charged to external users and requires that all costs are recovered from the fees.
True
865
Sure false: a permanent fund is a governmental fund used to hold resources held by the government that are restricted such that only earnings maybe used.
True
866
True or false: a special revenue fund is a government fund used to track resources that are limited as to use.
True
867
True or false: and internal service fund is a proprietary fund whose activities are limited to providing services to other funds and departments within the government.
True
868
True or false: governmental accounting is only required to have one fund, the general fund. Other funds can be added to meet budgetary and legal requirements.
True
869
True or false: fund accounting is used by governmental units with resources that must be segregated for the purpose of carrying on specific activities or attaining certain objectives.
True
870
True or false: a fund is composed of a self balancing set of accounts.
True
871
Where should receipts from a special tax levy to retire and pay interest on general obligation bonds be recorded?
Debt service fund
872
The governmental fund measurement focus is on the determination of?
Flow of financial resources
873
True or false: financial statements for governmental funds should be prepared and presented utilizing the flow of current financial resources measurement focus.
True
874
True or false: an organization is normally considered a governmental organization if a controlling majority of the members of its governing board are appointed by state government officials.
True
875
Do temporary transfers affect internal service funds net income?
No
876
Do residual equity transfers affect an internal service fund's net income?
Yes
877
Does depreciation expense on its fixed assets affect an internal service fund's net income?
Yes
878
Do operating transfer sources affect an internal service fund's net income?
Yes
879
Does the fiduciary funds of a government include pension trust funds and agency funds?
Yes
880
What are the four types of fiduciary funds used in governmental accounting systems?
1. Pension trust funds
2. Investment trust funds
3. private purpose trust funds
4. Agency funds
881
What measurement focus and basis of accounting does enterprise fund use?
The economic resources measurement focus and accrual basis accounting
882
What measurement focus and basis of accounting does debt service use?
Current financial resources measurement focus and modified accrual basis of accounting
883
What measurement focus in basis of accounting to capital projects use?
Current financial resources measurement focus and modified accrual basis of accounting.
884
What measurement focus and basis of accounting does special revenue use?
Current financial resources measurement focus and modified accrual basis of accounting.
885
Do general funds have the income determination orientation?
No
886
Do fiduciary funds have the income determination orientation?
No
887
What is the measurement focus of the general fund and other governmental type funds?
Flow of current financial resources
888
What is the measurement focus of trust funds including fiduciary funds?
Economic resources
889
Is net income determined for governmental or fiduciary fund types?
No
890
Which account should Spring Township credit one issue the purchase order for supplies?
Reserve for encumbrances
891
When encumbrances do not result from action at the highest level of government how are they showing on the balance sheet as?
Assigned
892
When encumbrances result from action at the highest level of government how are they showing on the balance sheet?
Fund balance – committed
893
What fund type refers to situations in which a government is not obligated in any manner for the repayment of special assessment debt, but merely acts as a collection and disbursement agent on behalf of the property owners within a special assessment benefit district?
Agency fund
894
True or false: an enterprise fund is a proprietary fund that uses the economic resources measurement focus and accrual accounting.
True
895
Unless required to be reported elsewhere, how should Escheat property held for a short period of time for another governmental entity, be reported?
As an asset in an agency fund, offset by a liability
896
When should escheat property held for another government be reported as an asset in a private purpose trust fund?
When principal and income are reported.
897
When should as cheap property held for another government be reported as an asset in an agency fund?
When resources are held by the reporting government temporarily in a purely custodial capacity.
898
True or false: the agency fund accounting equation is assets = Liabilities.
True
899
Do encumbrances affect actual asset, liability, revenue, or expenditure accounts?
No
900
True or false: encumbrances reflect the estimated cost of goods and services recorded in the encumbrances account temporarily from the time an order is approved until the goods or equipment orders are received and recorded as actual expenditures against the appropriations.
True
901
The governmental fund statements are based on modified or accrual accounting?
Modified approval basis of acctg
902
Are the government wide statements based on modified or accrual accounting?
Accrual
903
What are the two financial statements required for fiduciary funds?
Statement of fiduciary net position and statement of changes in fiduciary net position.
904
True or false: agency funds should not be reported in the statement of changes in fiduciary net position.
True
905
Where are the capital assets resulting from the activities of a special revenue phone, capital projects fund, or permanent fund be reported?
They are reported as assets in the governmental activities column of the government wide statement of net position.
906
Where is the depreciation of capital assets reported in an enterprise fund?
In the expenses recorded as part of fund activity.
907
The orientation of accounting and reporting for all proprietary funds of governmental units is?
Income determination
908
A municipality that uses modified accrual and encumbrance accounting would use the general fund to account for?
Property tax revenues
909
Major construction activities would be accounted for in which funds?
Capital projects funds
910
Payment of interest and principal on tax supported debt would normally be accounted for in?
Debt service fund
911
Revenues from earmarked sources to finance designated activities would be accounted for in?
Special revenue fund
912
True or false: the economic resources measurement focus and the accrual basis of accounting are used for proprietary funds and fiduciary funds.
True
913
True or false: proprietary funds consist of enterprise and internal service funds.
True
914
Do both enterprise and internal service funds use accrual accounting?
Yes
915
Is the pension trust fund a fiduciary fund?
Yes
916
Do fiduciary funds use the accrual basis of accounting?
Yes
917
Is the general fund, capital projects fund, special revenue fund, and debt service fund all governmental funds?
Yes
918
True or false: the current financial resource measurement focus and the modified accrual basis of accounting are used for governmental funds.
True
919
Does the general fund use a pre-basis of accounting?
No it uses modified accrual basis of accounting.
920
Does the Internet service fund use the accrual basis of accounting?
Yes
921
Does airport enterprise fund use the accrual basis of accounting?
Yes
922
Does a pension trust fund use a pre-basis of accounting?
Yes
923
Does capital projects fund use the accrual basis of accounting?
No
924
Does special revenue fund use the accrual basis of accounting?
No
925
Does debt service fund use the accrual basis of accounting?
No
926
Is other financing sources and uses an appropriate category for proprietary funds?
No
927
Is other financing sources and uses an appropriate category for governmental funds?
Yes
928
How are interfund transfers categorized in governmental funds?
Other financing uses
929
T or F: Accounting changes involving the change in reporting entity should be reported by restating the financial statements of all prior periods.
True
930
Which category does IFRS allow an exception of impracticality?
Changes in accounting principles and correction of errors.
931
What does the statutory consolidation classification refer her to?
The merging of 2 Enterprises into a newly established enterprise where a third entity is established.
932
If Company C is established for the merging of company A and Company B, the business combination is classified as?
Statutory consolidation
933
A 70% owned subsidiary company declares & pays a cash dividend. What effect does the dividend have on the retained earnings and noncontrolling (minority) interest balances in the parent company's consolidated balance sheet?
No effect on RE and a decrease in noncontrolling interest.
934
When a parent – subsidiary relationship exist, consolidated financial statements are prepared in recognition of the account team concept of?
Economic entity
935
To consolidated retained earnings include only the retained earnings of the parent company?
Yes
936
In a consolidated balance sheet, is only the common stock of the parent entity reported?
Yes
937
What effect does a dividend declared from a 70% owned subsidiary have on noncontrolling interest balances in the parent company's consolidated balance sheet?
A decrease in noncontrolling interest
938
What effect does a dividend declared from a 70% owned subsidiary have on the retained earnings of the parent company's consolidated balance sheet?
No effect on retained earnings
939
For a parent and 80% of other company what amount of SE does the parent report in the consolidated balance sheet?
100% of the parent +20% other company
940
Parent +80% other company – how much RE does parent report on the balance sheet consolidated?
Only the parent's Retained earnings
941
If the dividend is declared from parent and a 90% owned company,what does the parent report on the consolidated balance sheet?
10% of non-controlling only
942
How much of the income does a parent show from a 80% owned company on the consolidated balance sheet?
100% of the owned company's net income plus add back the cash dividend
943
In a business combo achieved and steps do you acquire shows what percentages?
From the beginning percent amounts to the finish per dates affected of the percentages.
944
If it is reasonably possible that a company will lose a suit and have to pay damages, will the company accrual liability?
No just disclosed
945
When suing another company and it is probable to win the suit will it be reported on the financial statements?
No
946
Under IFR S, what is the measurement to estimate and report liability for the cost of settling a lawsuit?
The best estimate to settle and discounted to present value.
947
If the settlement occurs after the financial statements are issued is it reported and disclosed?
Only disclosure is required
948
If the settlement occurs after the balance sheet day but before the financial statements are issued how was it reported?
Estimate amount and recognize in the financial statements bsheet date.
949
How is the basic earnings-per-share calculated when you have noncumulative preferred stock declared not paid and cumulative preferred stock current portion & previous years declared and not paid?
Both current your dividends should be subtracted from net income or added to the net loss.
950
True or false: an entity that reports a discontinued operation, an extraordinary item, or cumulative effect of an accounting change shall present basic and diluted EPS amounts for those line items either on the face of the income statement or in the notes.
True
951
When you have bonds converting to share throughout the year at different dates how do you calculate the EPS?
Net income/weighted average number of outstanding common shares
952
How do you calculate the shares outstanding from a stock split when calculating EPS?
Retroactively as if it had occurred at the beginning of the period.
953
When treasury stock is sold how does that affect EPS?
It increases the number of shares outstanding. Remember to calculate the number of months o/s correctly.
954
If incentive stock options exercise price is higher than the market price of stock, are they included in deluded EPS?
No
955
True or false: only the current year dividend on cumulative preferred stock, whether declared or not should be deducted from net income in calculating EPS.
True
956
PStock, $10 par, 4% cumulative, 25,000 shares issued/outstanding
Calculate the preferred stock dividend
25,000 x $10 x .04 = $10,000
957
Is the basic earnings per-share for income from continuing operations and for net income reported on the face of the income statement?
Yes
958
True or false: basic EPS is reported on the face of the income statement
True
959
Are extraordinary items reported net of taxes?
Yes
960
Would major effects of a strike be included as an extraordinary item?
No
961
The estimated loss on the disposal of ass it would be reported in the year it was estimated or in the actual year that it's going to be disposed?
In the year that it was estimated.
962
Or cash dividends included in investors income under the equity method?
No
963
What affect does the cash dividend have on investors under the equity method?
They reduce the investment
964
Does it change and market value of investees common stock affect their investment income?
No unless specifically stated to value at fair market
965
For investments classified as trading, if the fair value goes down, will the loss be recognized?
Yes, in earnings for the year
966
If investments are classified as available for sale and the fair value goes down, where does the loss go?
Other comprehensive income as an unrealized loss
967
How is a receivable from a 15% ownership company reported?
Separately
968
How is a receivable from a 20 % ownership company reported?
Separately
969
How is a receivable from a 50 % ownership company reported?
Requires elimination of the receivable as an intercompany item
970
When a company issues a bond how do you calculate the interest expense?
Caring amount times the effective interest rate
971
When a company issues a bond how do you calculate the cash payment amount?
Face amount time stated interest rate
972
What is generally associated with the terms of convertible debt securities?
And interest rate that is lower than non-convertible debt.
973
Is the amortization of discount of a note reported as interest expense?
Yes
974
True or false: an entity that reports a discontinued operation, an extraordinary item, or cumulative effect of an accounting change shall present basic and deluded EPS amounts for those line items either on the face of the income statement or in the notes.
True
975
True or false treasury stock is a deduction from total stockholders equity
True
976
When acquiring treasury stock at price less than their book value, what effect does this have on book value per share?
It will increase the book value per share
977
What's the journal entry to record the stock dividend?
Retained earnings is debited
Common stock is credited
The par value is used not the FV
978
What are the components of the lease receivable for a lessor involved in a direct financing lease?
The minimum lease payments plus residual value
979
If a question doesn't indicate transfer of ownership for depreciation problems would you use the useful life of equipment or the lease term of years?
Use the lease term of years
980
How does IFR S present bank overdraft?
Operating activities
981
How does GAAP present bank overdraft in the statement of cash flows?
Financing activities
982
How are interested and dividends presented for IFRS on the statement of cash flows?
Either Operating or investing activities
983
How are interest and dividends presented on the statement of cash flows for GAAP?
Operating activities
984
True or false: The statement of cash flow, cash flows from extraordinary items are required to be disclosed separately under the categories in US GAAP.
True
985
When purchasing a bond, the present value of the bonds expected net future cash inflows discounted at the market rate of interest provides what information about the bond?
Price
986
Available for sale investment with a decline in fair market value that is permanent in nature would be reported where?
Earning section of the income statement in writing down the cost basis to FMV
987
Available for sale investment with a decline in fair market value dad is temporary in nature would be reported where?
Reported as other comprehensive income
988
In the government wide financial statements, what is the correct revenue classification of fines and forfeitures?
Charges for services
989
True or false: IFRS does not require goodwill to be recognized but allows it as an option.
True
990
What type of bond matures in installments?
Serial
991
For which transaction cost can the price to measure fair value be adjusted?
The cost, if any, that would be incurred to transport the asset or liability to or from its principal or most advantageous market.
992
Which funds of a governmental unit records depreciation?
Internal service fund
993
Contributions to a state university would be reported as?
Reported in all the revenues, expenses, and transfers
994
Revenues from state appropriations for other than capital asset related purposes are recorded as?
Non-operating revenues
995
How would a voluntary change in accounting principle be recognized?
Retrospective approach adjusted at the beginning of the year in retained earnings of the earliest year presented.
996
Does the book value include the salvage?
Yes
997
For the sum of years depreciation method, do you subtract the salvage for calculating depreciation expense?
Yes
998
True or false: IFRS –when a range of amounts that may be lost in a lawsuit are established, the best number in the range must be chosen to approve. The chosen amount must always be discounted to present value.
True
999
When a company issues of bond the part of the sentence that says that will yield 10% means?
The interest expense
1000
When a company issues of 50,000 face value 8% five-year bond for 46,000 that will yield 10% what is the 8%?
The cash payment amount for each year
1001
When the effective interest method of amortization is used for bonds issued at a premium, the amount of interest payable for an interest period is calculated by multiplying?
Face value of the bonds at the beginning of the period By the contractual interest rate
1002
Calculate the interest expense on a bond?
Carrying amount × Effective interest rate
1003
Calculate the cash payment of a bond?
Face amount × Stated interest rate
1004
Calculate a life insurance expense?
Annual advance premium payment - The increase in cash surrender value = life insurance expense for the year
1005
True or false: liquidating dividend is not income, but rather a return of investment to owners.
True
1006
Change in long-term construction contract from the completed contract method to the percentage of completion method is a change in accounting principle that needs what type of accounting treatment?
Retrospective application
1007
Right off of uncollectible receivables under the allowance method requires neither a change nor an error correction and has what accounting treatment?
No impact
1008
Change in salvage value of a depreciable assets would be a change in accounting estimate. What would be the accounting treatment?
Current and prospective applications
1009
Change in the useful life of a patent would be a change in accounting estimate. What would be the accounting treatment?
Current and prospective applications
1010
True or false: a liquidating dividend is not income, but rather a return of investment to owners.
True
1011
Is a payment made at the beginning of the period an annuity in advance?
Yes
1012
If the carrying value of a bond is more then the calculated call price, Will there be a pretext gain or loss from retirement of bonds?
Pretext gain
1013
T or F :If I note yields a higher rate percent than it pays, the note should have a discount.
True
1014
When do dividends in arrears become a liability?
When actually declared
1015
True or false: a corporation issuing 10% stock dividend should charge retained earnings for the market value of the shares issued.
True since it's less than 20 or 25%
1016
True or false: the gain on treasury stock issued does not affect expense.
True
1017
Market price minus exercise price equals?
Intrinsic value
1018
Is deferred tax a liability?
Yes
1019
At the inception of a capital lease, is the guarantee residual value included as part of minimum lease payments?
Yes, at present value.
1020
If the life of capital lease is 75% or more than the economic life how was the least depreciated?
Using the life of the lease.
1021
Private companies may choose to amortize Goodwill over how many years?
Not to exceed 10 years
1022
True or false: in a business acquisition, assets and liabilities are assigned to reporting units.
True
1023
True or false: Goodwill should be tested for value impairment at each reporting unit level.
True
1024
Goodwill should be test for value impairment at which level?
Each reporting unit
1025
A non-current asset exchanged with commercial substance is usually recorded at?
FV of asset given up
1026
True or false: no gain or loss is recognized on disposals under the group method depreciation.
True
1027
Is salvage value deducted when using the 200% declining balance method of depreciation?
No
1028
What's the formula for 200% double declining balance depreciation method?
Twice the straight-line rate X net BV @ begin of each year. (not below salvage value).
1029
How are the changes in fair value using the fair value model for reporting investment property for IFRS recorded?
As profit or loss in the current period.
1030
Impairment losses for assets to be held and used are reported as?
A component of income from continuing operations
1031
True or false: an exchange of non-monetary assets that has commercial substance is record at the fair value of the asset surrendered.
True
1032
What is the maximum period allowed for amortization of an intangible asset?
Over its useful life
1033
Our exchanges that lack commercial substance record book value and are gains recognized?
Yes. Gain recognized to extent boot received
1034
Where is the gain or loss on impairment for intangible assets get recorded using the reevaluation method?
Other comprehensive income
1035
Where does gain or loss for intangible asset impairment get recorded using the cost method?
On the balance sheet accumulated amortization
1036
True or false: only intangible assets that are traded with the active market maybe valued using the reevaluation model.
True
1037
Under US GAAP previously recognized impairments of fixed assets may or may not be recovered or reversed?
They may not
1038
A method which excludes salvage value from the base for the depreciation calculation is?
Double declining balance method
1039
Under IFRS when investment property is recorded using the fair value model, is depreciation recorded?
No
1040
Went to cash dividends become a liability?
When declared
1041
Can a cash dividend that has been declared be rescinded?
No
1042
Is an unreimbursed expenses voucher considered a cash equivalent?
No
1043
Are treasury bills considered cash equivalents
Yes
1044
Is a certificate of deposit maturing in six months considered a cash equivalent?
No
1045
Is commercial paper maturing in 2 months considered a cash equivalent?
Yes
1046
Is cash in a bond sinking fund account considered cash equivalent?
No
1047
Is a post dated check from a customer dated one month from the balance sheet date considered a cash equivalent?
No
1048
Is the direct right off method for bad debts acceptable under GAAP?
No, unless amounts are immaterial
1049
The balance in an asset retirement obligation is adjusted by?
New obligations, retirements, and accretion expense.
1050
Would you add undiscounted cash flow estimates or discounted cash flow estimates to an asset retirement obligation?
Discounted cash flow estimates
1051
When accounts receivable of a company are sold out right to a company which normally buys accounts receivable of other companies without recourse, the accounts receivable have been?
Factored
1052
How do you calculate uncollectible accounts expense?
Ending allowance balance + Accounts written off - reinstatements - Beginning allowance balance
1053
Does pledging AR provide security to obtain financing?
Yes
1054
Does assigning AR provide security to obtain financing?
Yes
1055
What does without recourse mean?
Buyer assumes risk of loss from non-collection
1056
Does the factoring without recourse qualify as a sale of receivables?
Yes
1057
What is the factor holdback?
Anticipated merchandise returns by customers.
1058
Is the deferred tax liability arising from depreciation a current liability?
No, it is a non-current liability because the related asset account is a non-current asset
1059
When the allowance method of recognizing uncollectible accounts is used, how would the collection of an account previously written off affect the allowance for uncollectible accounts?
Increase
1060
A loan with a caring amount less than face amount will yield an effective interest rate greater than or less than stated interest rate?
Greater than
1061
True or false: annuity due describes a cash flow pattern in which there is an inflow or outflow at the inception of the transaction.
True
1062
For convertible bonds, under the market value method, what amount gets credited two additional paid in capital?
Market value - Par
