Far 5 Flashcards
(27 cards)
under the fair value method in recording on an investment, dividends received and increases in equity investments are recognized in ____ ________ and the unrealized __________ loss is also included in net income
NET INCOME; HOLDING
Bond investments that are intended to be sold within a year are classified as __________ securities because the bonds are held for sale for the purpose of selling them in the near term
TRADING
________ securities reflect all realized gains and unrealized gains and losses in __________
TRADING; INCOME
According to the Current Expected Credit Loss (CECL) model, which applies to AFS and held for sale debt securities, expected credit loss is recorded when the amortized cost _________ the present value of the principal and interest expected to be collected
EXCEEDS
When there is excess in fair value, that amount is ___________ and if there is excess in inventory, ______ goes up and ___ _______ goes down
AMORTIZED; COST OF GOODS SOLD; NET INCOME
Under equity method, a company recognizes it’s portion of net income then deducts any ___________
AMORTIZATION
When calculating carrying amount of an investment under the equity method, _________ dividends then when calculating income, use net income * percentage ownership
DEDUCT
Preferred stock doesn’t not allow an investor to exercise _________ _________ so is accounted for using the fair value method
SIGNIFICANT; INFLUENCE
Dividend income under the equity method ___________ the carrying amount of the investment. Dividends under the equity method are considered ________ of ___________
DECREASES; RETURN; CAPITAL
Under the equity method, goodwill is ignored (T OR F)
TRUE
When a parent company sells equipment to a subsidiary, the equipment will be shown at _____ then depreciation will continue as if the equipment hadn’t been sold
COST
First step in calculating noncontrolling interest: __________ price/ _________ percentage= noncontrolling interest at purchase date
PURCHASE; OWNERSHIP;
calculating a subsidiary’s retained earnings: 1/1 balacnce+net income-__________=retained earnings 12/31
DIVIDENDS
only __________ interest of subsidiary will flow up to retained earnings of parent company
CONTROLLING
Under the Acquisition method in reporting for consolidated FS, ________ from subsidiary from before the sale is not recorded. Only the equity of the parent is recorded
Equity
When using the Acquisition method, the retained earnings of the parent company is reported on the consolidated retained earnings without regard to the subsidiary’s retained earnings (T of F)
True
Under the goodwill method in calculating a partner’s capital, __________ benefiting partner account by adding the presumed value then subtracting the total contributions then adding it to benefiting partner
INCREASE
under the goodwill method any __________ paid to a retiring partner is credited to the remaining partner’s capital accounts
PREMIUM
a partnership can use the bonus method when dissolving a company because the bonus method increases or decreases each individual partner’s accounts without changing total net assets of the partnership (T or F)
TRUE
deferred tax asset and liab. are added or subtracted to _________ ___ Expense. Deferred income tax is an __________ and deferred tax benefit is a __________
INCOME; TAX; ADDITION; SUBTRACTION
items like __________ and ___________ accounts expense are items included on both tax return and accounting records and are __________ differences and result in a deferred tax asset or liability
DEPRECIATION; UNCOLLECTABLE; TEMPORARY
_______ (Paid) and and proceeds from the sale of ___________ stock provide net cash provided by financing activities
DIVIDENDS; TREASURY
deferred tax asset and liab. are added or subtracted to income tax expense. Deferred income tax is an ________ and deferred tax benefit is a _________
ADDITION; SUBTRACTION
items like depreciation and uncollectible accounts expense are items included on both tax return and accounting records and are ___________ differences and result in a deferred tax asset or liability
TEMPORARY
