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Flashcards in Financial Statements Deck (15)
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1

The fair value option may be elected for AFS securities. TF

True

2

What is the formula for NI?

Income from ops before taxes - Income tax expense +/- discontinued ops net of tax +/- extraordinary gains or losses

3

Administrative expenses are included in Income from Ops. TF

True. They are a reduction.

4

Gains and losses from asset sales are shown on the income statement net of tax. TF

False. They are shown in full in income before income taxes.

5

What should be assumed in the development of fair value measurements?

Highest and best use of the asset.

6

The fair value option applies to pensions. TF

False

7

Changes in accounting principles REQUIRE RETROactive application. TF

True

8

Changes in accounting estimates REQUIRE RETROactive application. TF

False. PROspective application is required.

9

Where should accumulated OCI be reported on the balance sheet?

As a separate item under stockholders equity

10

A separate statement of comprehensive income is required. TF

False. AOCI is reported in the SE section of the BS.

11

The fair value option must be applied to all interests in the same entity. TF

True

12

A change in depreciation method is a change in accounting principle. TF

False. It is a change in an accounting estimate.

13

What two attributes must be had to make an item "extraordinary"

Unusual and infrequent

14

The preparation of PROSPECTIVE financial information is required by GAAP. TF

False. Prospective fin info is used by management for internal reasons and is not required by GAAP.

15

Extraordinary gains increase NI. TF

True