SFCPA notes from Mini Quizzes

Question 1

What is the term used for receivables sold without recourse

Answer 1

If receivables are sold, the correct term is that the receivables were factored.

Question 2

Are contingent gains recorded when it is probable that company will win the lawsuit against a competitor who is supposed to pay

Answer 2

Contingent gains are never recorded until money is actually received

Question 3

Cite all 3 sections of CAFR (Comprehensive Annual Financial Report)

Answer 3

1. Introductory 2. Financial 3. Statistical

Question 4

Examples of Product and Period Costs

Answer 4

Product Cost - Shipping costs to import the mittens are a product cost and included in inventory. This is a cost necessary to bring the item to a saleable condition.
Period Cost - Shipping costs to ship the mittens to customers are a period cost and are not included in inventory.

Question 5

How should bargain purchase be recognized in a business acquisition?

Answer 5

As a gain in earnings at the acquisition date.