Flashcards in Test 1 other questions Deck (25):
When you write down inventory, the lower of cost and net realizable value may be written back up if market value increases.
LCM and LCNRV are criticized for their lack of
IFRS says that inventory is valued at
lower of cost and NRV
An example of change in accounting principle would be changing an estimate and the reporting entity.
When you change to the lifo method this will require a retrospective change
There are how many acceptable approaches for changes to accounting principles?
If you are changing an accounting estimate what approach will you not use?
prospective approaches changes are seen where?
current and future years
Changes from lifo to fifo are NOT changed how
Companies should NEVER include cumulative accounting changes in their income statement
True as heck
If you change type of depreciation do you need to provide a adjustment or correction
heck no you just do it differently from now on
Are the purchasing and trading of securities always considered investing activities?
Heck no they are operating
What does the IFRS say about classifying securities?
They need to be AFS or FVPL
Which of the broad categories of securities does not include equity securities?
How do you record changes in FV for HTM securities?
You Don't! Ha!
When talking about zero-coupon bonds, do they increase by the periodic amount of interest?
Heck yes they do
Does the interest expense increase or decrease as time goes on in a installment note
most corporate bonds are what type?
debenture bonds homie
When it asks for the current market value what are ya gone do?
find the PV of the face and PVOA of the interest using the market rate!!
on an amortization table what is the interest expense
interest expense is the outstanding balance multiplied by the market rate
what value do bonds usually sell at?
their present value
When you sell at a premium using the effective interest method, on each payment the amount of cash paid will be
greater than the effective interest
so it must be more
When you sell at a discount using the effective interest method, on each payment the amount of cash paid will be
less than the effective interest
so it must be less
if you sell at a discount or premium, then how will the straight line amortization be compared to the effective interest amortization
It will be higher than the effective interest amount in the early years and less than the effective
interest amount in the later years.