F1

Question 1

What’s the single source if authoritative nongovernmental US GAAP

Answer 1

FASB CODIFICATION BITCH

Question 2

What are the 4 subsections under IFRS

Answer 2

International Accounting Standards (IAS)
International Financial Reporting Standards (IFRS)
IFRIC interpretations
SIC interpretations

Question 3

What are the two fundamental qualitative characteristics of useful financial info

Answer 3

Relevance and Faithful representation

Question 4

Yo what are the 3 elements of relevance (PCM)

Answer 4

PCM BITCH

Predictive
Confirming Values
Materiality

Question 5

What’re the three components to ~faithful representation~
FuCkiN

(FCN)

Answer 5

Freedom from error
Completeness
Neutrality

Question 6

What the fuck are the enhancing qualitative characteristics of financial information (CUT V)

Answer 6

Comparability
Understandability
Timeliness
Verifiability

Question 7

What is included in a full set of financial statements

Answer 7

Statement of Financial Position (Balance Sheet)
Statement of earnings (income statement)
Statement of comprehensive income 
Statement of cash flows 
Statement of changes in owners equity

Question 8

Each of these things becomes an expense when it expires, can you tell me what each one becomes?

1. Inventory
2. Prepaid insurance
3. NBV of Fixed Assets
4. Unexpired cost of patents

Answer 8

1. COGS
2. Insurance Expense
3. Depreciation Expense
4. Amortization Expense

Question 9

How do control and revenue recognition differ when an entity acts as a principal as opposed to an agent

Answer 9

Principal has control over goods and service prior to transfer and revenue equal to the expected gross consideration is recognized

An agent does not have control and revenue equal to the agents fees or commission is recognized

Question 10

What’s gotta happen for a customer to obtain control in a bill and hold agreement

Answer 10

Must be substantive reason for arrangement

Product is separately identifiable as belong to customer

Product is ready for transfer to customer

Entity can’t give product to another customer

Question 11

When is a warranty considered a separate performance obligation

Answer 11

If customer has option to purchase warranty separately or if warranty provides a service which is beyond the assurance that the product works, then it is a separate obligation and a portion of warranty transaction price needs to be allocated to the warranty obligation

Question 12

For construction projects when can revenue be recognized

Answer 12

At either a point in time or over time

Question 13

For long term construction projects what losses are recognized immediately

Answer 13

When the loss represents an overall loss on the entire contract as of the completion of the contract

Question 14

If you need to find the inventory cost, what two accounts are considered

Answer 14

Purchase Price and Freight in

Question 15

If you need to find the Selling Expense, what three accounts are considered

Answer 15

Freight Out, Salaries and Commissions, advertising

Question 16

If you need to find the General and Administrative expenses, what three accounts are considered

Answer 16

Officer Salaries, Accounting and Legal, and insurance

Question 17

If you need to find the nonoperating Expense, what two accounts are considered

Answer 17

Auxiliary Activities and interest expense

Question 18

what is the order of a multi step income statement

Answer 18

Net Sales
Less COGS
=Gross Margin
LESS Expenses from Continuing Ops
Other Revenue and Gains
Other Expenses and Losses
=Income from continuing ops
Income tax expense
Anything Discontinued (after tax)
=Net Income

Question 19

Under GAAP, a material transaction that is infrequent in nature and/or unusual in nature is presented how on the income statement

Answer 19

it is presented separately as a part of income from continuing operations whenever the transaction results in a Gain or Loss.

Question 20

How do you handle the sale of a fixed asset in terms of the income statement

Answer 20

the gain or loss is recognized as part of income from continuing operations.

Question 21

What are the 5 steps for revenue recognition

I STAR = “I am star”

Answer 21

Identify contract with customer
Seperate Performance Obligations identified
Transaction price determiend
Allocate transaction price to seperate performance obligations
Recognize Revenue when or as the entity satisfies each obligation

Question 22

The gain or loss from discontinued operations can consist of what

Answer 22

impairment losses, a gain/loss from actual operations, anda gain or loss on disposal.

Question 23

what is the term for how a change in accounting estimate (principle) is reported…

Answer 23

Prospectively

Question 24

what is the term for how a change in accounting principle is reported

Answer 24

Retrospectively…the cumulative effect of change is included in retained earnings as a beginning adjustment in the earliest year presented..

the prior FS are restated if presented

Question 25

What are the three types of accounting changes yo

Answer 25

Change in accounting principle, estimate, and entity

Question 26

Under that GAAP shit how is a change in accounting entity reported in terms of FS

Answer 26

All current and prior FS are presented and restated.

Question 27

So there are these things called error corrections,how are they reported

Answer 27

they are prior period adjustments to retained earnings and all comparative FS are presented and restated

Question 28

If you could define comprehensive income...how would you define it

Answer 28

the change in equity which results from transactions and events/circumstances from NONOWNER sources

Question 29

hey you, yes you, can you list the six items of OTHER comprehensive income (PUFIER)

Answer 29

Pension adjustment Unrealized G/L for AFS debt securities Foreign currency translation adjustments and g/l on foreign transactions Instrument specific credit risk for liabilities and changes in FV Effective portions of cash flow hedges Revaluation surpluses (IFRS only)

Question 30

What are the two ways of presenting other comprehensive income...are both methods accepted by IFRS and GAAP

Answer 30

the statement of comprehensive income (single statement) and Statement of income followed by separate statement of comprehensive income (2 statement approach) BOTH are accepted under GAAP and IFRS

Question 31

There are 4 main accounts that can require adjusting entries, what are they

Answer 31

Deferred Revenue, Prepaid Expenses, receivables, and Accrued Expenses

Question 32

What are the three BASIC rules to journal entries

Answer 32

they have to be recorded before the preparation of the FS NEVER use cash account for an adjustment EVERY adj entry will use an IS account and a BS account

Question 33

How do you determine if something you entered into is a lease or financing option? given the repurchase price and original price

Answer 33

Repurchase Price < Original Price = Lease | Repurchase Price > Original Selling Price = Financing Agreement

Question 34

Looking at incremental costs...how would you define them?

Answer 34

Incremental costs are costs incurred that would not have been incurred had the contract never existed, and are recognized as an asset if the company expects to recover these costs. These costs will be expensed if the company would incur these costs regardless

Question 35

can you give me an example of incremental costs im confusion

Answer 35

Yes little one. You have a company right, the company gets into contract and you earn commission of XXX, and printing fees of YYY to get the system ready for the contract. Only the commission fees of XXX are considered incremental assets because you expect to re-coop that amount through the service being provided. BUT the YYY amount is goin to be expensed because its a cost of the sale of the contract.

Question 36

In a Bill and Hold agreement, for revenue to be able to be recognized, the customer has to take control of the good/it has to be ready to send to the customer...what are the 4 ways they can 'take control' and revenue be recognized

Answer 36

There must be a substantive reason for the customer not to take control (like they dont have the room currently) The product is specialized and thus is seperatly identified as belonging to the customer The product is currently ready for transfer to the customer The entity cannot use the product or direct it elsewhere

Question 37

So youre a merchant right, if you cannot reasonably estimate the amount of returns when you sell the shit, when can you recognize the revenue

Answer 37

if you cant estimate how much will be returned, then what you gotta do, is fuck shit up, and wait to recognize until the return window is over.

Question 38

How are discontinued operations presented on the IS?

Answer 38

They are seperate from continuing operations and are NET of tax

Question 39

What conditions have to be present for discontinued rules to apply to a disposal

Answer 39

the disposal of the component, group, component, business activity, or nonprofit activity is reported if it represents a STRATEGIC SHIFT that has a MAJOR effect on operations and financial results.

Question 40

What are the three types of discontinued operation calculations

Answer 40

Impairment Loss G/L on disposal Results of operations of the component

Question 41

What is less than what to indicate an impairment loss

Answer 41

NRV < Book or Carrying Value The NRV is the FV less costs to sell

Question 42

When something is held for sale, what stops?

Answer 42

depreciation and amortization

Question 43

List the four types of discontinued operations

Answer 43

sale of a segment, group of components, a business, or a nonprofit activity

Question 44

A change in estimate is changed prospectively, meaning we dont go back and change shit we change the current and futttttture...what other two changes are inseperable from a change in estimate

Answer 44

a change from LIFO orrrr a change in Depreciation method

Question 45

Is a change in estimate the same thing as an error????

Answer 45

fuck ass no

Question 46

If you have a change in accounting principle (i.e. going from a gaap method to another gaap method) or a CHANGE in ENTITY how do you fix it..NOT prospectively but...

Answer 46

Retrospectively bitch

Question 47

GO BACK AND UNDERSTAND THE CUMULATIVE EFFECT OF ACCT PRINCIPLE F1-53

Answer 47

its the difference between the beg RE in the period of change and what the retained earnings would have been if the change had been retroactively applied to all prior affected periods.

Question 48

Anytime you restate Retained earnings...what do you consider tax wise

Answer 48

the restatement is NET OF TAX

Question 49

What two things do you add together to get the Comprehensive income

Answer 49

Net income and Other Comprehensive Income

Question 50

what is the actual definition of Comprehensive Income

Answer 50

the change in equity (net assets) of a business during a period from transactions from NON-OWNER sources aka it includes all changes in equity except those from investments by owners and distributions to owners.

Question 51

Accumulated Other Comprehensive income is reported on what financial statement

Answer 51

Balance sheet (Statement of Financial Position)

Question 52

ok so there's a contract, and there is an option to later repurchase the asset, whats that called

Answer 52

a repurchase agreement

Question 53

What is the definition of a forward as it relates to contract obligations

Answer 53

an obligation to repurchase

Question 54

What is the definition of a call option, how does that differ from a put option

Answer 54

call option is where there is a right to repurchase at an entitys option. a put option is where the customer has the right to repurchase