Training the Street Accounting Final Exam –
Questions With Appropriate Solutions
Save
Practice questions for this set
Learn 1 /7 Study with Learn
munis ; fines ; they do not reverse ; they dont generate deffered tax k; they
WILL result indifferences between effective and statutory rates
Choose an answer
1 timing differences 2 circular differences
3 permanent differences 4 accounting differences
Don't know?
Terms in this set (148)
Two objectives of relevant and reliable
financial reporting
Historical cost firm records the amount of the transaction
, whatt the transaction is worth as of the balance
Fair value
sheet date, also known as "mark to market"
The fair value hierarchy provides insight into the
priority of valuation techniques that are used to
determine fair value. The fair value hierarchy is
divided into three broad levels.
Fair Value Hierarchy
Level 1: quoted prices in active markets like common
stock on NYSE
Level 2: Inputs other than quoted prices included in
Level 1 that are observable for the asset or liability
either directly or through corroboration with
Fair Value Hierarchy observable data.
Level 3: Unobservable inputs (for example, a
company's own data or assumptions). this is the most
iffy. (ex: a DCF)
Level 1 is the most reliable because it is based on
quoted prices, like a closing stock price in the Wall
Street Journal. Level 2 is the next most reliable and
would rely on evaluating similar assets or liabilities in
active markets. At the least-reliable level, Level 3,
much judgment is needed based on the best
information available to arrive at a relevant and
reliable fair value measurement.
if an observable input has >10% impact on fair value,
FV Level 3 observality
then it must be level 3
substantial doubt 75% doubt a firm wont meet obligations
sales-returns (products and services have been
revenue
delivered) "top line"
accounts recievable claim to case
retained earnings captures revenue
, do dividends change the no
income statement
another name for income profit and loss
statment
revs-expenses +/- other income (including gains and
net income=
losses)
pg 22 make sure to double check this somehow (brad?)
economic measurement is not equal to cash flow (in
accrual accounting other words we dont record when cash is physically
moving, just the effects in accrual)
entities match the revenues with the period when it
Matching Principle/ is earned ; example, gift cards. when you buy a gift
accrual accounting card, the accounts receivable increases, and its
(revenues) matched with deferred revenue (liability!) on the
balance sheet until it is earned
matching with tif giftcard on cc using accrual
redo pg 28
accounting
entities match the expense with the revenue; its not
matching principle/
an expense until its sold. example is inventory on
accrual accounting
the bal sheet until revenue is earned (like when the
(expenses)
person uses the gift card)
a firms assets and source of capital (liabilities and
balance sheet
equity) at a single point in time
other liabilities (accounts payable accrued expenses
what are the three
and deffered revenue); debt (interest bearing
primary ways to fund
liabilities) and equity (residual owners, high risk high
assets
reward)
what are some omissions intangible assets like Brand; purchase commitments,
(items not on the balance like coke's commitment to buy sugar, off balance
sheet) sheet commitments and contingencies
Questions With Appropriate Solutions
Save
Practice questions for this set
Learn 1 /7 Study with Learn
munis ; fines ; they do not reverse ; they dont generate deffered tax k; they
WILL result indifferences between effective and statutory rates
Choose an answer
1 timing differences 2 circular differences
3 permanent differences 4 accounting differences
Don't know?
Terms in this set (148)
Two objectives of relevant and reliable
financial reporting
Historical cost firm records the amount of the transaction
, whatt the transaction is worth as of the balance
Fair value
sheet date, also known as "mark to market"
The fair value hierarchy provides insight into the
priority of valuation techniques that are used to
determine fair value. The fair value hierarchy is
divided into three broad levels.
Fair Value Hierarchy
Level 1: quoted prices in active markets like common
stock on NYSE
Level 2: Inputs other than quoted prices included in
Level 1 that are observable for the asset or liability
either directly or through corroboration with
Fair Value Hierarchy observable data.
Level 3: Unobservable inputs (for example, a
company's own data or assumptions). this is the most
iffy. (ex: a DCF)
Level 1 is the most reliable because it is based on
quoted prices, like a closing stock price in the Wall
Street Journal. Level 2 is the next most reliable and
would rely on evaluating similar assets or liabilities in
active markets. At the least-reliable level, Level 3,
much judgment is needed based on the best
information available to arrive at a relevant and
reliable fair value measurement.
if an observable input has >10% impact on fair value,
FV Level 3 observality
then it must be level 3
substantial doubt 75% doubt a firm wont meet obligations
sales-returns (products and services have been
revenue
delivered) "top line"
accounts recievable claim to case
retained earnings captures revenue
, do dividends change the no
income statement
another name for income profit and loss
statment
revs-expenses +/- other income (including gains and
net income=
losses)
pg 22 make sure to double check this somehow (brad?)
economic measurement is not equal to cash flow (in
accrual accounting other words we dont record when cash is physically
moving, just the effects in accrual)
entities match the revenues with the period when it
Matching Principle/ is earned ; example, gift cards. when you buy a gift
accrual accounting card, the accounts receivable increases, and its
(revenues) matched with deferred revenue (liability!) on the
balance sheet until it is earned
matching with tif giftcard on cc using accrual
redo pg 28
accounting
entities match the expense with the revenue; its not
matching principle/
an expense until its sold. example is inventory on
accrual accounting
the bal sheet until revenue is earned (like when the
(expenses)
person uses the gift card)
a firms assets and source of capital (liabilities and
balance sheet
equity) at a single point in time
other liabilities (accounts payable accrued expenses
what are the three
and deffered revenue); debt (interest bearing
primary ways to fund
liabilities) and equity (residual owners, high risk high
assets
reward)
what are some omissions intangible assets like Brand; purchase commitments,
(items not on the balance like coke's commitment to buy sugar, off balance
sheet) sheet commitments and contingencies
