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53 Cards in this Set
- Front
- Back
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Held to Maturity |
valued at amortized at cost, reported in Long-Term Investments, realize gain or loss and sale |
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Available for Sale |
reported at fair value, recognize "Unrealized Holding Gain/Loss- Equity" in "Other Comprehensive Income" in the income statement, report in investments |
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How do you record an unrealized holding loss for Available for Sale securities? |
Dr. Unrealized Holding Gain/Loss- Equity Cr. Fair Value Adjustment- AFS |
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Trading |
reported at fair value, recognize "Unrealized Holding Gain/Loss- Income" |
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How do you record an unrealized holding gain for a Trading security? |
Dr. Fair Value Adjustment- Trading Cr. Unrealized Holding Gain/Loss- Income |
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For equity securities how do you account for holding less than 20%? |
Fair Value Method |
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For equity securities how do you account for holding 20-50%? |
equity Method |
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For equity securities how do you account for holding 50% or more? |
Consolidated Statements |
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Record Net Income Report on holdings 20-50% |
Dr. Equity Investment (%XNI) Cr. Investment Income |
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Record Net Loss on holdings 20-50% |
Dr. Investments Loss Cr. Equity Investments |
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Record Dividend with holdings 20-50% |
Dr. Cash Cr. Equity Investment |
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Do you make Fair value adjustments on equity securities with holdings 20-50%? |
no |
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How do you record an impairment? |
Dr. Loss on Impairment Cr. Debt Investments Dr. Fair Value Adjustment- AFS Cr. Unrealized Holding G/L- Equity (reverse unrealized loss) |
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Other comprehensive income |
changes in wealth (other than transactions with owners) that don't go on the income statement |
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How do you find other comprehensive income? |
Current Year NI + Accumulated other comprehensive income (unrealized holding g/l- AFS) = Comprehensive Income |
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If securities are AFS, and one is sold during the year how do you find the unrealized gain or loss for the year? |
1) Find the difference between Fair value and Cost of securities and total them up. 2) Take the Total change and subtract the realized gain from the sale 3) Difference will be the unrealized holding g/L |
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For Other Comprehensive Income how do you find total holding gains? |
FV @ Year end + FV Sold- Beginning FV |
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What is FASB new Standard regarding revenue? |
it adopts asset-liability approach, which means accounting for revenue is based on changes in the assets and liabilities arising from contracts with customers. This replaces the prior income statement focus on earned and realized |
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What are the steps in the 5 Step Process for Revenue Recognition? |
1) Identify the Contract with customers 2) Identify the separate performance obligations in the contract 3) Determine the transaction price 4) Allocate the transaction price to the separate performance obligations 5) Recognize revenue when each performance obligation is satisfied. |
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Contracts |
an agreement between 2 or more parties that creates enforceable rights or obligations |
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At what point can a company recognize revenue from contracts with customers? |
not until the contract exists, no revenue until one or both parties perform |
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For a contract modification when is it treated as a new contract? |
1) G&S are distinct 2) right to receive the an amount of consideration that reflects the standalone selling price of the G&S 3) Accounting for the original contract is unaffected and the new contract follows rev. recognition standards |
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For contract modification when is it rated as a prospective modification? |
1) Conditions for the new contract method is not met 2) effect of change is accounted for in the period of change and in the future periods if both are affected |
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performance obligation |
a promise in a contract to provide goods or services; a distinct product or service must be provided |
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how do you account if there is more than one performance obligation? |
account for each seperately |
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What are the four factors when considering the transaction price? |
1) variable consideration 2) time value of money 3) noncash consideration 4) consideration paid or payable to the customer |
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Variable Consideration |
expected value or most likely amount |
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Time Value of Money |
Significant financing Component (discount rate) |
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Noncash Consideration |
recognize revenue on the fair value of what is recieved |
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Consideration Paid or Payable to Customers |
payments made to customers as part of a revenue arrangement, reduce the consideration received and the revenue to be recognized. |
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What is the best measure of fair value? |
Standalone selling price |
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When is a performance obligation satisfied? |
when the customer obtains control of the G&S |
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What are some indicators of change in control? |
1) seller's right to payment 2) Transfer of legal Title 3) Transfer of physical possession 4) Customer has significant risks and rewards of ownership 5) customer's acceptance of an asset |
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If performance obligations are satisfied over a period of time, how is revenue recognized? |
Progress toward completion |
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When there is a contract modification, and the additional products do not reflect the standalone selling price of the additional speakers and the prospective method is used, how do you find the selling price? |
1) Take remaining products from original contract and multiple by original selling price 2) Take additional products and multiple by new selling price. 3) Add the two totals together and divide by total remaining units to be sold from both contracts |
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If a company is likely to meet a discount how do you record it? |
record net of the discount |
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How do you know when to recognized revenue over a period of time? |
1) Customer controls asset as its created or enhanced 2) company does not have an alternative use of the product |
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How do you record a sale with an estimate on returns or right of returns? |
Dr. Cash (total amount X price) Cr. Sales Rev (Amount estimated for customer to keep X price) Cr. Refund Liability (Estimated amount to be returned X Price) Dr. CGS (Amount estimates for customer to keep X cost) Dr. Estimated Inventory Returns (Estimated amount to be returned X cost) Cr. Inventory (Total X cost) |
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What type of account in estimated inventory returns? |
asset account |
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How do you record if a customer returns the inventory expected to be returned? |
Dr. Refund Liability Cr. Cash Dr. Inventory Returns Cr. Estimated Inventory Returns |
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If the obligation or right to repurchase the asset is for an amount greater than or equal to the selling price, the transaction is considered_________. |
a financing transaction |
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How do you record a repurchase agreement sale? |
Dr. Cash Cr. Liability to Loy |
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How do you record interest on a repurchase agreement? |
Dr. Interest Expense Dr. Liability to Loy (Total X Interest rate) |
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How to you record the repurchase of a repurchase agreement? |
Dr. Liability to Loy Cr. Cash |
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How would the Principal account for equipment shipped on consignment? |
Dr. Inventory on Consignment Cr. Inventory |
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How would the Agent account for Equipment shipped on Consignment? |
memo entry |
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How would the principal account for payment of shipping fees? |
Dr. Inventory on Consignment Cr. Cash |
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How would the Agens account for payment of shipping fees? |
N/A |
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How would the principle account for advertising costs? |
Does not account for until notified |
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How would the agent account for advertising fees? |
Dr. Receivable from Eagle Cr. Cash |
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How would the principle account for sale of equipment? |
not until notified |
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How would the agent account for sale of equipment? |
Dr. Cash Cr. Payable to Eagle |
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How would the Principle account for on notice date? |
Dr. Cash Dr. advertising expense Dr. Commission expense Cr. Revenue on Consignment Dr. CGS Cr. Inventory on Consignement |
