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9 Cards in this Set
- Front
- Back
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Process of journal entries for long term contract? |
Recognises expense incurred. Record billings to clients. Record cash collected. Record recognition of revenue. -If loss is made, transfer negative contract asset ballance to contract liability; this must be done as soon as a loss is predicted. -If not reliably measurable, recog ise profit only upon completion. |
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Accounts in accounting for long term contracts? |
Contract asset. Contract liability. Cash. Account receivable. Materials, accounts payable. Construction expense. Revenue from long term contract. |
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Preparing a table for income recognition? |
Contract price. Costs incurred to date. Estimated cost to complete. Estimated total cost. Estimated profit. Per cent complete. Gross profit to date. Gross profit for period. Construction expense for period. Revenue from long term contract. |
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Finding the present value of minimum lease payments? |
Lessee (Lease payment - reinbursment to lessor)*present value of annuity $1 +garunteed residual value or bargin option*present value of $1 |
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Schedual of lease payments table? |
*written horizontally Date. Payments. Interest. Principal reduction. Balance. |
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Process in preparing journal entries for leases? |
Lessee. Recognise inception of lease. Recognise payments. Lessor. Recognise inception. Recognise payments received |
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Accounts in the preparation of journal entries for leases? |
Lessee. Lease liability. Interest expense. Cash. Depreciation. Accumulated depreciation. Executory costs. Leased (asset description). Lessor. Lease receivable. Cash. Executory cost recoupment. Interest revenue. (Could recognise purchase of machinery before lease starts - asset and cash.) |
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Finance lease if? |
PV of MLP is significant amount of fair value. Lease is for significant part of assets economic life. Bargin option, likely to be exercised. Renewal of lease below market value. Non-cancellable, or effectively non-cancellable. Specilised equipment. |
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T-accounts used? |
Accounts rec. Allowence for doubtfull debts. Accrued wages/expenses. Accounts payable. Inventory. Accumulated depreciation Property plan and equipment - little table may be required. Loan. Retained profits. |
