Far 4

Front 1

Working capital

Back 1

current assets - current liabilites

Front 2

quick ratio

Back 2

cash + net receivables + marketable securities / current liabilties

Front 3

Short term liabilites expected to be refinanced: GAAP vs IFRS

Back 3

GAAP: if company intends to refinance to long term debt can classify as long term; not allowed for IFRS

Front 4

How many days or less ot be considered cash equivalent

Back 4

90

Front 5

Estimating uncollectible accounts receivable: Direct write off method

Back 5

Not GAAP; wait until its determined receivable is uncollecible; DR: Bad Debt Expense CR: Accounts Receivable

Front 6

Estimating uncollectible accounts receivable: Percent of sales

Back 6

DR: Bad Debt Expense CR: allowance for uncollectible accounts

Front 7

Estimating uncollectible accounts receivable: percentage of receivablesat year end method

Back 7

have to get year end allowance to a certain amount; DR and CR bad debt expense and allowacne for uncollecitbles accordingly

Front 8

Pledging (assignment)

Back 8

Requires only not disclosure

Front 9

Factoring of accounts receivable without recourse JE

Back 9

DR: Cash, Due from factor (factors margin), loss on sale of receivable CR: Accounts Receivable

Front 10

Factoring of accounts receivable with recourse

Back 10

factor has option to resell any uncollectible receivables back to seller; 2 treatmens possible either sale or borrowing

Front 11

Note Receivable Discounted with recourse

Back 11

DR: Cash CR: Notes Receivable Discounted

Front 12

Note Receivable Discounted without recourse

Back 12

DR: CASh, Loss CR: Notes Rec; 1. compute maturity value 2. compute bank discount on apayoff value (discount percent x remaing days/360xmaturity value) 3. subtract to get amount bank paid; 4. eriv interest income

Front 13

Lower of cost or market vs lower of cost and net realizable value

Back 13

GAAP: all inventory not using lifo or retail inventory method should be measured at lower of cost and net realizable value; IFRS: all inventory uses lower o cost and net realizable value

Front 14

Reversal of inventory writedowns

Back 14

GAAP: prohibited; IFRS: allowed but limited ot amount of original writedown

Front 15

Lower of cost or market vs lower of cost and net realizable value

Back 15

Market value is middle value of replacement cost, market ceiling, and market floor; replacement cost: cost to purchase item of inventory; market ceiling: net selling price less costs to complete and dispose; market floor - market ceiling less normal profit margin

Front 16

Lower of cost and net realizable value

Back 16

Net realizable value is selling price less costs to complete (same as market ceiling)

Front 17

Periodic vs perpetual inventory method JE

Back 17

Periodic doesn't make cogs/inventory transactions until the end of period

Front 18

FIFO

Back 18

ending inventory and cogs are same whether a periodic or perpetual system used; in period of rising prices the FIFO method resuls in highest ending inventory, lowest costs of goods sold, and highest net income

Front 19

LIFO

Back 19

Not allowed under IFRS; In periods of rising prices LIFO results in lowest ending inventory, highest cogs, and lowest net income; LIFO is different for periodic and perpetual

Front 20

Dollar Value LIFO price index

Back 20

ending inventory at current year cost / ending inventory at base year cost

Front 21

Equipment: capitalization vs expense

Back 21

capitalize additions and improvements and replacements; expense repairs

Front 22

Rules for equipment replacements

Back 22

if carrying value is known, remove it and recognize gain or loss; if unkown and asset life extended, debit accum deprec for cost of improvement

Front 23

Capitalization of interest costs for fixed assets

Back 23

1. Only capitalize interest on money actually spent, not total amount borrowed; 2. the amount of capitalized interest is the lower of: actual interest cost incurred or computed capitalized interest (avoidable interest)

Front 24

Calculating capitalizable interest

Back 24

Total amount borrowed x interest rate + annual payment x weighted average interest rate

Front 25

Composite (group) depreciation

Back 25

average composit life = total depreciable cost divided by total annual depreciation; average composite rate = total annual depreciation / total cost

Front 26

Double Declining balance

Back 26

ignore salvage value

Front 27

Units of production depreciation method

Back 27

step 1: (cost - salvage value)/ estiamted units or hours = rate per unit or hour; step 2: rate per unit or hour x number of units producted or hours worked = depreciation expense

Front 28

Depletion base for land

Back 28

REAL; Residual value (subtract), Extraction/development cost, anticipated resotration cost, land purchase price

Front 29

Fixed Asset Impairment loss (GAAP)

Back 29

Step 1: if sum of undisounted expected future cash flows is less than carrying amount, an impairment loss should be recognized; step 2: FV or PV of future net cash flows - carrying value = impairment loss (if held for disposal add cost of disposal to get total impairmetn loss)

Front 30

Fixed Asset Impairment loss (IFRS)

Back 30

one step approach: compare carrying value to recoverable amount (recoverable amount is greaeter of assets fair value less costs to sell and assets value in use) (value in use is present value of future cash flows)

Front 31

Fixed asset impairment reversals

Back 31

allowed under ifrs, but not under gaap