F1_T4 - F1 T4 HOMEWORK F1 : Incc+me Statement ( Tepic 4 :...

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Unformatted text preview: F1 T4 HOMEWORK F1 : Incc+me Statement ( Tepic 4 : Balance Sheet and Disclc+sures Hm I 1 B , 9% 6% meat. 7 w Which qfthe fellqvving infqrmatiqn shquld be disclqsed in the summary at significant accqunting pqlicies?I C} a. Refinancing qf debt subsequent tn the balance sheet date. C} b. Guarantees qf indebtedness qf qthers. {3} c. Criteria fer determining which investments are treated as cash equivalents. C} d. Adequacy qf pensiqn plan assets relative tq vested benefits. Chqice "c" is cqrrect. The methqd at determining which assets are cqnsidered tq be cash equivalents is a significant accqunting pelicy. Chqice "a" is incqrrect. Debt refinancing vrquld be disclqsed in a separate indebtedness nqte. Chqice "b" is incqrrect. Guarantees qf ether entity's indebtedness vvquld be disclqsed in a separate cqmmitments and centingencies nqte. Chqice "d" is incqrrect. lnfqrmatiqn abqut pensiqn plan assets and pensiqn plan liabilities is disclqsed in a separate pensiqns nqte. PM S'l'l11 Frlil'inn IrI.."3..1‘I E HOMEWORK F1 : Incc+me Statement ( Tepic 4 : Balance Sheet and Disclosures WWI 2 8 T 9% @% my. . 3? figs Bailiff, lull; 1i-"u'hat is the purpese efinfermatien presented in netes tn the financial statements”?I “3} a. Te pret'ide disclesures required by generally accepted acceunting principles. C} h. Te cerrect impreper presentatien in the financial statements. C} c. Te previde recegnitien ef ameunts net included in the tetals efthe financial statements. C} d. Te present management's respenses te auditer cemments. Cheice "a" is cerrect. Infermatien presented in netes tn the financial statements have the purpese ef presiding disclesures required in; generallyr accepted acce SFAC 5 para. ? PM S'l'l11 Frlil'inn IrI.."3..1‘I E HDMEWDRK F1 : Income Statement (Topic 4 : Balance Sheet and Disclosures Hm 3 7 fig 6% 3g: to Duet? E e 0 IWhich ofthe following should be disclosed in a summary of significant accounting policies? {3} a. Basis of profit recognition on long-term construction contracts. C} l] Future minimum lease payments in the aggregate and for each ofthe t'ye succeeding fiscal years C} c Depreciation expense C} d Composition of sales by segment Choice "a" is correct The summary of significant accounting policies should disclose policies The only policy in this question is the "basis" of profit recogniti construction contracts The other disclosures are accounting details and would be disclosed in other footnotes but not in the summary of significant accountir Choice "h" is incorrect The future minimum lease payments should be disclosed but not in the summary of significant accounting policies Choice "c" is incorrect Depreciation expense should certainly be disclosed but not in the summary of significant accounting policies Choice "d" is incorrect The composition of sales by segment should be disclosed but not in the summary of significant accounting policies PM '3l'l11 Frlil'irtn Ira-3.1 ~I E HOMEWORK F1 : Inceme Statement ( Tepic 4 : Balance Sheet and Disclesures WWI 4 v cg cg up is: Dust: Which efthe fellewing must be included in a cemeany's summary ef significant acceunting pelicies in the netes te the financial statements? C} a. Descriptien ef current year equity transactiens. C} h. Summary efleng-term deht eutstanding. C} c. Schedule effixed assets. {3} d. Revenue recegnitien pelicies. Cheice "d" is cerrect. The summary ef significant acceunting pelicies sheuld include "pelicies." The enly pelicy in the cheices listed is the revenue recegnitien Cheice "a" is incerrect. A descriptien ef current year eeuitytransactiens is net a pelicy. It sheuld he disclesed semewhere in the feetnetes hut net in the sum acceunting pelicies. Cheice "h" is incerrect. A summary efleng-term deht eutstanding is net a pelicy. lt sheuld he disclesed semewhere in the feetnetes hut net in the summary e L pelicies. 2 Cheice "c" is incerrect. A schedule ef fixed assets is net a pelicy. It sheuld he disclesed semewhere in the feetnetes hut net in the summary ef significant act PM S'l'l11 Frlil'inn IrI..":..1‘I E HOMEWORK F1 : Incc+me Statement ( Tepic 4 : Balance Sheet and Disclc+sures WWI s v 0% a up 0-0 0.55: Dean (30. acquired 100% 0fl'ullerey Curb. brierte Year 3. During Year 3. the individual cqmbanies included in theirfinancial statements the fellqwing: Dear: Mia: Dfficers' salaries STE000 550.000 Dfficers' expenses 20.000 10.000 Leans t0 efficers 125.000 50.000 Intercempany Sales 150.000 -- 1What ameunt shquld be reperted as related barn,r disclesures in the nqtes t0 Dean's Year 3 censelidated financial statements”?I 1 C} a. 5150.000 {2} 0. 5155.000 I {33' c. 5155.000 {2} d. 5550.000 Cbeice "c" is c0rrect. The qnlyr related bartytransactien that weuld require disclesure [assuming that all ameunts are material t0 the financial statements] 00qu efficers since theirr are qutside 0fthe 0rdinar'_.,r c0urse at business. Cbeices "a". and "d" are incqrrect. Officers' salaries. efficers' expenses and intercqmbalqr sales [between entities included in a censelidated set effinanci: transactiqns in the 0rdinar'3,r c0urse at business and generallyweuld net require disclqsure. PM S'l'l11 Frlil'inn Irl..":..1‘l E HDMEWDRK F1 : Income Statement (Topic 4 : Balance Sheet and Disclosures Hm a v a 9% :5,» 3g: ea Eptiizitf, E CE 0 'u'l-‘hich ofthe following is correct concerning financial statement disclosure of accounting policies? C} a Disclosures should be limited to principles and methods peculiarto the industry in which the company operates {E} l]. Disclosure of accounting policies is an integral part ofthe financial statements. C} c The format and location of accounting policy disclosures are fixed by generally accepted accounting principles C} d Disclosures should duplicate details disclosed elsewhere in the financial statements Choice "h" is correct Disclosure of accounting policies [and all other disclosure also} is an integral part ofthe financial statements Choice "a" is incorrect For disclosure of accounting policies disclosure should not be limited to principles and methods peculiar to the industry in which the t material accounting policies should be disclosed Choice "c" is incorrect For disclosure of accounting policies the format and location of accounting policies are not fixed by ease accounting policy disclos 5 Note 1 but that is a [reasonable and very general} practice and not a "rule " It does make sense to disclose the "why" before the "what " 2 Choice "d" is incorrect Disclosure of accounting policies should not duplicate details disclosed elsewhere in the financial statements PM 'Dl'lll Frlil'inn f'..-:..1"I E HOMEWORK F1 : Inceme Statement ( Tepic 4 : Balance Sheet and Disclesures we as a 3? a; as size, Jehn Ce acquired 1i]l]% ef Geerge Cerp prier te Year 3 During Year 3 the individual cempanies included in their financial statements the fellewing deli-"- Gee-"Ge Dfficers salaries STE flfli] Sfil] flfli] Dtficers expenses 2U IIIIIIIII 1II| IIIIIIIII Leans te elficers 12:3 flfli] El] flfli] 'u'lfhat ameunt sheuld be reperted as related party disclesures in the netes te Jehns Year 3 censelidated financial statements under IFRB? C} a 5125 mm 1 C} b 5155 mm C} c ens mm {3} d. eeeebee Cbeice "d" is cerrect LJnder IFRS leans te elficers and keg,r management cempensatien weuld require disclesure Censelidated elficers salaries 3125 I300 Censelidated leans te elficers 1?5 I300 Tetal 330i] I300 The elficers expenses are net related partytransactiens because these are incurred in the erdinary ceurse ef business and are net censidered te be cempensa Cbeice "a" is incerrect Beth the elficers salaries and the leans te elficers must be reperted as related partytransactiens Cbeice "b" is incerrect Beth the elficers salaries and the leans te elficers must be reperted as related partytransactiens The elficers expenses are net relatt because these are incurred in the erdinary ceurse ef business and are net censidered te be cempensatien Cbeice "c" is incerrect Beth the elficers salaries and the leans te elficers must be reperted as related partytransactiens PM 'Dl'lll Frlil'inn I'I..-:..1‘I PM El I'vlar'lpecl Uptiens... v 9% a v 3g; is: E as 0 IWhich cfthe fellcwing is net a clisclcsure requirement relatecl tc risks ancl uncertainties uncler U S Sic-«AP? {3} a. Disclcsure cf significant estimates when it is prchahle that the estimate will change in the near term. even ifthe effect cfthe change will he immaterial. C} h Disclcsure at an entitys majcr prcclucts qr services ancl its principle markets C} c Disclcsure cfthe use at estimates in the preparaticn cfthe financial statements Ct cl Disclcsure cf ccncentraticns when it is reascnahly pcssihle that a ccncentraticn cculcl cause a severe impact in the nearterm Chcice "a" is ccrrect change will he material Significant estimates shculcl he clisclqsecl when it is reascnahlg.r pcssihle [net prchahle} that the estimate will change in the near term an Immaterial items are net clisclcsecl Chcice "h" is inccrrect This is a clisclcsure requirement Chcice "c" is inccrrect This is a clisclcsure requirement Chcice "cl" is inccrrect This is a clisclcsure requirement '3l'l11 Frlil'irtn Ira-3.1T ...
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