2011 Financial - AICPA Released Simulations Update

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2011 Financial - AICPA Released Simulations Update Financial - AICPA Released Simulations Update for the 2011 Edition Last Updated March 8, 2011 SECTION A: Simulation Errata Item A.1 AICPA Released May 2006 - Tab #2 - Research This question asks for the proper citation providing guidance on when the acquisition of equipment is reported in the operating section of the statement of cash flows. The solution given to this research question is incorrect. The correct solution is: FASB ASC 230-10-45-22 " Certain cash receipts and payments may have aspects of more than one class of cash flows. For example, a cash payment may pertain to an item that could be considered either inventory or a productive asset. If so, the appropriate classification shall depend on the activity that is likely to be the predominant source of cash flows for the item. For example, the acquisition and sale of equipment to be used by the
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Unformatted text preview: entity or rented to others generally are investing activities. However, equipment sometimes is acquired or produced to be used by the entity or rented to others for a short period and then sold. In those circumstances, the acquisition or production and subsequent sale of those assets shall be considered operating activities." SECTION B: SIMULATION ENHANCED INFORMATION None EDITORS’ COMMENTS Some of the Items above have come from our internal review process, some have come from questions and comments from Becker instructors around the world, and some have come from questions asked by various candidates, either from Becker Profhelp or in online or live classes. We wish to thank all of these individuals as a group for their efforts to improve our materials. 1 © 2010 DeVry/Becker Educational Development Corp. All rights reserved....
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This note was uploaded on 09/25/2011 for the course ACCOUNTING AC591 taught by Professor W during the Spring '11 term at Keller Graduate School of Management.

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