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CPA study cards F2 3 - 6

  1. What are Assets
    Probable future exonomic benefits that are obtained or controlled by a particular entity as a result of past events or transactions
  2. What is an event
    it is something that happens to an entity and it can occur either externally or internally
  3. what is a transaction
    an event that occurs external tothe entity and typically involves a transfer of value from one entity to another
  4. What are probable future economic benefits taht are obtained or controlled by a particular entity as a result of past events or transactions
    Assets
  5. What are Liabilities
    are probable future sacrificies of economic benefits that an entity faces for obligations to provide services or transfer assets due to past events or transactions
  6. What are probable future sacrifices of economic benefits that an entity faces for obligations to provide services or transfer assets due to past events or transactions.
    Liabilities
  7. What are revenues?
    increases of assets or reductions of liabilities during a period of time. 
  8. What are increases or assets or reductions of liabilities during a period of time
    revenues
  9. Revenue Recognition US GAAP

    When should revenue be recongnized
    when it is realized or realizable and when it is earned
  10. Revenue Recognition US GAAP

    What are the four criteria that must be met for each element of the contract before any revenue can be recognized
    • 1. Persuasive evidance of an arrangement exists
    • 2. Delivery has occured or services have been rendered
    • 3. The price is fixed and determinable
    • 4. Collection is reasonably assured   
  11. Revenue Recognition US GAAP

    Revenue from the sales of products or the disposal of other assets is recognized on the ------------------------------------------of the product or other asset 
    Date of sale
  12. Revenue Recognition US GAAP

    What criteria apply for a sale to take place
    • 1. delivery of goods or setting aside goods ordered
    • 2. transfer of legal title
    • 3revenue that stems from allowing others the use of the entitys asses is recognized when the assets are used
    • 4. revenue from the performance of services is recognized in the period the services have been rendered and are able to be billed by the entity
  13. Revenue recognition IFRS

    Revenue from the sale of goods is recognized when all of the following conditions are met 
    • 1. Revenue and costs incurred for the transaction can be measured reliably
    • 2. It is probable that economic benefits fromthe transaction will flow to the entity
    • 3. the entity has transferred to the buyer the significant risk and rewards of ownership
    • 4. the enitity does not retain managerial involvement to the degree associated with ownership or control over the goods sold   
  14. Revenue Recognition IFRS

    Revenue from the rendering of services is recognized wsing the percentage of completion method when the outcome can be estimated reliably.  This can only be done when all of the following conditions have been met
     
    • 1. revenue and costs incurred for the transaction can be measured reliably
    • 2. it is probable that economic benefits fro the transaction will flow to the entity
    • 3. the stage of completion of the transaction at the end of the reporting period can be measured reliably  
  15. revenue recognition IFRS

    Revenues from interest , royalties and dividends that arise fro the use by others of the entitys assets is recognized when all of the following conditions have been met 
    • 1. revenue can be measured reliably
    • 2. it is probable economic benefits fro the transaction will flow to the entity 
  16. revenue recognition IFRS

    When can the outcome of the construction contract be estimated reliably 
    • 1. the contract revenue and contracts costs attribuaatable to the transaction can measured reliably
    • 2. it is probable that econiomic benefit from the transaction will flow to the entity
    • 3. Both the contract costs to complete the contract and the stage of contract completion at the end of the reporting period can be measured reliably  
  17. revenue recognition IFRS

    An expected loss on a construction contract is recognized --------------------------  as an ------------------------------.
    immediately / expense
  18. revenue recognition GAAP

    When a sales contract includes -------------------------------------- the fair value of the contract must be allocated to the sepate contract elements.   Revenue is then recognized separately for each element based on the ------------------------------------- appropriate for each element.
    multiple products or services / revenue recognition criteria
  19. revenue recognition GAAP

    A deferred Credit is a
    Liability
  20. revenue recognition GAAP

    When cash is recieved before it is earned a -------------------------------- is reported
    deferred credit
  21. revenue recognition GAAP

    A deferred credit is recognized as revenue as it is ----------------------
    earned
  22. revenue recognition GAAP

    List some examples of deferred credit
    • unearned interest income
    • unearned rental income
    • unearned royalty income
  23. revenue recognition GAAP

    For installment sales

    revenue is recognized as -------------------is made.
    collections
  24. revenue recognition GAAP

    When is installment sales used
    when ultimate realization of collection is in doubt
  25. revenue recognition GAAP

    What is the cost recovery method
    no profit is recognized on a sale until all costs have been recovered
  26. revenue recognition GAAP

    for the cost recovery method ------------------------------ is recognized until all costs have been recovered
    no profit
  27. revenue recognition GAAP

    What are expenses 
    reductions of assets or increases of liabilities during a period of time
  28. revenue recognition GAAP

    --------------------are reductions of assets or increaes of liabilites during a period of time.  They stem from the rendering of services, delivering goods, or any other acitvities that may constitute the major ongoing or central operations of an entity. ----------------------------should be recognized accourding to the matching principle. 
    Expenses  /  Expenses
  29. How should expenses be recognized.
    the matching principle
  30. revenue recognition GAAP
    Where do expenses come from
    • rendering of services
    • delivering of goods
    • any activity that may constitute the major ongoing central operations  
  31. revenue recognition GAAP
    What is realization 
    occurs when the entity obtains cash or the right to recieve cash or has converted a noncash resource into cash
  32. revenue recognition GAAP

    What is occurs when the entity obtains cash or the right to recieve cash or has converted a noncash resource into cash 
    realization
  33. revenue recognition GAAP

    What is recognition 
  34. The actual recording of transactions and events in the fincanial statements 
  35. revenue recognition GAAP
    What is it called when the actual recording of transactions and events in the financial statements occur 
    recognition
  36. revenue recognition GAAP

    What is the matching principle 
    expenses must be recognized in the same period in which the related revenue is recognized.
  37. revenue recognition GAAP

    What is the principle when expenses are recognized in the same period as the related revenues. 
    matching principle
  38. revenue recognition GAAP

    What type of accounting is required by GAAP 
    Accrual accounting
  39. revenue recognition GAAP

    What type of accounting records the transactions and events as they occur not when the cash is received or expended 
    accrual accounting
  40. revenue recognition GAAP

    ---------------------------- recognizes revenue whenit is earned and expenses when the obligation is incurred 
    accrual accounting
  41. revenue recognition GAAPAccrual accounting recognizes revenue when it is ------------------ and expenses when the obligation is ---------------
    earned / incurred
Author
Joens1313
ID
162288
Card Set
CPA study cards F2 3 - 6
Description
CPA Study Cards F2 3-6
Updated

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