In open market transactions, Gold Corp. simultaneously sold its long-term investment in Iron Corp. bonds and purchased its own outstanding bonds. The broker remitted the net cash from the two transactions.Gold's gain on the purchase of its own bonds exceeded its loss on the sale of the Iron bonds. Assume the transaction to purchase its own outstanding bonds is unusual in nature and has occurred infrequently.Gold should report the:
Answer(s): D
Choice "d" is correct, these are two separate transactions because Gold Corp. (1) sold Iron Corp. bonds (an investment) for a loss, and, (2) bought back its own (Gold) Corp. bonds (a debt) for a gain. This is not a "refinancing" (where one would sell new bond debt to buy back old bond debt outstanding).The gain from the purchase of its own bonds is an "extraordinary gain" because it is both unusual in nature and infrequently occurring (per APB Opinion No. 30 and SFAS No. 145). The Iron Corp. transaction is a loss in "income before extraordinary items." Choices "a" and "b" are incorrect. The two transactions are separate and cannot be netted. Choice "c" is incorrect. Just the opposite. The sale of the investment is a loss in "income before extraordinary items," while the purchase of its bond debt is an "extraordinary gain" according to the provisions of APB Opinion No. 30.
Lore Co. changed from the cash basis of accounting to the accrual basis of accounting during 1994. The cumulative effect of this change should be reported in Lore's 1994 financial statements as a:
Answer(s): A
Choice "a" is correct. The cash basis for financial reporting is not a generally accepted accounting basis of accounting (GAAP); therefore, it is an error. Correction of an error from a prior period is a reported as prior period adjustment to retained earnings. Choice "b" is incorrect. Cash basis reporting is not an accounting principle under accrual accounting principles. Thus, the change from cash basis is not reported as a change in accounting principle. In addition, changes in accounting principle are not prior period adjustments; instead, they are treated retrospectively.Choices "c" and "d" are incorrect. Correction of prior period errors has no effect on the current year's income statement.
A material loss should be presented separately as a component of income from continuing operations when it is:
Choice "d" is correct. Gains or losses that are unusual in nature or occur infrequently but not both, are presented as a component of income from continuing operations. Choice "a" is incorrect. Extraordinary items are shown net of tax in a separate section of the income statement after income from continuing operations.Choice "b" is incorrect. Cumulative effects of changes in accounting principle are now shown net of tax as an adjustment to the opening balance of retained earnings in the retained earnings statement. This treatment is called retrospective application. There really are no longer any cumulative effect types of changes in accounting principle. The cumulative effect is merely how the amount of the change is measured.Choice "c" is incorrect. This is the definition of an extraordinary item.
During 1994, Orca Corp. decided to change from the FIFO method of inventory valuation to the weightedaverage method. Inventory balances under each method were as follows:Orca's income tax rate is 30%.Orca should report the cumulative effect of this accounting change as a(n):
Choice "a" is correct. The cumulative effect of a change in accounting principle is shown as an adjustment to beginning retained earnings.Choice "b" is incorrect. The cumulative effect of a change in accounting principle is now presented as a separate category on the retained earnings statement and is not a component of net income. Choice "c" is incorrect. Extraordinary items are unusual and infrequent in nature. Extraordinary items have nothing to do with changes in accounting principle. Choice "d" is incorrect. A change in accounting principle affects retained earnings, not the income statement, under SFAS No. 154.
A transaction that is unusual in nature and infrequent in occurrence should be reported separately as a component of income:
Choice "d" is correct. An extraordinary item (a transaction that is both "unusual in nature" and "infrequent in occurrence") should be reported separately as a component of income after discontinued operations of a segment of a business.The cumulative effect of a change in accounting principle is shown on the retained earnings statement.This is why memorizing the mnemonic "idea" is so important.
Share your comments for AICPA FAR exam with other users:
i think you have the answers wrong regarding question: "what are three core principles of web content accessibility guidelines (wcag)? answer: robust, operable, understandable
these questions are not valid , they dont come for the exam now
question looks valid
good for practice
need more q&a to go ahead
question 59 - a newly-created role is not assigned to any user, nor granted to any other role. answer is b https://docs.snowflake.com/en/user-guide/security-access-control-overview
just passed my exam today. i saw all of these questions in my text today. so i can confirm this is a valid dump.
needed dumps
very helpful
will post once the exam is finished
relevant questions
just clear exam on 10/06/2202 dumps is valid all questions are came same in dumps only 2 new questions total 46 questions 1 case study with 5 question no lab/simulation in my exam please check the answers best of luck
q.112 - correct answer is c - the event registry is a module that provides event definitions. answer a - not correct as it is the definition of event log
good and useful.
good questions
good content
totally not correct answers. 21. you have one gcp account running in your default region and zone and another account running in a non-default region and zone. you want to start a new compute engine instance in these two google cloud platform accounts using the command line interface. what should you do? correct: create two configurations using gcloud config configurations create [name]. run gcloud config configurations activate [name] to switch between accounts when running the commands to start the compute engine instances.
kindly upload the dumps
still learning
excellent way to learn
help so much
understand sql col.
i would give 5 stars to this website as i studied for az-800 exam from here. it has all the relevant material available for preparation. i got 890/1000 on the test.
this is nice.
q55- the ridac workflow can be modified using flow designer, correct answer is d not a
by far this is the most accurate exam dumps i have ever purchased. all questions are in the exam. i saw almost 90% of the questions word by word.
i cleared the az-104 exam by scoring 930/1000 on the exam. it was all possible due to this platform as it provides premium quality service. thank you!
question # 232: accessibility, privacy, and innovation are not data quality dimensions.
looks wrong answer for 443 question, please check and update
great question
question: a user wants to start a recruiting posting job posting. what must occur before the posting process can begin? 3 ans: comment- option e is incorrect reason: as part of enablement steps, sap recommends that to be able to post jobs to a job board, a user need to have the correct permission and secondly, be associated with one posting profile at minimum
answer to question 72 is d [sys_user_role]
please provide the pdf
hey guys, just to let you all know that i cleared my 312-38 today within 1 hr with 100 questions and passed. thank you so much brain-dumps.net all the questions that ive studied in this dump came out exactly the same word for word "verbatim". you rock brain-dumps.net!!! section name total score gained score network perimeter protection 16 11 incident response 10 8 enterprise virtual, cloud, and wireless network protection 12 8 application and data protection 13 10 network défense management 10 9 endpoint protection 15 12 incident d
Keeping this site free takes real effort. We constantly battle automated scraping and unauthorized content copying. A quick account helps us protect the community and keep the site free.
To continue studying for your FAR, please sign in or create a free account.