Another 71 FAR Study Group 2021 - Page 3

Viewing 15 posts - 31 through 45 (of 380 total)
  • Author
    Posts
  • #2135767
    Anonymous
    Participant

    Can someone take a look at this question and tell me what the explanation is really saying? I answered correctly and understand the concept of conservatism, but was completely unaware that it is no longer a thing.

    What is the underlying concept governing the generally accepted accounting principles pertaining to recording gain contingencies?

    Correct A.
    Conservatism

    B.
    Relevance

    C.
    Consistency

    D.
    Reliability

    Conservatism is gone now and in the future, but it was still the basis for this rule when the rule was decided upon, and the rule is still in effect. Future rules will not be based on conservatism, but the past rules were, and many are still in effect (e.g., lower of cost or market). A change in a concepts statement (Statement of Financial Accounting Concepts) does not change the rule, and does not change the basis for it.

    Do NOT quit! There's more in you and if you quit you'll never see it. Show you that you can do it.

    AUD Passed  78
    BEC Passed  79
    FAR Passed  77
    REG Passed 76

    #2140402
    LL
    Participant

    @Tbizzle Thank you for your advice! I am actually doing what you suggested. I can feel I start getting those journal entries. The more I practice the more I get them. Thank you!

    AUD - 76
    BEC - 76
    FAR - 79
    REG - 80
    I am DONE!
    #2144311
    stan
    Participant

    what is the correct answer if it is not conservatism ?

    Stand
    #2144326
    stan
    Participant

    Can we use plain paper for scratch paper at the prometric center rather than laminated papers? I am allergic to markers

    Stand
    #2146627
    CPA
    Participant

    They can give you papers and a calculator, It depends on the location. it best to call or stop by your Prometric location and ask them.

    #2153110
    CPAat33
    Participant

    Hello all!

    Currently 10 years post college and am – for the first time – sincerely studying and anticipating passing the CPA exam this year.

    I have been through the cycle of studying and then get too anxious and restart for the past 10 years.

    I am using wiley study materials and am planning to take FAR as the first exam, hopefully around April of this year.

    Looking forward to successfully passing!!

    AUD - NINJA in Training
    BEC - NINJA in Training
    FAR - NINJA in Training
    REG - NINJA in Training
    New Year, Same Me, New Approach - Wiley CPA .. all day 🙂
    #2155063
    Puppykoala
    Participant

    Hi, never thought I would take CPA exam since accounting was one of my most hated subjects when I was at school two years ago. Then real world classroom taught me how important it is to understand business and numbers and CPA as a tool to advance career. I’m planning to take FAR around April so I can have about 3 months part time studying it. I heard FAR is the hardest and contains the most information and should be taken first. All my accounting education was from a certificate program from UCSD Extension, and mostly online self-studying, so I’m definitely a bit nervous. I’m using Becker review and just started last weekend. Glad to see so many are going through the same journey alongside.

    Good luck to you all!

    Shoot for the stars!

    FAR 88 04/19

    REG 95 07/19

    BEC 91 11/19

    AUD 88 12/19

    #2156917
    timmyj
    Participant

    Glen County uses governmental fund accounting and is the administrator of a multiple-jurisdiction deferred compensation plan covering both its own
    employees and those of other governments participating in the plan. This plan is an eligible deferred compensation plan under the U.S. Internal Revenue Code
    and Income Tax Regulations. Glen has legal access to the plan’s $40,000,000 in assets, comprising $2,000,000 pertaining to Glen and $38,000,000 pertaining
    to the other participating governments. In Glen’s balance sheet, what amount should be reported in the custodial fund for plan assets and as a corresponding
    liability?

    A. $0
    B. $2,000,000
    C. $38,000,000
    D. $40,000,000
    You answered B. The correct answer is D.
    When a governmental unit is the administrator of a multiple-jurisdiction deferred compensation plan, it should report all of the plan assets and liabilities (e.g.,
    $40,000,000) in Custodial Fund because the governmental unit is acting as an agent for both its own employees and other governments participating in the
    plan.

    -I thought for custodial accounts the liability portion was only for the government unit of the financial statements and the the net position was for the portion that belonged to another entity. The assets would be $40, liabilities would be $38 and net position would be $2. Can someone please explain this. Thank you.

    #2157898
    timmyj
    Participant

    Casey entered into a troubled debt restructuring agreement with First State Bank. First State agreed to accept land with a carrying amount of $85,000 and a
    fair value of $120,000 in exchange for a note with a carrying amount of $185,000. Casey has restructured debt twice in the last five years. Disregarding
    income taxes, what amount should Casey report as an ordinary gain in its income statement?

    A. $65,000
    B. $ 35,000
    C. $ 0
    D. $100,000
    You answered D. The correct answer is A.
    Casey would report an ordinary gain of $65,000: the difference between the obligation settled ($185,000) and the fair value of the asset
    transferred ($120,000).

    -Why is he gain not $100,000, you need to recognize the gain from carrying value to fair value and then from fair value to debt relieved. It also mentions ordinary gain and I thought there is no longer ordinary/extraordinary gains. Thanks for the help.

    #2167717
    MO
    Participant

    I got a TBS question about FASB AL code asking for disclosures required when a company contracts to do R&D for another. FAR AL seems to be more vague than AUD. Anyone know?

    AUD - 89
    BEC - 89
    FAR - 83
    REG - 80
    "Real business is done on paper" -- Michael Scott
    #2168872
    LL
    Participant

    @Timmyj
    I might not be 100% right, but just try to give you some thoughts.
    Your first question: the $2,000,000 belongs to Glen County’s employees. so its a liability.
    Your second question: I think this question is focus on ordinary/capital gain. The $35,000 might be the capital gain.

    AUD - 76
    BEC - 76
    FAR - 79
    REG - 80
    I am DONE!
    #2168947
    LL
    Participant

    @Timmyj correct myself
    Your second question: the $35,000 might be recorded under OCI, not ordinary gain.

    AUD - 76
    BEC - 76
    FAR - 79
    REG - 80
    I am DONE!
    #2170297
    rahil82
    Participant

    Hi Guys,
    Any easy way to learn deferred taxes? It’s really time consuming.

    Thank you

    #2170300
    rahil82
    Participant

    Hi Guys,
    Any easy way to learn deferred taxes? It’s really time consuming.

    Thank you

    #2171893
    SeanW
    Participant

    Two questions I’m struggling with (conceptually).

    1. When a Foreign Sub is required to use the Remeasurement Method, what is the journal entry to record the Currency Gain/Loss to balance R/E? Obviously one side is the Currency Gain/Loss Account used to affect Net Income; but I can’t picture what the other side is.

    2. The Deferred Tax Valuation Allowance Account – How is this account presented on the Balance Sheet and second, what happens to it over time? I realize it can be reversed if enough future income is generated; but what happens over time if no income is generated? Is it written off somehow and if so, what does that journal entry look like?

    Thank you.

Viewing 15 posts - 31 through 45 (of 380 total)
  • You must be logged in to reply to this topic.