December 31, 2018 at 4:29 am #2135767AnonymousParticipant
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?
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.January 1, 2019 at 7:49 pm #2140402
@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!January 2, 2019 at 11:53 pm #2144311stanParticipant
what is the correct answer if it is not conservatism ?January 3, 2019 at 12:02 am #2144326stanParticipant
Can we use plain paper for scratch paper at the prometric center rather than laminated papers? I am allergic to markersJanuary 3, 2019 at 7:46 pm #2146627CPAParticipant
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.January 7, 2019 at 2:11 pm #2153110CPAat33Participant
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!!January 8, 2019 at 2:30 pm #2155063PuppykoalaParticipant
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!January 9, 2019 at 5:26 pm #2156917timmyjParticipant
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
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
-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.January 10, 2019 at 9:18 am #2157898timmyjParticipant
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?
B. $ 35,000
C. $ 0
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
-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.January 16, 2019 at 5:03 pm #2167717MOParticipant
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?January 17, 2019 at 12:43 pm #2168872
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.January 17, 2019 at 1:29 pm #2168947
@Timmyj correct myself
Your second question: the $35,000 might be recorded under OCI, not ordinary gain.January 18, 2019 at 10:47 am #2170297rahil82Participant
Any easy way to learn deferred taxes? It’s really time consuming.
Thank youJanuary 18, 2019 at 10:47 am #2170300rahil82Participant
Any easy way to learn deferred taxes? It’s really time consuming.
Thank youJanuary 19, 2019 at 2:26 pm #2171893SeanWParticipant
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?
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