Questions from Advanced Accounting

Q: The Handbook describes revenue that is unique to NFPOs. What is

The Handbook describes revenue that is unique to NFPOs. What is this revenue called, and what characteristic does it have that makes it unique?

Q: Contrast the revenue recognition and matching concepts that apply to profit-

Contrast the revenue recognition and matching concepts that apply to profit-oriented organizations with those that apply to NFPOs.

Q: Explain how the revenue recognition principle supports the elimination of intercompany transactions

Explain how the revenue recognition principle supports the elimination of intercompany transactions when preparing consolidated financial statements.

Q: "The reduction of a $1,000 intercompany gross profit

"The reduction of a $1,000 intercompany gross profit from ending inventory should be accompanied by a $400 increase to deferred income taxes in consolidated assets." Do you agree? Explain.

Q: Explain how the matching principle supports adjustments to income tax expense when

Explain how the matching principle supports adjustments to income tax expense when eliminating intercompany profits from consolidated financial statements.

Q: A parent company rents a sales office to its wholly owned subsidiary

A parent company rents a sales office to its wholly owned subsidiary under an operating lease requiring rent of $2,000 a month. What adjustments to consolidated income tax expense should accompany the...

Q: "Intercompany losses recorded on the sale of assets to an affiliate

"Intercompany losses recorded on the sale of assets to an affiliate within the consolidated entity should always be eliminated when consolidated financial statements are prepared." Do you agree with t...

Q: Explain how an intercompany gain of $2,700 on the

Explain how an intercompany gain of $2,700 on the sale of a depreciable asset is held back on the consolidated income statement in the year of sale and realized on subsequent consolidated income state...

Q: Four approaches could be used to allocate gains (losses) on

Four approaches could be used to allocate gains (losses) on the elimination of intercompany bond holdings in the preparation of consolidated financial statements. Outline these four approaches. Which...

Q: An interest elimination gain (loss) does not appear as a

An interest elimination gain (loss) does not appear as a distinguishable item on a consolidated income statement. Explain.