Studied by 4 people
Looks like no one added any tags here yet for you.
Gift Cards
Form of Deferred Revenue
If Gift Cards Are Redeemed Or Used By Customers Report As
Sales Reveune
Gift Card Breakage
If Gift Cards Expire Before Use
Contingent Liabilities
an existing uncertin situation that might result in a loss depending on the outcome of future events
Likelihood of Payment-
Probable- Likely to Occur
Reasonably Possible
Remote- The Chance Is Slight
Amount of Payment Options
Reasonably Estimable
Not Reasonably Estimable
For Contingent Liabilities When Do You Write A Journal Entry
Probable and Resonably Estimable
For Contingent Liabilities When Do You Write A Journal Entry When There is A Range
Record Minimum Amount
Property, Plant, Equitment Definition
Costs Plus All Expenses Necessary To Get Asset Ready For Use
Property, Plant, Equitment Examples
Land, Land Improvements, Buildings, Equitment
Basket Purchase
Purchase More Than One Asset At The Same Time For One Puchase Price
Expense
officially count it as a cost in your financial records
Capitalize
to record a cost as an asset, not an expense
Intangibles
Assets with no physical substance
How To Acquire Intangibles
Purchase- Record their original cost plus other costs needed to get asset ready to use
Research and Develop- If Asset is internally expensed we incur the cost since it is hard to determine what will benifit us in the future.
Goodwill
When Compnay buys other company they pay for the assets as well as the good name and reputation
Expenditures After Acquisition- Capitalize
If It Increases Future Benefits
Expenditures After Acquisition- Expense
If It Only Benefits the Current Years
Repairs
Expenditures After Acquisition-Materiality
Large Enough to Influence A Decision
If Not Materiality (you dont care) Expense it
Service Life (Useful Life)
How Long You Plan to Use Assets
Residual Value (Salvage Life)
The Price You Think You Can Get For Selling Asset
Allocate
the process of assigning or distributing costs, income, or expenses to different accounts
Describe the Stright Line Allocation
Has an equal amount of depreciation each year
Describe Double-Declining Ballance Allocation
Accelerated Method, more depreciation expense is taken in earlier years
Describe Activity Based Allocation
Activity associated with the assets
Most commonly used with natural resources
Amortization Defined
Gradually pay off intangibles over time through regular payments.
What kind of intangibles are subject to amortization
Intangibles with a finite useful life
For Intangibles With a Finite Useful Life
Residual Value is Zero
Use the Straight-line Method
Credit Amortization to Intangible asset account
What kind of intangibles are NOT subject to amortization
Intangibles with an infinite useful life- Land, Goodwill
Debit or Credit a Gain
Credit
Debit or Credit a Loss
Debit
