Adm3340 Midterm Notes

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Ch12. 1. Technical feasibility of completing the intangible asset 2. The entity’s intention to complete it for use or sale 3. The entity’s ability to use or sell it 4. Availability of technical, financial, and other resources needed to complete it, and to use or sell it 5. The way in which the future economic benefits will be generated; including the existence of a market for the asset if it will be sold, or its usefulness to the entity if it will be used internally 6. The ability to reliably measure the costs associated with and attributed to the intangible asset during its development Ch13. Understanding Non-Financial and Current Liabilities Liability: an obligation that arises from past transactions or events, which…show more content…
FP date ASPE reclassify to current liability unless; the creditor waives the covenant in writing or the violation is cured or rectified within the grace period (usually given) and it is likely that the company will not violate the covenant requirements within a year from the date of the statement of financial position An entity may continue a long term classification if, and only if, at the date of the SFP the entity decides to refinance it or roll it over under an existing agreement for at least 12 months and the decision is solely at its discretion Preferred dividends in arrears are not an obligation until formal action is taken, disclose in notes Current Liabilities; Rents and royalties payable Customer advances and deposits Sales tax payable account liability for sales tax that has been collected from customers but not yet remitted to the appropriate government example: sale on account of 3,000 with a 4% sales tax Accounts receivable 3,120 Sales revenue 3,000 Sales tax payable 120 ** no effect on cash flows** GST tax tax is emitted from the inventory balance and a GST receivable account is created when buying example Inventory 150,000 GST receivable 7,500 A/P 157,500 GST payable account is created when selling, amount is included in A/R but omitted from Sales revenue example: A/R 220,500 Sales revenue 210,000 GST payable 10,500 Income Tax Current tax expense

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