ACCT 3110 Intermediate Financial Accounting I Fall 2021 Review Test 4 Big Picture What is the overall goal of this Exam I want to see evidence that you understand the accounting principles methods and techniques applied to o the measurement of inventory at the end of a reporting period o estimating ending inventory and COGS using the gross profit and retail inventory methods intangible assets o the acquisition use disposition and valuation of property plant and equipment and o expenditures for research and development and for software development Note if you did not read and study chapters 9 10 and 11 of the textbook complete the quiz and homework on these chapters review the example problems from class sessions covering this material and work additional practice problems as necessary to ensure you 1 understand the accounting principles methods and techniques and 2 can apply these to practice problem fact patterns discerning the data and information from these that are applicable to the question being asked and use this information to successfully solve this question you may not be adequately prepared for this exam Specific accounting principles methods and techniques eligible for testing on this exam include o Lower of cost or net realizable value inventory valuation you should know when this rule applies and be able to determine the appropriate inventory measurement amount from inventory cost data o Lower of cost or market inventory valuation you should know when this rule applies and be able to determine the appropriate inventory measurement amount from inventory cost data o Gross Profit method of estimating inventory you should know the circumstances in which is method can be used and be able to calculate ending inventory and COGS from data provided o Retail method of estimating inventory Average cost method you should know the circumstances in which is method can be used and be able to calculate ending inventory and COGS from data provided Conventional retail method Same as average cost method You should understand how these methods approximate the various cost flow methods and how the lower of cost or market rule can also be evaluated using these methods o Purchase commitments you should understand the nature of these and be able to apply the loss recognition principle to these contracts o Costs to be Capitalized for property plant and equipment and intangible asset acquisitions you should understand and be able to apply to each tangible and intangible asset category the principle that all costs including the purchase price and all expenditures necessary to bring the asset to its desired condition and location for use including Asset Retirement Obligations should be capitalized o Allocation of cost on Lump Sum purchases of long term assets you should understand and be able to apply the allocation of a lump sum purchase price to the assets acquired using the related market values of the assets o Noncash Acquisitions Deferred payments you should understand and be able to apply the valuation rule applicable to asset acquisitions when a non interest bearing note is given in exchange Issuance of equity securities you should understand how to value an asset when equity securities are given in exchange Donated assets you should understand how to value an asset when it is donated and how to record it Non Monetary Exchanges you should understand and be able to apply the four step process of recording an asset acquired in exchange for another asset and possibly additional cash or other consideration o Self constructed Assets Overhead allocation you should understand how overhead costs should be allocated to the cost of self constructed assets Interest capitalization you should understand how and when interest costs should be capitalized with the other costs of self constructed assets and be able to apply these rules to fact patterns given o Research and Development costs you should understand the nature of research and development costs and be able to apply the rule for how these costs are normally accounted for by enterprises carrying out these activities Exceptions for Software Development costs you should understand and be able to apply the exception to the general rule for these costs R D services performed for others same as software development costs R D purchased in business acquisition same as software development costs o Start up and organizational costs you should understand the nature of these costs and be able to apply the rule for how these costs are normally accounted for o Depreciation Depletion and Amortization What are these Measuring you should understand the three factors used to measure cost allocation Depreciation Methods you should understand and be apply to apply the straight line and accelerated depreciation methods Partial period depreciation you should understand and be able to calculate partial period depreciation Dispositions Sale you should understand and be able to record a disposition involving a sale Assets Held for Sale you should understand and be able to record a disposition involving Assets Held for Sale Retirements you should understand and be able to record a disposition involving a retirement Depletion Method you should understand and be able to apply the units of production depletion method Amortization Intangible assets amortized you should be able to identify intangible assets that are subject to amortization Intangible assets not amortized you should be able to identify intangible assets that are NOT subject to amortization Amortization methods you should understand and be able to apply the straight line method of amortization o Impairment of long term asset values you should understand and be able to apply the principles and methods surrounding asset impairment including Held and used Testing for PP E and finite life intangible assets o When to test o Steps to test and measure if asset is impaired Indefinite life intangible assets o When to test o Measurement Held for sale See above under dispositions o Expenditures subsequent to long term asset acquisition Expense or capitalize you should understand and be apply to apply the principles applicable to expensing or capitalizing expenditures subsequent to acquisition Stats on the test True False 13 Multiple Choice 87 Suggestions for studying o 20 questions with equal weight to chapters 9 10 and 11 o 40 questions with equal weight to chapters 9 10 and 11 1 Skim each chapter to refresh your