Question 1 Correct Marked out of 5.00
Flag question
Question 2 Correct Marked out of 5.00
Flag question
Question 3 Correct Marked out of 5.00
Flag question
Started on Sunday, November 9, 2014, 10:13 PM State Finished Completed on Monday, November 10, 2014, 12:33 AM Time taken 2 hours 20 mins
The following applies to the Matt Company for 2006:
Loss on sale of an automobile $4,000 Purchase of Ithaca bonds (face value $400,000) $375,000 Proceeds from sale of machinery $200,000 Dividends paid $25,000 Proceeds from sale of treasury stock $100,000
Based on this information, the amount to be reported as net cash from financing activities is…
Select one: A. $(25,000). B. $30,000. C. $75,000. D. $80,000.
The rationale behind the rules for multiple-step income statements is to subdivide the statement in a manner that facilitates…
Select one: A. cash flows. B. forecasting and ease of interpretation/analysis. C. tax return preparation. D. audits.
The sale of receivables to a third party is called…
Select one: A. factoring. B. collateralizing. C. discounting. D. securitization.
Quiz navigation
Finish review
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58
Course Tools:
My home ▶ FIN 506  ▶ Week Six ▶ Midterm Exam
Question 4 Correct Marked out of 5.00
Flag question
Question 5 Correct Marked out of 5.00
Flag question
Question 6 Correct Marked out of 5.00
Flag question
Question 7 Correct Marked out of 5.00
Flag question
Question 8 Correct Marked out of 5.00
Flag question
Pipe Corporation reported cost of goods sold of $250,000 for 2006. It also reported an increase in inventory for the year of $30,000, and an increase in accounts payable of $24,000. Pipe would report cash paid to suppliers in 2006 under the direct method for cash flows of…
Select one: A. $250,000. B. $256,000. C. $280,000. D. $304,000.
The appropriate time to recognize revenue is
Select one: A. defined by GAAP for every situation B. the same for every industry C. dependent upon the nature of the business or industry D. easily defined by the FASB
The following relates to Data Original Company in 2006. What is the company’s ending inventory? Purchases $540,000 Beginning Inventory 80,000 Purchases returned by Data Original to its suppliers in 2006 10,000 Sales 800,000 Cost of goods sold 490,000
Select one: A. $120,000 B. $140,000 C. $210,000 D. $260,000 E. none of the above
The Canon Corporation sells ten copiers to the Title Company on October 15 for $40,000. Canon delivers the copiers to Title on October 20; Title pays $16,000, and agrees to pay the balance on November 10. Under the cash basis method of accounting, how much revenue is recognized in October?
Select one: A. $0 B. $16,000 C. $24,000 D. $40,000
Which of the following statements is false?
Select one: A. Asset accounts typically carry debit balances B. Liability accounts typically carry credit balances C. Revenue accounts typically carry debit balances D. Equity accounts typically carry credit balances
Question 10 Correct Marked out of 3.00
Flag question
Question 11 Incorrect Marked out of 5.00
Flag question
Question 12 Correct Marked out of 3.00
Flag question
Question 13 Correct Marked out of 5.00
Flag question
Question 14 Correct Marked out of 3.00
Flag question
Question 15 Incorrect Marked out of 5.00
Flag question
Question 9 Correct Marked out of 3.00
Flag question
The balance sheet is an expression of the accounting equation.
Select one: True False
Many receivables recognition irregularities can be discovered by tracking the relationship between changes in sales and changes in receivables.
Select one: True False
Which of the following is not an underlying assumption/concept upon which GAAP is established?
Select one: A. The Going-Concern assumption B. The FASB Concept of Commonality C. The Matching Concept D. The Concept of Materiality E. Full Disclosure
The principle/concept of “matching” involves recognizing expenses in the same period in which revenue generated by these expenses are recognized
Select one: True False
If the critical event and measurability conditions are not satisfied, revenue may be recognized after the sale…
Select one: A. when legal ownership passes to the seller. B. when cash is collected. C. as the goods are shipped. D. on the receipt of goods by the customer.
Property tax expense is an item that would appear below the Net Operating Income line on the multi-step format Income Statement.
Select one: True False
A company purchases a piece of equipment and plans on depreciating it using straight-line depreciation for financial statement purposes, and an accelerated method of depreciation for tax purposes. Taking this into consideration, which of the following is true for the first year of the equipment’s depreciation?
Select one: A. This approach will reduce my net income as reported on the financial statements to investors and thereby reduce my taxes – a benefit to my investors. B. Applying the two different depreciation methods above between book accounting and tax
Question 16 Correct Marked out of 5.00
Flag question
Question 17 Correct Marked out of 5.00
Flag question
Question 18 Correct Marked out of 5.00
Flag question
Question 19 Correct Marked out of 5.00
Flag question
Question 20 Correct Marked out of 3.00
Flag question
Question 21 Correct Marked out of 3.00
Flag question
accounting will result in a deferred income tax liability. C. The above scenario will result in a greater tax bill to me from the IRS D. Recording the taxes due under the above scenario will require a debit to cash or taxes payable, and a credit to tax expenses and deferred taxes. E. None of the above are true.
The network of conventions, rules, guidelines, and procedures used by the accounting profession is known as generally accepted…
Select one: A. auditing standards. B. accounting procedures. C. accounting principles. D. auditing principles.
The direct approach and the indirect approach are two alternative methods of presenting cash flows from…
Select one: A. investing activities. B. operating activities. C. financing activities. D. research activities.
Which one of the following businesses is likely to recognize revenue during the production phase?
Select one: A. Mining company B. Cruise ship builder C. Citrus grower D. Department store
Balance sheets prepared in compliance with GAAP can actually reflect a mixture of…
Select one: A. historical cost and future cash values. B. current value and discounted future cash flows. C. discounted cash flows and future values. D. historical cost, fair value, net realizable value, and discounted present values.
Prior to the establishment of the SEC in the 1930’s, the requirements for financial reporting had little regulatory support and were generally dictated by the New York Stock Exchange for those stocks that traded on that particular exchange.
Select one: True False
Cash flows arising from transactions related to the production and delivery of goods and services are classified as Operating Activities.
Select one: True
Question 22 Correct Marked out of 3.00
Flag question
Question 23 Correct Marked out of 5.00
Flag question
Question 24 Correct Marked out of 5.00
Flag question
Question 25 Correct Marked out of 3.00
Flag question
False
The Financial Accounting Standards Board has the sole responsibility for setting generally accepted auditing standards.
Select one: True False
The following applies to the Matt Company for 2006:
Loss on inventory write-off $4,000 Purchase of Ithaca bonds (face value $400,000) $375,000 Proceeds from sale of machinery $200,000 Dividends paid $25,000 Proceeds from sale of treasury stock $100,000 Based on this information, the amount to be reported as net cash from investing activities is…
Select one: A. $(175,000). B. $(150,000). C. $87,500. D. $575,000.
Which of the following statements is correct?
Select one: A. The direct approach and the indirect approach are two alternative methods of presenting cash flows from investing activities B. FASB recommends using the direct method of preparing the statement of cash flows while the method used by the majority of firms is the indirect method C. The Indirect Method of presenting the Cash Flow Statement is not allowed by the SEC. If companies show their Cash Flow Statement using this method, they also have to show the Cash Flow Statement using the Direct Method D. When it comes to the Financing and Investing Activities sections of the Cash Flow Statement, there is no difference between the Direct and Indirect Method of Cash Flow Statement reporting
The term “Equity Income” that appears on the Income Statement refers to additional capital that has been contributed to my company from equity shareholders.
Select one:
Question 26 Correct Marked out of 5.00
Flag question
Question 27 Incorrect Marked out of 3.00
Flag question
Question 28 Correct Marked out of 5.00
Flag question
Question 29 Correct Marked out of 5.00
Flag question
Question 30 Correct Marked out of 5.00
Flag question
Question 31 Correct Marked out of 5.00
Flag question
True False
I have determined the annual depreciation expense for my company’s office equipment and am now ready to record the expense. How should I record this expense?
Select one: A. Debit “Accumulated Depreciation – Office Equipment” and credit “Depreciation Expense Office Equipment” B. Credit “Accumulated Depreciation – Office Equipment” and debit “Depreciation Expense Office Equipment” C. Debit “Office Equipment” and credit “Depreciation Expense – Office Equipment” D. Credit “Cash” and debit “Depreciation Expense – Office Equipment” E. You do not need to record this transaction because it does not involve cash
The term “Minority-interest” is an item that may appear on both the Income Statement and Balance Sheet and it develops only when one company owns greater than 50% of the voting stock of another company.
Select one: True False
Accumulated depreciation is a/an…
Select one: A. expense account. B. liability account. C. contra-asset account. D. owners’ equity account.
Which of the following is a measure of how readily assets can be converted to cash relative to how soon liabilities will have to paid in cash?
Select one: A. Capital structure B. Maturity structure C. Solvency D. Liquidity
Studies have found that actual corporate earnings
Select one: A. fall randomly around the consensus estimate B. tend to be at or above the forecast C. almost never seem to beat estimates, no matter what the economic conditions D. are rarely close to analysts’ forecasts
Current assets are assets expected to…
Select one: A. be converted to cash within twelve months. B. be converted to cash within twelve months or one operating cycle if it is longer than twelve
Question 32 Correct Marked out of 3.00
Flag question
Question 33 Correct Marked out of 5.00
Flag question
Question 34 Incorrect Marked out of 5.00
Flag question
Question 36 Correct Marked out of 5.00
Flag question
Question 37 Correct Marked out of 5.00
Flag question
Question 35 Correct Marked out of 3.00
Flag question
months. C. remain on the books for at least twelve months. D. remain on the books for at least twelve months or one operating cycle if longer than twelve months.
Depreciation is added back to net income as a step in determining cash from operating activities under the indirect method.
Select one: True False
The Financial Accounting Standards Board has responsibility for the establishment of U. S. accounting standards and…
Select one: A. full statutory power to enforce compliance with GAAP. B. authority from the SEC to enforce compliance with GAAP. C. no authority or responsibility to enforce compliance with GAAP. D. responsibility imposed by AICPA to enforce compliance with GAAP.
When a company changes from one depreciation method to another, the change is reported
Select one: A. prospectively only because it is impractical to determine the effect on prior years B. as an error correction, restating prior years C. as a change in an accounting estimate, without restatement D. as a change in accounting principle, with prior years restated
Operating activities result from the cash effects of producing and delivering goods and services.
Select one: True False
Which of the following is a true statement?
Select one: A. Revenues decrease owners’ equity and increase liabilities. B. Expenses increase owners’ equity and decrease liabilities. C. Revenues increase owners’ equity and expenses decrease owners’ equity. D. Revenues decrease owners’ equity and expenses increase owners’ equity.
The fair value of in-process R & D is…
Select one: A. difficult to measure but easy to verify. B. easy to measure but difficult to verify. C. difficult to measure and verify. D. easy to measure and verify.
The matching principle requires that bad debts be treated as an expense in the period…
Question 38 Correct Marked out of 5.00
Flag question
Question 40 Correct Marked out of 5.00
Flag question
Question 41 Correct Marked out of 5.00
Flag question
Question 42 Correct Marked out of 5.00
Flag question
Question 43 Correct Marked out of 3.00
Flag question
Question 39 Correct Marked out of 3.00
Flag question
Select one: A. the sale is made. B. the customer files bankruptcy. C. in which the debt becomes six months past due. D. a court declares it to be uncollectible.
A contra account is an account that is subtracted from a related account.
Select one: True False
Bruce Company reported net income for 2006 of $100,000. The company reported depreciation expense of $17,500 and amortization of $5,000. Based only on this information, the company would report cash flow from operations of…
Select one: A. $117,500. B. $120,000. C. $127,500. D. $122,500.
At the beginning of the year, Acme Company had: – total assets of $200,000 – total liabilities of $110,000 – retained Earnings of $50,000 – total shareholders’ equity of $90,000 During the year Acme: – earned net income of $75,000 – declared cash dividends of $30,000. At the end of the year, Acme had: – total assets of $300,000 – total shareholders’ equity of $135,000 What was the balance of Retained Earnings at the end of the year?totaled:
Select one: A. $125,000 B. $75,000 C. $95,000 D. $165,000 E. None of the above
An increase in a liability may be offset by
Select one: A. a corresponding decrease in an asset B. a decrease in another liability account C. a corresponding increase in owner’ equity D. an increase in another liability account
The change in cash during a period is equal to the net income for the period.
Select one: True
Question 44 Incorrect Marked out of 3.00
Flag question
Question 45 Correct Marked out of 5.00
Flag question
Question 46 Correct Marked out of 3.00
Flag question
Question 47 Incorrect Marked out of 5.00
Flag question
Question 48 Correct Marked out of 3.00
Flag question
Question 49 Correct Marked out of 3.00
Flag question
Question 50 Incorrect Marked out of 5.00
Flag question
False
Assuming a company has established a reserve for uncollectible accounts, the net realizable value of accounts receivable is decreased when a bad debt is written off.
Select one: True False
Any increase in an asset may be offset by…
Select one: A. a corresponding decrease in a liability. B. a decrease in some other asset account. C. a corresponding decrease in owner’ equity. D. an increase in another asset account.
The correction of an error causes previous year financial statements to be retroactively restated for comparative purposes.
Select one: True False
A large portion of inventory is outdated and will not likely be sold. Identify the correct treatment.
Select one: A. Nothing, the inventory is recorded correctly at its historical cost B. Write the inventory account down to its market value and recognize the loss C. Write the inventory account down to its market value and create a contra-asset account D. Dispose of the worthless inventory at the best price possible and recognize the proceeds in other gains and losses
Marketable securities such as investments in short-term U.S. Treasury bills or the commercial paper of other companies are so liquid (easily converted to cash) that they are often totaled with cash and considered to be a cash equivalent.
Select one: True False
Generally accepted accounting principles allows choice and flexibility such that managers can manipulare how earnings are reported.
Select one: True False
The balance sheet provides information on all of the following except for…
Select one: A. how management invested its money. B. where the money came from.
Question 51 Correct Marked out of 5.00
Flag question
Question 52 Correct Marked out of 5.00
Flag question
Question 53 Correct Marked out of 3.00
Flag question
Question 54 Correct Marked out of 5.00
Flag question
Question 55 Correct Marked out of 3.00
Flag question
Question 56 Incorrect Marked out of 3.00
Flag question
C. the relationship between debts and equity. D. ascertaining stock market prices.
Identify the false statement.
Select one: A. Corporations help shield their owners from the liabilities of the corporation. B. Sole Proprietorships generally have little or no required financial reporting obligations. C. An LLC is a limited liability company. D. The SEC requires greater levels of reporting for partnerships than for sole proprietorships.
E. Publicly-traded Corporations face greater reporting requirements than the typical sole proprietorship or partnership.
A company has $80,000 of assets and $70,000 of total stockholder’s equity on its books. What is the total amount of this company’s liabilities?
Select one: A. $150,000 B. No answer-it’s a negative number C. $70,000 D. $80,000 E. $10,000
The principle/concept of “conservatism” involves using GAAP except in those instances where it would be difficult or expensive and where it makes no real difference to the reader’s ability to make reasonable assessments.
Select one: True False
The amount of income taxes recognized on the income statement but not yet payable to the government are found on the…
Select one: A. balance sheet in the account Deferred Income Taxes. B. balance sheet in the account Income Taxes Payable. C. income statement in the account Income Tax Expense Current. D. income statement in the account Income Tax Expense Deferred.
Firms using the indirect approach must separately disclose the amount of income taxes paid and interest paid.
Select one: True False
Cash flows arising from the purchase or sale of productive assets are cash flows from operating activities.
Select one: True
You are logged in as Luke Hensley (Logout) FIN 506 FA2014_V
Question 57 Incorrect Marked out of 5.00
Flag question
Question 58 Correct Marked out of 5.00
Flag question
False
Identify the true Statement:
Select one: A. Extraordinary items are gains or losses that are either infrequent in occurrence or unusual in nature B. If the value of my land rises relative to the figure that appears on my Balance Sheet, GAAP requires that I recognize an unrealized gain on the land in my Income Statement. C. Copyrights, Patents and Goodwill are examples of Tangible assets. D. I should only recognize revenue when I have received payment from my customer. E. All of the above statements are false.
Common justifications for changing accounting methods include all of the following EXCEPT:
Select one: A. to conform to industry practice B. to represent the company’s activities more accurately C. to conform to a new pronouncement by the FASB D. to improve the appearance of the firm’s financial position