Multiple Choice Questions 1. Copyhouse Corporation has income before income tax of $160,000 and taxable income of

Question:

Multiple Choice Questions
1. Copyhouse Corporation has income before income tax of $160,000 and taxable income of $120,000. The income tax rate is 30%. Copyhouse€™s income statement will report net income of
a. $142,000.
b. $48,000.
c. $112,000.
d. $36,000.
2. Copyhouse Corporation in the preceding question must immediately pay income tax of
a. $112,000.
b. $36,000.
c. $48,000.
d. $84,000.
3. Use the Copyhouse Corporation data in question 39. At the end of its first year of operations, Copyhouse€™s deferred tax liability is
a. $12,000.
b. $20,000.
c. $36,000.
d. $28,000.
4. Which of the following items is most closely related to prior-period adjustments?
a. Preferred stock dividends
b. Retained earnings
c. Accounting changes
d. Earnings per share
5. Examine the statement of stockholders equity of Mason Electronics Corporation.
What was the market value of each share of the stock that Mason gave its stockholders in the stock dividend?
a. $3,000
b. $28
c. $42,000
d. $56

6. Which statement is true?
a. Independent auditors prepare the financial statements.
b. Management audits the financial statements.
c. GAAP governs the form and content of the financial statements.
d. The Public Company Oversight Board evaluates internalcontrols.

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...