Multiple-choice questions:
a. Which of the following accounts would not appear on a conventional balance sheet?
1. Accounts Receivable
2. Accounts Payable
3. Patents
4. Gain from Sale of Land
5. Common Stock
b. Current assets typically include all but which of the following assets?
1. Cash restricted for the retirement of bonds
2. Unrestricted cash
3. Marketable securities
4. Receivables
5. Inventories
c. The Current Liabilities section of the balance sheet should include
1. Land.
2. Cash Surrender Value of Life Insurance.
3. Accounts Payable.
4. Bonds Payable.
5. Preferred Stock.
d. Inventories are the balance of goods on hand. In a manufacturing firm, they include all but which of the following?
1. Raw materials
2. Work in process
3. Finished goods
4. Supplies
5. Construction in process
e. Which of the following accounts would not usually be classified as a current liability?
1. Accounts Payable
2. Wages Payable
3. Unearned Rent Income
4. Bonds Payable
5. Taxes Payable
f. For the issuing firm, redeemable preferred stock should be classified where for analysis purposes?
1. Marketable security
2. Long-term investment
3. Intangible
4. Liabilities
5. Shareholders’ equity
g. Which of the following accounts would not be classified as an intangible?
1. Goodwill
2. Patent
3. Accounts Receivable
4. Trademarks
5. Franchises
h. Which of the following is not true relating to intangibles?
1. Research and development usually represents a significant intangible on the financial statements.
2. Goodwill arises from the acquisition of a business for a sum greater than the physical asset value.
3. Purchased goodwill is not amortized but is subject to annual impairment reviews.
4. The global treatment of goodwill varies significantly.
5. Intangibles are usually amortized over their useful lives or legal lives, whichever is shorter.
i. Growth Company had total assets of $100,000 and total liabilities of $60,000. What is the balance of the stockholders’ equity?
1. $0
2. $40,000
3. $60,000
4. $100,000
5. None of the above
j. The Current Assets section of the balance sheet should include
1. Inventory.
2. Taxes Payable.
3. Land.
4. Patents.
5. Bonds Payable.
k. Which of the following is not a typical current liability?
1. Accounts payable
2. Wages payable
3. Interest payable
4. Pension liabilities
5. Taxes payable
l. Which of the following is a current liability?
1. Unearned rent income
2. Prepaid interest
3. Land
4. Common stock
5. None of the above
m. Treasury stock is best classified as a
1. Current liability.
2. Current asset.
3. Reduction of stockholders’ equity.
4. Contra asset.
5. Contra liability.
n. Considering IFRSs, which of the following statements would be considered false?
1. IFRSs do not require a standard format for the balance sheet.
2. With IFRSs, usually nonconcurrent assets are presented first, followed by current assets.
3. Under IFRS for liabilities and owners’ equity, capital and listed reserves are usually listed first, then noncurrent liabilities and then current liabilities last.
4. The reserves section of capital and reserves would not be part of U.S. GAAP.
5. All of these items would be considered to be true.
o. Considering IFRSs, which of the following statements would be considered false?
1. When using IFRSs, local laws or securities regulations may specify disclosures in addition to those required by IFRSs.
2. IAS introduced a number of terminology changes. The new titles for the financial statements are not mandatory.
3. The IFRS model consolidated balance sheet, as presented by Deloitte Touche, puts an emphasis on liquidity.
4. Under IFRS, noncontrolling interests are usually presented as the last item in total equity.
5. None of these statements would be considered false.