Mastering Accounting Research For The CPA Exam 2nd Edition Anita L. Feller - Solutions

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Jamison received a note receivable in exchange for cash. At what amount should the note receivable be recorded in the balance sheet?
Ronan uses the equity method of accounting for its 25% interest in Rex Corporation.How should Ronan record its share of income from Rex?
On October 1, 2008, Ardent Corporation signed a contract to purchase 1,000 pieces of inventory from Company X for $100,000. The contract is irrevocable. In December 2008, Ardent learns that the inventory is worth only $85,000 and will be delivered in February 2009. Should Ardent recognize a loss in
Lorax Corporation pays a trucking company $300 to deliver items to its warehouse.These items will be sold to customers. How should Lorax classify the $300 paid to the trucking company?
A company chooses to use the percentage-of-completion method for recognizing revenue on construction projects. How does the company determine how much income to recognize the first year?
What is considered the date of the inception of a capital lease?
Can goodwill be amortized?
What are the conditions that must be met for revenue recognition purposes if a seller gives the buyer a right of return?
For purposes of foreign currency translations, what is the definition of an entity’s functional currency?
What are the five components of pension cost in a defined benefit pension plan?
How does a company determine if a transaction has commercial substance in a nonmonetary exchange?
Inventory is sometimes required to be stated at lower of cost or market. Define the term lower of cost or market as it relates to inventory valuation.
How should allowance for uncollectible accounts be disclosed in the financial statements?
How does a company value a small stock dividend?
What is the definition of a current liability?
What is a stock split?
What information regarding depreciation must be disclosed?
What is an extraordinary item?
What is the definition of a current asset?
Can the loss on disposal of a segment or component of a business be recorded as an extraordinary loss?
Huffman Corporation, a C Corporation, has taxable income of $180,000. At what tax rate will Huffman Corporation be taxed for federal income tax purposes?
Sheryl Patton, an individual taxpayer who is single, has a capital loss of $20,000 during the year. Sheryl also has a capital gain of $5,000 during the year. What amount can Sheryl deduct as a capital loss on her federal income tax return?
What is the maximum number of shareholders that can exist in an S Corporation?
How is the basis of a partner in a partnership calculated?
Landau has a net operating loss in 2008. What are the limits as to how many years the loss can be carried back or carried forward?
Storm Corporation was fined $10,000 for violating Environmental Protection Regulations.Can Storm Corporation deduct this amount on their federal income tax return?
Colfax Corporation estimates bad debt expense on its accrual basis income statement of$1,000. During the year, an $800 account receivable is determined to be worthless.What amount should Colfax deduct on the federal tax return for the bad debt?
Can a partnership deduct charitable contributions on its Form 1065 partnership tax return?
Tom Hancock receives interest on a registered local municipal bond. Should the interest be included as income in his federal income tax return?
Timothy Swift receives dividends from an investment in XYZ Corporation. Should the dividends be included in income on his federal income tax return?
Which sections of the Internal Revenue Code will have the rules for gain or loss on disposition of property?a. Sections 61-291.b. Sections 501-530.c. Section 701 through 799.d. Sections 1201 through 1299.
Which sections of the Internal Revenue Code will have the rules for computation of taxable income?a. Sections 61-291.b. Sections 501-530.c. Section 701 through 799.d. Sections 1201 through 1299.
Which sections of the Internal Revenue Code will have the rules for determining tax liability?a. Sections 1-59.a. Sections 61-291.b. Sections 501-530.d. Sections 1201 through 1299.
Which sections of the Internal Revenue Code will have the rules for partnerships?a. Sections 61-291.b. Sections 501-530.c. Section 701 through 799.d. Sections 1201 through 1299.
In what part of the Internal Revenue Code will you find the rules for S Corporations?a. Subchapter B.b. Subchapter C.c. Subchapter K.d. Subchapter S.
In what part of the Internal Revenue Code will you find the rules for corporate distributions and adjustments?a. Subchapter B.b. Subchapter C.c. Subchapter K.d. Subchapter S.
In what part of the Internal Revenue Code will you find the rules for partners and partnerships?a. Subchapter B.b. Subchapter C.c. Subchapter K.d. Subchapter S.
In tax research, what part of the code is cited in the answer?a. Chapter number.b. Subtitle number.c. Clause number.d. Section number.
Which of the following is a proper designation for a subchapter?a. Subchapter C.b. Subchapter 1.c. Subchapter IV.d. Subchapter (f).
The highest level of organization of the tax code isa. Subchapters.b. Subparagraphs.c. Subtitles.d. Sections.
Why are analytical procedures used in an audit?
For purposes of assessing internal controls in an audit, what is a control deficiency?
A CPA is asked to attest to prospective financial statements. What are the two types of uses for prospective financial statements?
What are the two types of sampling risks when performing substantive tests in auditing?
What are the five areas of internal control in the auditing standards?
In an audit, what is fraud and how does it differ from an accounting error?
In an audit, what is an adverse opinion?
What is a compilation of a financial statement?
What are the components of risk regarding the risk of material misstatement in an audit?
In an audit, what must an auditor understand about the entity?
Which of the following abbreviations is used in the standards to identify the rules for attestation engagements?a. AE.b. AT.c. AR.d. AU.
Which of the following abbreviations is used in the standards that include the code of professional conduct for CPAs?a. PC.b. RULE.c. ET.d. QC.
Which of the following abbreviations is used in the standards for a compilation and review?a. AR.b. CR.c. AU.d. AT.
A 9000 series number indicates which of the following?a. An auditing standard.b. An attestation standard.c. A compilation and review standard.d. An interpretation of a standard.
The auditing standards that address evidential matter are contained in which area of the infobase?a. AU 200 series.b. AU 300 series.c. AU 400 series.d. AU 500 series.
The rules for subsequent events would be found in which location in the auditing standards?a. AU 100 series.b. AU 300 series.c. AU 400 series.d. AU 500 series.
The fourth standard of reporting addresses which issue?a. Proficiency of the auditor.b. The exercise of due care.c. Substantive tests prior to the balance sheet date.d. Reports on audited financial statements.
The first, second, and third standard of reporting contained in the AU 400 series includes which of the following information?a. Proficiency of the auditor.b. Consistent application of GAAP.c. Independence of the auditor.d. Audit risk and materiality.
In what area of the auditing standards will the standards on how to conduct an audit be found?a. AU 100 series.b. AU 200 series.c. AU 300 series.d. AU 500 series.
In what area of the auditing standards are the standards for issuing the audit report?a. AU 200 series.b. AU 300 series.c. AU 400 series.d. AU 500 series.
Which standard outlines the conditions for probable, reasonably possible, and remote with regard to contingencies?a. ARB 43.b. APB 21.c. FAS 5.d. FAS 84.
Which standard identifies the disclosure of long-term obligations on the financial statements?a. ARB 43.b. FAS 47.c. FAS 91.d. FAS 144.
Where are the rules for earnings per share located in the infobase?a. FAS 115.b. ARB 43.c. FAS 128.d. APB 21.
For purposes of FAS 142, is goodwill an intangible asset?a. Yes.b. No.
The rules for accounting for a property dividend are included in which area of the infobase?a. ARB 43 in the stockholders’ equity area.b. APB 6 with the opinions on treasury stock.c. FAS 123 with share-based payments.d. APB 29 with nonmonetary exchanges.
Where will you find the accounting rules that explain the accounting treatment for compensated absences to employees?a. ARB 43.b. FAS 43.c. FAS 87.d. FAS 140.
Where would you most likely find the rules for revenue recognition for a sale that is made using the installment method of payment?a. APB 10.b. FAS 66.c. FAS 45.d. FAS 140.
A company holds investments securities as an asset and classifies them as a held-to-maturity investment. The company elects the fair value option for reporting the securities. Which of the following standards applies?a. APB 28.b. FAS 115.c. FAS 141.d. FAS 159.
Which of the following standards contains the rules for discontinued operations?a. FAS 13.b. FAS 95.c. FAS 144.d. FAS 160.
Which standard outlines the rules for accounting changes?a. FAS 5.b. FAS 128.c. FAS 141.d. FAS 154.
Which accounting standard outlines the requirements for related-party transactions?a. FAS 2.b. FAS 57.c. FAS 5.d. FAS 95.
Which accounting standard contains the accounting rules for accounting changes and error correction?a. FAS 141.b. FAS 145.c. FAS 151.d. FAS 154.
Which of the following standards defines trading securities, available-for-sale securities, and held-to-maturity securities?a. FAS 13.b. FAS 28.c. FAS 115.d. FAS 159.
Which of the following revised pronouncements changed the title of the pronouncement when it was revised?a. FAS 123(R).b. FAS 132(R).c. FAS 141(R).d. None of the above.
In which area of the accounting literature will you find the pronouncement for comprehensive income?a. Between FAS 10-20.b. Between FAS 70-90.c. Between FAS 123- 133.d. Between FAS 150-160.
Which financial accounting topic had several pronouncements that the delayed effective date until a new pronouncement was written?a. Leases.b. Pensions.c. Income taxes.d. Earnings per share.
Which of the following standards contains the rules for pension accounting?a. FAS 45.b. FAS 87.c. FAS 109.d. FAS 115.
Which of the following topics has several FASB statements that address additional accounting issues related to that topic?a. Contingencies.b. Statement of cash flows.c. Leases.d. Foreign currency translations.
Which of the following standards contains the rules for contingencies?a. FAS 5.b. FAS 27.c. FAS 48.d. FAS 109.
Which standard contains the rules for capital leases?a. FAS 2.b. FAS 5.c. FAS 13.d. FAS 47.
Gemstone Corporation repurchased 100 shares of its stock and subsequently resold those shares at a gain of $7 per share. Which accounting standard would identify the rules for accounting for the gain on the sale of the Gemstone stock?a. ARB 43.b. ARB 45.c. APB 6.d. APB 21.
Beach Company owns 35% of the stock of Costa Corporation and can exercise significant influence. Beach Company elects the fair value method for reporting its investment in Costa. Which standard would contain the appropriate accounting rules to value the stock of Costa?a. ARB 43.b. APB 18.c. FAS
In which area of the accounting standards will you find the rules for discontinued operations?a. ARB 43.b. APB 6.c. APB 30.d. FAS 144.
In which standard will you find the rules for the debtor for early extinguishment of debt?a. ARB 43.b. ARB 51.c. APB 6.d. APB 26.
In which standard will you find the definitions of current assets and current liabilities?a. APB 18.b. ARB 43.c. ARB 51.d. APB 21.
Which accounting standard outlines the disclosures of accounting policies?a. APB 6.b. ARB 43.c. ARB 51.d. APB 22.
Which standard outlines the accounting rules for extraordinary items?a. APB 22.b. APB 29.c. APB 30.d. APB 6.
Two Omnibus Opinions are included in the APB Opinions. Which of the following standards are the Omnibus Opinions?a. APB 10 and 12.b. APB 21 and 41.c. APB 30 and 42.d. APB 21 and 22.
In which area of APB 18 will you find the accounting rules for how to record income for an investee in which the company owns more than 30% of the outstanding stock?a. Discussion.b. Introduction.c. Definitions.d. Opinion.
Approximately how many Accounting Research Bulletins are in the authoritative literature that have not been superseded?a. One.b. Four.c. Ten.d. Twenty-two.
Which of the following citations is found in the Current Text?a. F10.108.b. ARB 43, par. 7.c. FIN 35, par. 3.d. FAS 5, par. 12.
If you wanted to research the footnote disclosures required for deferred taxes, where would you most likely find this information?a. At the beginning of FAS 109.b. In the middle of FAS 109.c. At the end of FAS 109.d. In the appendix of FAS 109.
Which of the following parts of a FASB Statement identifies what types of transactions are covered by the statement?a. Definitions.b. Disclosures.c. Scope.d. Accounting rules.
Which of the following standards has an Opinion paragraph that contains the accounting rules?a. ARBs.b. APBs.c. FASB Statements.d. AICPA Professional Standards.
Which of the following contains the oldest accounting standards?a. APBs.b. FASB Statements.c. AICPA SOPs.d. ARBs.
Which of the following is included in Category A in the hierarchy of Generally Accepted Accounting Principles?a. SFACs.b. ARBs.c. AICPA Interpretations.d. AICPA SOPs.
The FASB Concept Statements are considered the highest level of authoritative literature for GAAP.a. True.b. False.
The FASB Web site contains the updated standards with additions and changes.a. True.b. False.
A CPA candidate can find the answer more quickly by searching both the Original Pronouncements and the Current Text simultaneously.a. True.b. False.
The Original Pronouncements as Amended have superseded material shaded in gray.a. True.b. False.

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Mastering Accounting Research For The CPA Exam 2nd Edition Anita L. Feller - Solutions

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