1. Land was acquired in 2016 for a future building site at a cost of $41,200. The assessed valuation for tax purposes is $28,200, a qualified appraiser placed its value at $48,800, and a recent firm offer for the land was for a cash payment of $45,800. The land should be reported in the financial statements at:

a.) $ 48,800.

b.) $ 28,200.

c.) $ 41,200.

d.) $ 45,800.

2. Tri Fecta, a partnership, had revenues of $379,000 in its first year of operations. The partnership has not collected on $46,100 of its sales and still owes $38,300 on $190,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $32,900 in salaries. The partners invested $44,000 in the business and $27,000 was borrowed on a five-year note. The partnership paid $3,240 in interest that was the amount owed for the year and paid $8,400 for a two-year insurance policy on the first day of business. Compute net income for the first year for Tri Fecta.

a.) $ 148,660

b.) $ 190,000

c.) $ 233,540

d.) $ 189,000

3. If a company has declared bankruptcy, its financial statements likely violate:

a.) The fair value measurement approach.

b.The present value measurement approach.

c.) The stable monetary unit assumption.

d.) The going concern assumption.

4. The full disclosure principle requires a balance between:

a.) Comparability and consistency.

b.) Relevance and cost-effectiveness.

c.) Reliability and neutrality.

d.) Timeliness and predictive value.

5. Revenue should not be recognized until:

a.) The seller has transferred goods or services to a customer.

b.) Contracts have been signed and payment has been received.

c.) Work has been performed and customer has been billed.

d.) Collection has been made and warrantees have expired.

6. Which of the following best demonstrates the full disclosure principle?

a.) The multi-step income statement.

b.) The auditors' report.

c.) The company's tax return.

d.) Disclosure notes to financial statements.

7. The matching principle is:

a.) A valuation method.

b.) An expense recognition accounting principle.

c.) A cash basis reporting principle.

d.) An asset classification procedure.

8.Ford Motor Company purchases services from suppliers on account and sells its products to distributors on short-term credit. As a result, do each of these events affect net income faster than they affect net operating cash flows?

Top of Form

	Purchase Services	Sell Products
a.	Yes	Yes
b.	Yes	No
c.	No	Yes
d.	No	No

a.) Option a

b.) Option b

c.) Option c

d.) Option d