1. (TCO 1) The FASB's standard-setting process includes, in the correct order, (Points : 6) exposure draft, research, discussion paper, and accounting standards update. research, exposure draft, discussion paper, and accounting standards update. research, discussion paper, exposure draft, and accounting standards update. discussion paper, research, exposure draft, and accounting standards update.

Question 2. 2. (TCO 1) The International Accounting Standards Board (Points : 6)

was the predecessor to the IASC. can overrule the FASB when their policies disagree. promotes the use of high-quality, understandable global accounting standards. has its headquarters in Geneva.

Question 3. 3. (TCO 2) The conceptual framework's qualitative characteristic of relevance includes (Points : 6)

predictive value. verifiability. completeness. neutrality.

Question 4. 4. (TCO 2) Enhancing qualitative characteristics of accounting information include each of the following, except (Points : 6)

timeliness. materiality. comparability. verifiability.

Question 5. 5. (TCO 3) Incurring an expense for advertising on an account would be recorded by (Points : 6)

debiting liabilities. crediting assets. debiting an expense. debiting assets.

Question 6. 6. (TCO 3) Accruals occur when cash flows (Points : 6)

occur before expense recognition. occur after revenue or expense recognition. are uncertain. may be substituted for goods or services.

Question 7. 7. (TCO 4) Which of the following accounts is not a current asset account? (Points : 6)

Cash in a checking account Savings account Six-month treasury bills Money orders

Question 8. 8. (TCO 4) Notes payable(s) (Points : 6)

is a current liability account. usually has a debit balance. is a noncurrent liability account. classification cannot be determined without additional information.

Question 9. 9. (TCO 5) The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its strategic focus, the company sold the automobile parts division. The division qualifies as a component of the entity according to GAAP regarding disposal of long-lived assets. How should Claxton report the sale in its 2011 income statement? (Points : 6)

Report it as an extraordinary item. Report it as a discontinued operation, reported below income from continuing operations. Report the income or loss from operations of the division in discontinued operations below continuing operations and the gain or loss from disposal in continuing operations. None of the above

Question 10. 10. (TCO 5) On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2012. The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2012. Foxtrot's income tax rate is 40%. In the 2012 income statement for Foxtrot Co., it would report (Points : 6)

$9.2 million. $13.2 million. $22 million. $26 million.

Question 11. 11. (TCO 8) In applying LCM, market cannot be (Points : 6)

less than net realizable value. greater than the normal profit. less than the normal profit margin. greater than net realizable value.

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