1.A company makes a sale on April 12 and collects cash on the same day. This will result in a:

Select one:

a.A permanent difference

b.A temporary difference that will result in future deductible amounts and thus will give rise to a deferred income tax asset

c.A temporary difference that will result in future taxable amounts and thus will give rise to a deferred income tax liability

d.None of the above

2. Fines and expenses resulting from a violation of law will result in a:

Select one:

a.A permanent difference

b.A temporary difference that will result in future deductible amounts and thus will give rise to a deferred income tax asset

c.A temporary difference that will result in future taxable amounts and thus will give rise to a deferred income tax liability

d.None of the above

3.Service-type warranties are initially recognized as

Select one:

a.Sales Revenue

b.Accounts Payable

c.Warranty Expense

d.Unearned Revenue

4.Which of the follow statements is correct?

Select one:

a.One of the main indicators of whether control has passed to the customer is whether revenue has been earned.

b.One of the five steps in determining whether revenue should be recognized is whether the sale has been realized.

c.One of the criteria that contracts must meet to apply the revenue standard is that collectibility of the sales price must be reasonably possible.

d.None, all of the above are not correct

5. Interest is received on investments in tax-exempt government bonds. This will result in a:

Select one:

a.A permanent difference

b.A temporary difference that will result in future deductible amounts and thus will give rise to a deferred income tax asset

c.A temporary difference that will result in future taxable amounts and thus will give rise to a deferred income tax liability

d.None of the above

6. Schultz Fine Arts enters into a contract to build a sculpture for the Art Gallery of Buffalo. The contract is for $50,000 with a $10,000 performance bonus if the company can complete the sculpture one month early. Based on similar contracts in the past, Schultz believes that there is a 60% chance that the company can complete the project one month early. How should Schultz Fine Arts account for this revenue arrangement if the company uses the most likely outcome?

Select one:

a.$60,000

b.$50,000

c.$54,000

d.$56,000

7.In 2019, Intermediate Company had Revenue of $500,000 and operating expenses of $400,000. However, it received $20,000 in unearned revenue payments from its customers, which must be recognized for tax purposes. The tax rate is at 30% and is not expected to change in the future. The Deferred Tax Asset account would be debited by what amount?

Select one:

a.$6,000

b.$20,000

c.$0

d.$100,000

8.On January 1, 2020, Fraiser Corporation purchased 40% of the common shares of Niles Company for $411,000. During the year, River earned net income of $121,000 and paid dividends of $38,000. How much Investment Income would Fraiser Corporation record?

Select one:

a.$159,000

b.$63,600

c.$48,400

d.$121,000