26. Following the liquidation basis of accounting, employee compensation earned during the liquidation period is

a. Accrued in full at its estimated amount at the start of the liquidation process.

b. Accrued as it is earned.

c. Reported when paid.

d. Not reported.

27. Which SEC publications are similar to FASB Technical Bulletins?

a. Financial Reporting Releases

b. Staff Accounting Bulletins

c. Accounting and Auditing Enforcement Releases

d. Interpretive Letters

28. When the information provided to the SEC for a new security issue meets SEC requirements, this means that:

a. The information provides adequate disclosure of material facts concerning the company and the securities it proposes to sell.

b. The companys governance structure provides adequate internal controls over the financial information provided.

c. Independence requirements for the CEO, board of directors, and the audit committee have been met.

d. Financial information has been audited and given a clean audit opinion.

29. Xun, Yue and Zhuo have interests in XYZ Partnership. Partnership income for the year is $400,000. The partnership agreement specifies that Xun is to receive an annual salary of $200,000, Yue is to receive an annual salary of $50,000, and Zhuo is to receive an annual salary of $120,000. Any remaining income or loss is to be divided between the three partners in a 2:1:1 ratio. Salaries are to be fully implemented. Partnership income allocated to Zhuo is:

a. $112,500

b. $127,500

c. $120,000

d. $126,000

30. Xun, Yue and Zhuo have interests in XYZ Partnership. Partnership income for the year is $350,000. The partnership agreement specifies that Xun is to receive an annual salary of $200,000, Yue is to receive an annual salary of $50,000, and Zhuo is to receive an annual salary of $120,000. Any remaining income or loss is to be divided between the three partners in a 2:1:1 ratio. Salaries are to be fully implemented. Partnership income allocated to Yue is:

a. $40,000

b. $55,000

c. $50,000

d. $45,000