[33] What is the purpose of information presented in notes to the financial statements?

A. To provide disclosures required by generally accepted accounting principles.

B. To correct improper presentation in the financial statements.

C. To provide recognition of amounts not included in the totals of the financial statements.

D. To present managements responses to auditor comments.

[34] According to the FASBs conceptual framework, certain assets are reported in financial statements at the amount of cash or its equivalent that would have to be paid if the same or equivalent assets were acquired currently. What is the name of the reporting concept?

A. Replacement cost.

B. Current market value.

C. Historical cost.

D. Net realizable value.

[35] Costs that can be reasonably associated with specific revenues but not with specific products should be

A. Charged to expense in the period incurred.

B. Allocated to specific products based on the best estimate of the production processing time.

C. Expensed in the period in which the related revenue is recognized.

D. Capitalized and then amortized over a period not to exceed 60 months.

[36] When bad debt expense is estimated on the basis of the percentage of past actual losses from bad debts to past net credit sales, and this percentage is adjusted for anticipated conditions, the accounting concept of

A. Matching is applied.

B. Matching is not applied.

C. Substance over form is applied.

D. Going concern is not applied.

[37] According to the FASBs conceptual framework, a department store ordinarily recognizes revenue when

A. Merchandise to be held for resale is received from suppliers.

B. Payment is received from customers.

C. Customers receive merchandise.

D. Preparation of merchandise for resale has been completed.