1. Financial information demonstrates consistency when ///

A firms in the same industry use different accounting methods to account for the same type of transaction.

B a company uses the same method for depreciation from year to year on its financial statements.

C a company fails to adjust its financial statements for changes in the value of the measuring unit.

D all of the above

1. The cash method of accounting ? ///

is used by most publicly traded corporations for financial statement purposes.

is not in accordance with the matching principle for most publicly traded corporations.

often is used on the income statement by large, publicly held companies.

All of the above

• Which of the following is an ingredient of faithful representation? ///

	A.	Materiality.
	B.	Predictive value.
	C.	Confirmatory value.
	D.	Neutrality.

4 The two fundamental qualities that make accounting information useful for decision making are ///

	A.	comparability and timeliness.
	B.	faithful representation and comparability.
	C.	relevance and faithful representation.
	D.	materiality and neutrality.

5 Which of the following elements of financial statements is not a component of comprehensive income?

	A.	Distributions to owners
	B.	Expenses
	C.	Revenues
	D.	Losses

6 Which basic element of financial statements arises from peripheral or incidental transactions?

	A.	Liabilities.
	B.	Assets.
	C.	Gains.
	D.	Expenses.

7 Which basic assumption may not be followed when a firm in bankruptcy reports financial results?

	A.	Monetary unit assumption.
	B.	Economic entity assumption.
	C.	Going concern assumption.
	D.	Periodicity assumption.

8 Balance sheet information is useful for all of the following except to ///

compute rates of return.

analyze cash inflows and outflows for the period.

evaluate capital structure.

assess future cash flows.

9 The balance sheet contributes to financial reporting by providing a basis for all of the following except //

computing rates of return.

evaluating the capital structure of the enterprise.

determining the increase in cash due to operations.

assessing the liquidity and financial flexibility of the enterprise.

10 Accounting information is considered to be relevant when it

a. can be depended on to represent the economic conditions and events that it is intended to represent.

b. is capable of making a difference in a decision.

c. is understandable by reasonably informed users of accounting information.

d. is verifiable and neutral.

10 Which of the following would be classified in a different major section of a balance sheet from the others? /// a. Capital stock b. Common stock subscribed c. Stock dividend distributable d. Stock investment in affiliate

11 Which item below is not a current liability? ///

a. Unearned revenue

b. Stock dividends distributable

c. The currently maturing portion of long-term debt

d. Trade accounts payable

12 Financial information exhibits the characteristics of consistency when /// a. expenses are reported as charges against revenue in the period in which they are paid. b. accounting entities give accountable events the same accounting treatment from period to period. c. extraordinary gains and losses are not included on the income statement. d. accounting procedures are adopted which give a consistent rate of net income.

13 The current assets section of the balance sheet should include ///

accounts receivables.

long-term debt.

retained earnings.

patents.

14 Ahnen Company owns the following investments. /// Trading securities (fair value) $70,000 Available-for-sale securities (fair value) 40,000 Held-to-maturity securities (amortized cost) 47,000 What will Ahnen report investments in its current assets section?

$0

Exactly $70,000

$70,000 or an amount greater than $70,000, depending upon the circumstances

Exactly $110,000

(TCO A) Why are some of the major differences between iGAAP and U.S. GAAP? Explain in detail??

(TCO C) Blue Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 201X, included the following expense accounts. Accounting and legal fees $150,000 Advertising $125,000 Freight-out $65,000 Interest $80,000 Loss on sale of long-term investments $35,000 Officers' salaries $200,000 Rent for office space $160,000 Sales salaries and commissions $110,000

One half of the rented premises are occupied by the sales department. How much of the expenses listed above should be included in Perry's general and administrative expenses for 201X?

• (TCO C) For the year ended December 31, 201X, King Inc. reported the following. Net income $60,000 Preferred dividends declared $10,000 Common dividend declared $2,000 Unrealized holding loss, net of tax $1,000 Retained earnings, beginning balance $80,000 Common stock sold during the year Retained earnings, beginning balance $80,000 Common stock $40,000 Accumulated Other Comprehensive Income, Beginning Balance $5,000 What would Transformers report as the ending balance of retained earnings?

(TCO C) For the year ended December 31, 201X, Sky Inc. reported the following.

Net income	$65,000
Preferred dividends declared,	$20,000
Common dividend declared,	$3,000
Unrealized holding loss, net of tax; Available-For-Sale-Securities	$2,000
Retained earnings	$80,000
Common stock,	$40,000
Accumulated Other Comprehensive Income, Beginning Balance	5,000

What would Sky report as its ending balance of accumulated other comprehensive income?

(TCO B) Retained earnings at 1/1/1X was $90,000 and at 12/31/1X it was $210,000. During 201X, cash dividends of $50,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

(TCO B) Unearned rent at 1/1/1X was $6,000 and at 12/31/1X was $15,000. The records indicate cash receipts from rental sources during 201X amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

(TCO B) Unearned rent at 1/1/1X was $7,300 and at 12/31/1X was $8,100. The records indicate cash receipts from rental sources during 201X amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

(TCO B) Unearned rent at 1/1/10 was $5,500 and at 12/31/10 was $10,000. The records indicate cash receipts from rental sources during 2010 amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit ) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

1. Financial information demonstrates consistency when /// A firms in the same industry use different accounting methods to account for the same type of transaction. B a company uses the same method for depreciation from year to year on its financial statements. C a company fails to adjust its financial statements for changes in the value of the measuring unit. D all of the above 2. The cash method of accounting ? /// is used by most publicly traded corporations for financial statement purposes. is not in accordance with the matching principle for most publicly traded corporations. often is used on the income statement by large, publicly held companies. All of the above 3 Which of the following is an ingredient of faithful representation? /// A. Materiality. B. Predictive value. C. Confirmatory value. D. Neutrality. 4 The two fundamental qualities that make accounting information useful for decision making are /// A. comparability and timeliness. B. faithful representation and comparability. C. relevance and faithful representation. D. materiality and neutrality. 5 Which of the following elements of financial statements is not a component of comprehensive income? A. Distributions to owners B. Expenses C. Revenues D. Losses 6 Which basic element of financial statements arises from peripheral or incidental transactions? A. Liabilities. B. Assets. C. Gains. D. Expenses. 7 Which basic assumption may not be followed when a firm in bankruptcy reports financial results? A. Monetary unit assumption. B. Economic entity assumption. C. Going concern assumption. D. Periodicity assumption. 8 Balance sheet information is useful for all of the following except to /// compute rates of return. analyze cash inflows and outflows for the period. evaluate capital structure. assess future cash flows. 9 The balance sheet contributes to financial reporting by providing a basis for all of the following except // computing rates of return. evaluating the capital structure of the enterprise. determining the increase in cash due to operations. assessing the liquidity and financial flexibility of the enterprise. 10 Accounting information is considered to be relevant when it a. can be depended on to represent the economic conditions and events that it is intended to represent. b. is capable of making a difference in a decision. c. is understandable by reasonably informed users of accounting information. d. is verifiable and neutral. 10 Which of the following would be classified in a different major section of a balance sheet from the others? /// a. Capital stock b. Common stock subscribed c. Stock dividend distributable d. Stock investment in affiliate 11 Which item below is not a current liability? /// a. b. c. d. Unearned revenue Stock dividends distributable The currently maturing portion of long-term debt Trade accounts payable 12 Financial information exhibits the characteristics of consistency when /// a. expenses are reported as charges against revenue in the period in which they are paid. b. accounting entities give accountable events the same accounting treatment from period to period. c. extraordinary gains and losses are not included on the income statement. d. accounting procedures are adopted which give a consistent rate of net income. 13 The current assets section of the balance sheet should include /// accounts receivables. long-term debt. retained earnings. patents. 14 Ahnen Company owns the following investments. /// Trading securities (fair value) $70,000 Available-for-sale securities (fair value) 40,000 Held-to-maturity securities (amortized cost) 47,000 What will Ahnen report investments in its current assets section? $0 Exactly $70,000 $70,000 or an amount greater than $70,000, depending upon the circumstances Exactly $110,000 (TCO A) Why are some of the major differences between iGAAP and U.S. GAAP? Explain in detail?? (TCO C) Blue Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 201X, included the following expense accounts. Accounting and legal fees $150,000 Advertising $125,000 Freight-out $65,000 Interest $80,000 Loss on sale of long-term investments $35,000 Officers' salaries $200,000 Rent for office space $160,000 Sales salaries and commissions $110,000 One half of the rented premises are occupied by the sales department. How much of the expenses listed above should be included in Perry's general and administrative expenses for 201X? 3 (TCO C) For the year ended December 31, 201X, King Inc. reported the following. Net income $60,000 Preferred dividends declared $10,000 Common dividend declared $2,000 Unrealized holding loss, net of tax $1,000 Retained earnings, beginning balance $80,000 Common stock sold during the year Retained earnings, beginning balance $80,000 Common stock $40,000 Accumulated Other Comprehensive Income, Beginning Balance $5,000 What would Transformers report as the ending balance of retained earnings? (TCO C) For the year ended December 31, 201X, Sky Inc. reported the following. Net income $65,000 Preferred dividends declared, $20,000 Common dividend declared, $3,000 Unrealized holding loss, net of tax; - Available-For- $2,000 Sale-Securities Retained earnings $80,000 Common stock, $40,000 Accumulated Other Comprehensive Income, Beginning Balance 5,000 What would Sky report as its ending balance of accumulated other comprehensive income? (TCO B) Retained earnings at 1/1/1X was $90,000 and at 12/31/1X it was $210,000. During 201X, cash dividends of $50,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment. (TCO B) Unearned rent at 1/1/1X was $6,000 and at 12/31/1X was $15,000. The records indicate cash receipts from rental sources during 201X amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment. (TCO B) Unearned rent at 1/1/1X was $7,300 and at 12/31/1X was $8,100. The records indicate cash receipts from rental sources during 201X amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment. (TCO B) Unearned rent at 1/1/10 was $5,500 and at 12/31/10 was $10,000. The records indicate cash receipts from rental sources during 2010 amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit ) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment