Flamingo Enterprises has a patent that Flamingo would like to expense over the patent's useful life. Which of the following accounts would Flamingo credit to record this expense over the patent's life? (Points : 2) Accumulated depreciation. Accumulated depletion. Accumulated amortization or the patent. Amortization expense.

Question 2.2. Which of the following statements regarding making changes in accounting principles is least accurate? (Points : 2) Changes in accounting estimates are now treated the same as changes in accounting principles. The general rule is retrospective application. A change in accounting principle is a change from one generally accepted accounting principle to another generally accepted principle. The firm making the change must justify the change. The reported prior year statements should be restated to reflect the new accounting principle.

Question 3.3. Company P has owned 80 percent of Company S for a number of years. This year Company P bought inventory for $100,000 and sold it to Company S for $150,000. At the end of the year, Company S still holds inventory with a transfer price of $30,000. Company P reported sales for the year of $700,000 and Company S reported sales of $500,000. Assume that each company separately reports cost of goods sold of $400,000 each. What is consolidated cost of goods sold? (Points : 2) $660,000 $710,000 $700,000 $800,000

Question 4.4. Interest cost included in the net pension cost recognized by an employer sponsoring a defined benefit pension plan represents the (Points : 2) Shortage between the expected and actual returns on plan assets. Amortization of the discount on unrecognized prior service costs. Increase in the fair value of plan assets due to the passage of time. Increase in the projected benefit obligation due to the passage of time.

Question 5.5. FASB ASC 958 Not-for-Profit Entities, requires which of the following financial statements for private not-for-profit organizations? (Points : 2) Statement of financial position, statement of activities, and a statement of cash flows. Balance sheet and income statement. Statement of cash flows, statement of revenues expenses and changes in net assets, and a statement of financial position. Balance sheet income statement for each fund.

Question 6.6. For a marketable securities portfolio classified as held-to-maturity, which of the following amounts should be included in the periods net income? 1. Unrealized temporary losses during the period. 2. Realized gains during the period. 3. Changes in the valuation allowance during the period. (Points : 2) 3 only. 1 and 2. 2 only. 1, 2, and 3.

Question 7.7. A firm has a weighted average number of 20,000 common shares selling at an average of $10 throughout the year and 11,000, 10 percent cumulative, $100 par value preferred shares. If the firm earns $210,000 after taxes, what is its Basic EPS? (Points : 2) $7.50 / share. $5.00 / share. $10.00 / share. $10.50 / share.

Question 8.8. A US company with the US dollar as its functional currency is preparing to report consolidated financial statements for Year One. At the end of that year, because of a foreign subsidiary, the company has a translation adjustment account with an $18,000 credit balance. In addition, the US company had a receivable for 100,000 lira from a customer in Italy. This receivable was worth $11,000 when it was established on November 9. However, the currency exchange rates changed, and it was worth $14,000 when paid by the customer on January 30 of Year Two. The 100,000 lira receivable was worth $13,000 on December 31, Year One. What gain appears in this company's consolidated income statement for Year One? (Points : 2) $18,000 $21,000 $-0- $2,000

Question 9.9. An inventory loss from a market price decline occurred in the first quarter, and the decline was not expected to reverse during the fiscal year. However, in the third quarter the inventory's market price recovery exceeded the market decline that occurred in the first quarter. For interim financial reporting, the dollar amount of net inventory should (Points : 2) Decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the decrease in the first quarter. Not be affected in either the first quarter or the third quarter. The correct answer was A. The inventory decline in the first quarter should be recognized in that quarter because at that point it was the company's judgment that the decline was not expected to reverse during the fiscal year. However, the decline was recovered in the third quarter. In that case the recovery recognized is limited to the amount of the decrease in the first quarter. To do otherwise would violate the cost principle for inventory. Decrease in the first quarter by the amount of the market price decline and not be affected in the third quarter. Decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the market price recovery.

Question 10.10. Oregon Corp.s stock transactions during the year were as follows: January 1: 320,000 shares issued and outstanding. April 1: 1 for 2 reverse stock split occurred. July 1: Acquisition of Smith, Inc. in exchange for issuance of 60,000 shares in an acquisition method transaction. October 1: 30,000 shares issued for cash. What is Oregons weighted average number of shares outstanding? (Points : 2) 277,500. 167,500. 197,500. 250,000. Question 11.11. The balance in Kemp Corp.'s accounts payable account at December 31, Year One, was $900,000 before any necessary year-end adjustment relating to the following: Goods were in transit to Kemp from a vendor on December 31, Year One. The invoice cost was $50,000. The goods were shipped F.O.B. shipping point on December 29, Year One, and were received on January 4, Year Two. Goods shipped F.O.B. destination on December 21, Year One, from a vendor to Kemp were received on January 6, Year Two. The invoice cost was $25,000. On December 27, Year One, Kemp wrote and recorded checks to creditors totaling $40,000 that were mailed on January 10, Year Two. In Kemp's December 31, Year One, balance sheet, the accounts payable should be: (Points : 2) $940,000. $950,000. $975,000. $990,000.

Question 12.12. If it is not practicable for an entity to estimate the fair value of a financial instrument, which of the following should be disclosed? I. Information pertinent to estimating the fair value of the financial instrument. II. The reasons it is not practicable to estimate fair value. (Points : 2) I only. Both I and II. Neither I nor II. II only. Question 13.13. Which of the following is true about the reporting that is used for governmental funds in fund-based financial statements? (Points : 2) Current financial resources are being measured and modified accrual accounting is used for timing purposes. Economic resources are being measured and accrual accounting is used for timing purposes. Current financial resources are being measured and accrual accounting is used for timing purposes. Economic resources are being measured and modified accrual accounting is used for timing purposes. Question 14.14. On December 31, Year One, Ames leases equipment under a capital lease for 10 years with annual payments of $50,000 beginning immediately. The present value of an annuity due for 10 years at a reasonable interest rate of 12 percent is $350,000. The straight-line method of depreciation is to be used for the equipment but the effective rate method is applied for interest recognition. The asset must be returned to the owner after 10 years. Currently, the December 31, Year Two balance sheet is being prepared. By how much has the net liability been reduced from that amount which appeared on the December 31, Year One balance sheet? (Points : 2) $42,000 $8,000 $36,000 $14,000 Question 15.15. A city government has a nine year capital lease for property being used within the general fund. The lease was signed on January 1, Year 4, minimum lease payments total $90,000 but have a current present value of $69,000. Annual payments are $10,000, the effective interest rate is 10% and the first payment is made on December 31, Year 4. When the lease is recorded on January 1, Year 4, which accounts are credited? Fund-Based Statements Government-Wide Statements (Points : 2) Other Fin. Sources $69,000 Capital Lease Obligation $69,000 No Entry Capital Lease Liability $10,000 Other Financing Uses $10,000 Capital Lease Liability $10,000 Lease Payable $69,000 Other Financing Sources $69,000 Question 16.16. During Year 1, Beam Co. paid $1,000 cash and traded inventory, which had a carrying amount of $20,000 and a fair value of $21,000, for other inventory in the same line of business with a fair value of $22,000. What amount of gain (loss) should Beam record related to the inventory exchange? (Points : 2) $2,000. $0. $1,000. ($1,000). Question 17.17. What type of bond matures at different points in time? (Points : 2) Bearer bonds. Term bonds. Serial bonds. Unsecured bonds. Question 18.18. If Jackson Ski Company issues common stock, and uses the proceeds to purchase fixed assets such as equipment: (Points : 2) cash flow from financing would increase and cash flow from investing would decrease. both cash flow from operations and cash flow from financing would increase. The correct answer was A. Cash flow from financing increases when stock is issued, while cash flow from investing decreases when spending for purchases of fixed assets. both cash flow from operations and cash flow from financing would decrease. cash flow from financing would decrease and cash flow from investing would increase. Question 19.19. Posy Corp. acquired treasury shares at an amount greater than their par value, but less than their original issue price. Compared to the cost method of accounting for treasury stock, does the par value method report a greater amount for additional paid-in capital and a greater amount for retained earnings? Additional paid-in capital Retained earnings (Points : 2) Yes No Yes Yes No No No Yes Question 20.20. An analyst has gathered the following information about a company: 110,000 shares of common outstanding at the beginning of the year. The company repurchases 20,000 of its own common shares on July 1. Earnings are $300,000 for the year. 10,000 shares of existing 10 percent cumulative $100 par preferred outstanding that is not in arrears at the beginning or ending of the year. The company also has $1 million in 10 percent callable bonds outstanding. The company has declared a $0.50 dividend on the common. What is the company's diluted earnings per share? (Points : 2) $2.00. $2.73. $1.40. Not relevant.