Land was acquired in 2016 for a future building site at a cost of $41,000. The assessed valuation for tax purposes is $28,100, a qualified appraiser placed its value at $48,300, and a recent firm offer for the land was for a cash payment of $44,900. The land should be reported in the financial statements at:

$ 48,300.

$ 28,100.

$ 44,900.

$ 41,000.

2)

Alpaca Corporation had revenues of $260,000 in its first year of operations. The company has not collected on $19,000 of its sales and still owes $25,500 on $100,000 of merchandise it purchased. The company had no inventory on hand at the end of the year. The company paid $15,000 in salaries. Owners invested $14,000 in the business and $14,000 was borrowed on a five-year note. The company paid $4,900 in interest that was the amount owed for the year, and paid $5,100 for a two-year insurance policy on the first day of business. Alpaca has an effective income tax rate of 30%. Compute net income for the first year for Alpaca Corporation.

$ 137,550

$ 94,500

$ 96,285

$ 160,000

3)

Tri Fecta, a partnership, had revenues of $379,000 in its first year of operations. The partnership has not collected on $46,300 of its sales and still owes $39,700 on $180,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $33,200 in salaries. The partners invested $41,000 in the business and $27,000 was borrowed on a five-year note. The partnership paid $2,160 in interest that was the amount owed for the year and paid $9,500 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.

$ 215,540

$ 286,910

$ 226,890

$ 222,140

4)

The following information ($ in millions) comes from a recent annual report of Amazon.com, Inc.:

Net sales	$10,823
Total assets	4,501
End of year balance in cash	1,049
Total stockholders' equity	471
Gross profit (Sales - Cost of Sales).	2,501
Net increase in cash for the year	25
Operating expenses	2,050
Net operating cash flow	634
Other income (expense), net	(27)

Compute Amazon's total liabilities at the end of the year.

$ 4,501

$ 4,030

$ 4,551

$ 2,154

5)

Which of the following groups is not among financial intermediaries?

Mutual fund managers.

Financial analysts.

CPAs.

Credit rating organizations.

6)

The most political issue in the FASB's most recent deliberations and amendments to GAAP on business combinations was:

The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the purchase method of accounting for the combination.

The negative effects on subsequent earnings of amortizing goodwill if firms were required to use the pooling method of accounting for the combination.

The unrealistic balance sheet assets that would be created if firms were required to use the purchase method of accounting for the combination.

The unrealistic balance sheet assets that would be created if firms were required to use the pooling method of accounting for the combination.

7)

The possibility that the capital markets' focus on periodic profits may tempt a company's management to bend or even break accounting rules to inflate reported net income is an example of:

An ethical dilemma.

An accounting theory issue.

A technical accounting issue.

An auditor's responsibility to inform the SEC.

8)

A constraint on qualitative characteristics of accounting information is:

Timeliness.

Going concern.

Neutrality.

Cost-effectiveness.

9)

Which of the following Statements of Financial Accounting Concepts defines the 10 elements of financial statements?

SFAC 4.

SFAC 3.

SFAC 5.

SFAC 6.

10)

The full disclosure principle requires a balance between:

Comparability and consistency.

Relevance and cost-effectiveness.

Reliability and neutrality.

Timeliness and predictive value.

11)

Somerset Leasing received $33,600 for 24 months' rent in advance. How should Somerset record this transaction?

Prepaid rent	33,600
Rent expense		33,600

Cash	33,600
Deferred revenue		33,600

Interest expense	33,600
Interest payable		33,600

Salaries expense	33,600
Salaries payable		33,600