Need help with verifying the answers I have answered and the ones I have not. Also help with part II.

1. When canceling debt before its maturity, debt retirement, it is theorized that the recall of the debt is a current decision. For that reason any gains or losses arising from the debt retirement should be A. reported in the current period income statement as an extraordinary item B. reported in the current period income statement as an extraordinary item, net of tax C. reported in the current period statement of retained earnings as a prior period adjustment D. reported in the current period income statement but not as an extraordinary item 2. For disclosing the periodic income tax expense on the income statement, one method advocated by proponents of the net-of-tax method theorize that this method should report A. income tax expense equal to current income tax payable B. only deferred tax assets but not deferred tax liabilities C. only deferred tax liabilities but not deferred tax assets D. net operating loss tax carry-forwards but not net operating loss tax carry-backs 3. The amount of a company's long-term debt to equity can be measured by a ratio. This ratio also directly relates to A. management's performance based on the return of assets B. the classification of common and preferred stock C. the decision on whether or not to issue a stock-split D. the risk associated with investing in the firm's stock 4. Asset retirement obligations (AROs) should initially be measured at A. the future value of the liability to dispose of the asset B. the present value of the liability to dispose of the asset C. the expected revenue to be generated from the sale of the disposal D. should not be measured until the asset is to be disposed of 5. One of the primary reasons that the Federal Government passed the ERISA Act of 1974 (Pension Reform Act of 1974) is that the Federal Government was concerned about A. the accounting for the pension expense B. the accounting for the pension asset/liability C. the funding policies of pension plans D. the sudden rise in the popularity of defined contribution plans 6. If the benefits and risks of ownership have been transferred in a lease agreement, a capital lease should be recognized. Besides this, another conceptual consideration for recording capital leases for the lessee and sales or direct-financing leases for the lessor is A. consistency in accounting between the lessee and lessor B. the use of the same discount rate for present value computations by both the lessee and lessor C. the same asset cost-basis for both the lessee and lessor D. the recognition of the same amount of interest revenue (lessor) and interest expense (lessee) 1 7. Assume that you are concerned with the account balances reported on an entity's balance sheet, more so than the amounts reported in the income statement. When it comes time to estimating bad debts, theoretically the better approach to meet your needs as a user of the financial statements would be to have the entity estimate bad debts based on A. the total sales both cash and credit B. the total credit sales C. the outstanding accounts receivable balance D. the direct write-off method 8. The capitalization of interest costs applies to A. assets (property, plant, equipment) while under construction B. interest costs for inventory that is financed C. bonds payable D. leased assets 9. Events and circumstances have occurred that indicate 100% of the carrying (book) value of a tangible asset is determined to be unrecoverable (the recoverability test has \"failed\"). The impairment loss would be measured as the difference between A. the historical cost and the fair value B. the historical cost and the carrying (book) value C. the carrying (book) value and the fair value D. the present value of the net future cash flows and the fair value 10. When measuring recording interest expense for bonds payable, A. the yield rate should be reflected over the life of the bond issue, thus the straight-line interest method should be used B. the yield rate should be reflected over the life of the bond issue, thus the effective interest method should be used C. the interest expense should be based on the face value of the bonds if the bonds are issued at a discount or premium D. the amount of interest expense will differ each period of the bonds are issued at par 11. The theoretical basis for requiring companies to use fair value accounting to account for investments in equity securities derives primarily from a qualitative characteristic of reporting financial information from SFAC 8 (previously SFAC 2). The characteristic which best applies to this requirement is A. faithful representation (reliability in SFAC 2) B. timeliness C. consistency D. relevance 2 12. Accounting for convertible debt is both a theoretical and practical problem in accounting. Is it a debt instrument, an equity instrument, or both? Under accounting standard APB Opinion 14 the amount of the conversion feature of convertible debt should be shown as A. a liability B. equity C. a special item between liabilities and equity D. separate components shown as both equity and liabilities 13. The joint project on accounting for leases by the FASB and IASB came about because users of financial information believe that A. leases are being classified as capital leases which they believe should be classified as operating leases B. leases are being classified as operating leases which they believe should be classified as capital leases C. leases are becoming a more predominant method of financing asset acquisitions used in business operations D. off-balance sheet financing has become less of an issue since the initial lease standard (SFAS 13) 14. The primary reason that the FASB does not allow for the capitalization of most research and development costs is because A. of the uncertainty of future benefits B. of the difficulty of measuring the initial research and development costs C. of the difficulty of determining the amortization period for research and development costs D. of the difficulty segregating research costs from development costs 15. In 1936 the AICPA recognized the difference in importance between items reported in the balance sheet as current assets and liabilities, and long-term assets and liabilities, for the different users of financial information. They acknowledge that the liquidity of a business was as important, if not more important, than long-term assets and liabilities from the point of view of the A. debtor B. common stock shareholder C. creditor D. preferred stock shareholder 16. In Accounting Research Bulletin (ARB) 43 intangible assets were originally classified as \"Type a\" or \"Type b\" intangibles. Since that time changes have been made to the classification of intangible assets. SFAS 142 issued in 2001 changed the classification of intangibles to which of the following two groups? A. identifiable and unidentifiable B. externally acquired and internally developed C. amortizable and unamortizable D. indefinite life and finite (definitive) life 3 17. Capitalization of certain costs subsequent to the acquisition of an asset, which are related to the asset, is typically done A. because of the materiality of the amount involved B. because it increases the salvage value of the asset C. because of the uncertainty of future economic benefit D. because the costs has future service potential for the asset 18. When accounting for income taxes, advocates of partial allocation argue that A. permanent differences should be considered when calculating income tax expense B. the valuation account for deferred tax assets is unnecessary C. the amounts of deferred tax liabilities will not reverse as new future transactions will generate continuous deferred tax liabilities D. individual temporary differences should be reported same period as the related transactions 19. Though not specifically stated, both APB Statement No. 4 and SFAC No. 6 have defined assets, liabilities, and equities in a manner consistent with proprietary theory. Proprietary theory depicts the accounting equation as A. assets - liabilities = equity B. assets = liabilities + equity C. assets = equities D. assets - equities = liabilities 20. The accounting for uncertain tax positions has been addressed by FIN 48, \"Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109.\" Under FIN 48 the evaluation of a tax position is a two-step process. These steps are A. measurement and evaluation B. recognition and measurement C. recognition and assessment D. evaluation and assessment 21. Under troubled debt restructuring, when a creditor's restructured measurement of a loan is less than the current carrying value of the loan (prior to restructuring) they will record a(n) A. extraordinary loss, net of tax B. bad debt loss C. contra-account to the loan as a valuation account D. loan receivable for the difference between the carrying value of the loan (prior to restructuring) and restructured measurement of the loan 22. Unrealized holding gains and losses from equity securities classified as available-for-sale A. are reported as extraordinary items, net of tax B. are reported as other gains or losses C. are reported not reported on the income statement D. are reported as other comprehensive income 23. The measurement and reporting of stock options as an expense was one of the most politically debated topics since the inception of the CAP, APB, and FASB. The end result is that 4 A. there is no recognition of an expense until the stock options are exercised B. there is only recognition of expense for stock options that have not been exercised and expired C. there is recognition of expense only for stock options exercised in the same year they are granted D. there is recognition of expense for stock options in the year they are granted 24. Among the competing theories related to the recording and reporting of accounting theory, the theory which views management and control as important components of the firm is the A. commander theory B. fund theory C. enterprise theory D. residual equity theory 25. One of the criticisms of the lower of cost or market rule for inventories is that it does not consider holding gains, only holding losses. A viewpoint to counter this criticism is A. materiality B. cost/benefit C. conservatism D. fair value 5 Point BONUS Question LeBron \"The King of Cleveland\" James currently (2015 - 2016) plays basketball for the A. *****CLEVELAND CAVALIERS, SOON-TO-BE 2015-2016 NBA CHAMPIONS***** B. miami heat (Sorry but my season tickets became worthless when he left - still angry about that!) Problem II - 25 Points Below are 5 questions. Choose any 1 of the following 5 questions and answer it on the following page(s). If you choose more than one question, I will only grade the first question. 5 You will notice that there is no absolute answer, therefore it is important that you write concisely, defending (supporting) your answer. At the top of each page be sure to write the question number that you are answering. Do not write more than two pages for the question that you answer. If you feel like you answered the question in less than two pages that is acceptable - you are not required to write two pages - that is your decision. If you don't use a second page to answer a question (or both questions) submit only the page you used to answer the question - do not submit the second page if it is blank. If you use outside materials or quotes be sure to show them as a reference on page 10. You will be graded on (1) how you answer the question and (2) your writing style. Be sure to read the syllabus regarding writing style and format. For this question please use 1.15 spacing between lines. Questions (Choose any 1 of the following 5) 1. The accounting for assets, both current and long-term, has changed significantly since the inception of the FASB. Discuss some of the primary changes in the accounting (measurement and reporting) for assets that the FASB has implemented. 2. The accounting for liabilities, both current and long-term, and equity has changed significantly since the inception of the FASB. Discuss some of the primary changes in the accounting (measurement and reporting) for liabilities and equity that the FASB has implemented. 3. Discuss the current state of accounting for leases, the strengths and weaknesses, and where improvement can be made. Be sure to discuss the off-balance sheet financing nature of operating leases. If you choose this question you may want to go to the FASB ASC website and look at \"Proposed Accounting Standards Updates,\" \"2013,\" \"Leases Topic 842.\" The information for accessing the ASC is given in the syllabus. 4. Discuss the theories of equity, specifically the proprietary, entity and residual equity theories. Be sure to include in your discussion which theory you believe best meets the theory of equity, that is best defines what equity is or should be. 5. The text authors point out that \"accounting for income taxes has been a controversial financial accounting topic for many years.\" Discuss the (1) controversies, (2) the resolutions, and (3) any unresolved or questionable areas related to the accounting for income taxes. For this question you may want to access the FASB ASC (information to access the FASB ASC is given in the syllabus) and look at \"Proposed Accounting Standards Updates,\" \"2015,\" \"Income Taxes Topic 740,\" Part II,\" \"Balance Sheet Classification of Deferred Taxes.\" QUESTION ______ (page 1) 6 QUESTION ______ (page 2 if needed) 7 DO NOT WRITE BELOW THIS LINE FOR YOUR QUESTION REFERENCES (if needed) 8