PARTI Objective Section (2 points each) TRUE/FALSE-A-True; B= False (on scantron or answer sheet) T F 1. Currently there is total agreement between US GAAP Accounting Standards and IFRS Accounting Standard as of 2017 T F 2. Only cash, available for sale securities and receivables are the assets included in computing the Current Ratio. TF 3. The general purpose financ ial reports are the income statement, the balance sheet and the statement of cash flows T F 4, A bond issued at 95% (a discount) of face value will result in the bond interest market or effective rate being less than the contract or coupon rate. T F 5. A piece of land acquired in exchanged for a 3-year, non-interest bearing note would be T F 6. Ifa firm applies the Completed Contract Method for a 3-year long-term contract, then the firm T F 7. Computing the net realizable value requires that NPV be determined by Sales T F 8. Intra-tax Allocation is demonstrated by off-setting Discontinued Operations by Taxes as well as recorded at the faced value of the note. will not show any gross profit until the end of the 3nd year. minus cost or expense of selling. off-setting taxes for Income from Continuing Operations. Multiple Choices Complete as directed, Complete on Scantron 9. The US GAAP conceptual framework description for revenue recognition originally did not include a. b. c. d. a new feature which is: the customer or the buyer must have control of the goods or have access to the service income is realized at the exchange of goods (transfer of title) revenue is recognized when selling is activated or when service is performed neither is correct 10. The US GAAP Measurement process does not include: a. historical cost b. current cost c. current market value d. net realizable value e. appraisal value of the Income Statement for Power Inc. shows the following based on 200,000 common shares and a 30% incom e tax rate: Income from continuing operations after i Gain on Sale of Discontinued Fertilizer Division after taxes Losses on Operations of Discontinued Fertilizer Division after ncome taxes $3,700,000 180,000 Taxes (300,000) Earnings per share: Net Income 17.90 Additional information: you have discovered that an inexperience accountant this report and has the following mistakes: prepared a. including an unrealized loss on available for sale securities of $78,500 in income from continuing operations including interest Expense of $93,520 in the losses on operations of the discontinued fertilizer division b. Complete Items 46, 47, 48, 49 and 50 below from the Power Inc. Report above: 46. The Unrealized Loss on Available for Sale Securities is reclassified as: a. Other Expenses b. Discontinued Operations c. Other Comprehensive Income d. Prior-Period Adjustment e. Neither is correct. 47. Income from Continuing Operations after taxes now must be listed as: a. $3,621,500 b. $3,527,980 c. $3,778,500 d. $3,684,980 e. $3,556,036 48. Discontinued operations must now be reported as net Income or (loss) of a. $180,000 b. ($120,000) c. ($198,500) d. ($206,480)
