Please answer the following questions:

QUESTION 1

Which of the following is true?

1. The Financial Accounting Standards Board has never permitted the disclosure of the fair values of noncurrent operating assets in the notes to financial statements

2. The SEC currently requires the disclosure of the fair values of noncurrent operating assets

3. The Financial Accounting Standards Board currently requires the disclosure of the fair values of noncurrent operating assets in the notes to the financial statements

4. Disclosure of the fair values of noncurrent operating assets in the notes to the financial statements is currently encouraged but not required by the Financial Accounting Standards Board

QUESTION 2

When the estimate of an asset's useful life is changed.

a.	depreciation expense for all past periods must be recalculated
b.	there is no change in the amount of depreciation expense recorded for future years
c.	only the depreciation expense in the remaining years is changed
d.	None of the above are true

QUESTION 3

Callable bonds

a.	can be redeemed by the issuer at some time at a pre-specified price
b.	can be converted to stock
c.	mature in series of payments
d.	None of the above

QUESTION 4

How should the balances of Progress Billings and Construction in Progress be shown at reporting dates prior to the completion of a long-term contract?

a.	Progress Billings as income, Construction in Progress as inventory
b.	Net, as income from construction if credit balance, adn loss from construction if debit balance
c.	Progress Billings as deferred income, Construction in Progress as a current asset
d.	Net, as a current asset if debit balance and current liability if credit balance

QUESTION 5

If the cash balance shown in a company's accounting records is less than the correct cash balance, and neither the company nor the bank has many any errors, there must be

a.	deposits credicted by the bank but not yet recorded by the company
b.	deposits in transit
c.	outstanding checks
d.	bank charges not yet recorded by the company

QUESTION 6

Carter Company acquired three machines for $200,000 in a package deal. The three assets together had a book value of $160,000 on the seller's books. An appraisal costing the purchaser $2,000 indicated that the three machines had the following market values (book values are given in parentheses):

Machine 1: $60,000 ($40,000)

Machine 2: $80,000 ($50,000)

Machine 3: $100,000 ($70,000)

The three assets should be individually recorded at a cost of (rounded to the nearest dollar)

1. Machine 1 Machine 2 Machine 3

$40,000 $53,333 $66,667

2. Machine 1 Machine 2 Machine 3

$50,000 $62,500 $87,500

3. Machine 1 Machine 2 Machine 3

$40,000 $50,000 $70,000

4. Machine 1 Machine 2 Machine 3

$50,500 $67,333 $84,167

QUESTION 7

An adjusting entry in which revenue is recognized and a receivable is established indicates that revenue has been

Earned Collected

a.	Yes No
b.	Yes Yes
c.	No Yes
d.	No No

QUESTION 8

Franchise fees are properly recognized as revenue

a.	when received in cash
b.	when a contractual agreement has been signed
c.	after the franchise business has begun operations
d.	after the franchiser has substantially performed its service

QUESTION 9

Goodwill should be recorded in the accounting records only when

a.	it is purchased from another company
b.	it can be established that a definite benefit or advantage has resulted to a firm from some item such as a good name, capable staff, or reputation
c.	it is acquired through the purchase of another business entity
d.	a firm reports above normal earnings for five or more consecutive years

QUESTION 10

A method of estimating bad debts that focuses on the balance sheet rather than the income statement is the allowance method based on

a.	direct write-off
b.	aging the trade receivable accounts
c.	credit sales
d.	specific accounts determined to be uncollectible