Q10. On the balance sheet, Land currently used in the business is normally measured at*

a. Historical acquisition cost

b. Current market value

c. Current market value less anticipated selling expenses

d. Present value of future cash flows undiscounted at the company's cost of capital

e. None of the above is correct

Q11. An important idea that dictates the structure of a firm's balance sheet is that:*

a. The balance sheet shows on one side the resources a firm has (i.e., liabilities and equity) and on the other side all sources (assets) of these resources

b. Total assets equal total liabilities

c. The market value of the firm is its total assets

d. The fair value of assets depends on the accrual system of accounting

e. None of the above is correct

Q12. You have been asked to analyze the financial statements of the Apple Corporation with regards to its profitability. Which of the following would you find most useful?*

a. Income Statement

b. Statement of Cash Flows

c. Financial statements of Apple's subsidiaries

d. The notes to the financial statements

e. None of the above is correct

Q13. Using FIFO, the inventory cost as of 12.31.2008 is $50,000. As of the same day, the market value of the inventory is $40,000. The market value as of 3.1.2009 is $35,000. Under LIFO the inventory cost as of 12.31.2008 is $45,000. Assume the company uses FIFO to measure its inventories. Following US GAAP, i.e., using the historical cost principle to measure inventories, the inventory figure on the balance sheet as of 12.31.2008 should be recognized in the amount of*

a. $35,000

b. $45,000

c. $50,000

d. There is not enough information to solve this question

e. None of the above