Question 1

Assets are reported on the balance sheet

Those who are more liquid first

Net of depreciation expense

Net in relation to long-term liabilities or realizable value

About a period that does not represent only an exact point in time

5 points

Question 2

In which of the following situations an income must be recognized

When cash is received from the customer for the purchase orders that will be sent the following month.

When the merchandise is shipped to a consignment store.

When the merchandise is shipped to the CEO's brother-in-law who is currently under bankruptcy protection.

When the tax preparation services are delivered to the client and the payment must be made in a period not exceeding 2 days.

5 points

Question 3

The gross profit method and the retail inventory method

Both are estimates of the ending inventory and the cost of products sold.

They both use the lowest cost or fair market value of inventory in their calculations.

They both use the present value of future cash flows.

They have nothing in common, since one is to determine profit and the other is to determine the retail price (retail)

5 points

Question 4

Which of the following is not one of the steps within the ethical decision analysis model:

Identify values related to the situation

Identify the consequences of each possible course of action

Determine the facts within the situation.

Consult with the AICPA ethics review board

5 points

Question 5

When presenting a Balance Sheet using GAAP:

Capital is presented before liabilities

Investments are presented after liabilities

Non-current accounts are presented after current accounts

The accounting equation is used to show how assets are used and to recognize income

5 points

Question 6

Your supervisor asks you to determine if the support schedule and journal entry created by a new employee are correct. Where would you look to make sure GAAP was met?

AICPA rules and pronouncements

FASB coding system

IFRS Pronouncements

IIA standards for financial reporting

5 points

Question 7

The organization that prescribes the Code of Professional Conduct is

AICPA

FASB

IMA

IIA

5 points

Question 8

A transaction between relatives

The purchase of new equipment with a value greater than $ 100,000 corresponds to a previous period

The purchase of new equipment with a value greater than 10% of net assets

Requires publication if both parties to the transaction agree to present the information

It would need to be published including the nature of the transaction, its type and its value in dollars

5 points

Question 9

The main objective of making financial reports is

Provide information to investors about the profits of a business

Determine if loans or other credit obligations can be paid on time

Keep personal records separate from business records

Provide relevant and reliable information for external users

5 points

Question 10

When inventory methods from another costing system are changed to LIFO (UEPS):

The general rule applies: The change is reported retroactively in all financial statements and with disclosure in the notes. Only in exceptional cases is it allowed to move away from the general rule.

The change is reported retroactively in all financial statements but no explanatory notes are required.

The LIFO method is only used from then on and no explanatory notes are needed

The LIFO method is only used from then on and explanatory notes are required

5 points

Question 11

The proper presentation of the financial statements will require detailed presentation notes on

Hiring policies if the amount of wages is greater than $ 100,000

Significant accounting principles

The purchase of documents of value from another corporation under the LIFO system

The purchase of new equipment with a value greater than $ 100,000

5 points

Question 12

Calculating a simple interest for a $ 100,000 investment at 6% interest for 5 years would be

Less than compound interest

More than compound interest

The same amount under simple and compound interest rates, since the amount is less than $ 125,000

The same amount under simple and compound interest rates, since the amount is less than $ 155,000

Question 13

ACE Company decided to change the depreciation method from the Straight Line to the Double Decreasing Depreciation. Change is reported

Prospectively in all financial statements and explanatory notes are necessary to justify the change

Prospectively in all financial statements and explanatory notes are not necessary to justify the change

Retrospectively in all financial statements and explanatory notes are necessary to justify the change

Retrospectively in all financial statements and explanatory notes are not necessary to justify the change

5 points

Question 14

The Establishment of Uniform Accounting Standards in the United States arose in response to the need to:

Restoring trust within the market which was lost due to false and incomplete information

Have all the companies that trade in the stock market

Ensuring that all countries in the world use the same accounting standards

Change from ABP standards to FASB standards

5 points

Question 15

When preparing the current assets section of the balance sheet under GAAP you see that two of the bank account balances are negative. Where would you look to determine how these balances should be reported?

American Banking Association rules and procedures

FASB Coding System

IFRS pronouncements since negative balance sheets are currently passive

N None of the above since the balances must be grouped in the balance sheet

5 points

Question 16

Calculate the cost of the equipment that would be reported in the balance sheet based on the following information:

Equipment Cost $ 100,000

Equipment Shipping Cost $ 5,000

Electrical cost of installing the equipment $ 2,000

Increase in the market value of the equipment from the day of its purchase $ 3,000

$ 100,000

$ 105,000

$ 107,000

$ 110,000

5 points

Question 17

The SEC (Securities and Exchange Commission) has the authority to set standards for

All companies listed on the stock market since 1929

All companies since the Sarbanes-Oxley Act was created

Businesses in the United States however delegate this authority to the FASB

Only companies that have both operations in the United States and subsidiaries in other countries

5 points

Question 18

The conceptual framework

It is no longer used since the adoption of the FASB in 1973.

it is now required through section 404 of the Sarbanes-Oxley Act.

it is the fundamental foundation of accounting standards.

It is the set of detailed and specific rules that must be followed for financial reporting.

5 points

Question 19

A series of equal periodic payments that begins more than one period after the payment agreement is called:

An annuity past due

An advanced annuity

A future annuity

A deferred annuity

5 points

Question 20

The FASB (Accounting Standards Codification) accounting standards coding project was designed to

Change GAAP for non-public companies that do not issue shares

Change GAAP for public companies

Take the place of the existing GAAP and integrate it with IFRS

Integrate and organize GAAP in a searchable database