Question 41Reporting comprehensive income according to International Financial Reporting Standards can be accomplished by each of the following methods except In the statement of shareholders' equity A combined statement of income and comprehensive income In two separate statements The entity may choose either a combined statement of income and comprehensive income or two separate statements 1 3334 points Question 42Cost of goods sold is An asset account A revenue account An expense account A permanent equity account 1 3334 points Question 43Enhancing qualitative characteristics of accounting information include Relevance and comparability Comparability and timeliness Understandability and relevance Neutrality and consistency 1 3334 points Question 44Ace Bonding Company purchased merchandise inventory on account The inventory costs $2,000 and is expected to sell for $3,000 How should Ace record the purchase Inventory2,000Accounts payable2,000Cost of goods sold2,000Deferred revenue1,000Sales in advance3,000Cost of goods sold2,000Inventory payable2,000Cost of goods sold2,000Profit1,000Sales payable3,000 1 3334 points Question 45Which of the following is not a provision of the Public Company Accounting Reform and Investor Protection Act of 2002 Corporate executive accountability Auditor rotation Retention of work papers All of these are provisions of the Act 1 3334 points Question 46A series of equal periodic payments in which the first payment is made one compounding period after the date of the contract is A deferred annuity An ordinary annuity An annuity due A delayed annuity 1 3334 points Question 47A series of equal periodic payments that starts more than one period after the agreement is called An annuity due An ordinary annuity A future annuity A deferred annuity 1 3334 points Question 48Permanent accounts would not include Cost of goods sold Inventory Current liabilities Accumulated depreciation 1 3334 points Question 49Which of the following is not a characteristic that defines a reportable operating segment according to U S GAAP Operating results are regularly reviewed by the enterprise's chief operating officer Discrete financial information is available Engages in business activities from which it may recognize revenues and incur expenses Represents more than 20 of total company revenues, assets, or net income 1 3334 points Question 50George Jones is planning on a cruise for his 70 th birthday party He wants to know how much he should set aside at the beginning of each month at 6 interest to accumulate the sum of $4,800 in five years He should use a table for the Future value of an ordinary annuity of 1 Future value of an annuity due of 1 Future value of 1 Present value of an annuity due of 1 1 3334 points Question 51The acid test ratio is also known as the Current ratio Debt to equity ratio Times interest earned ratio Quick ratio 1 3334 points Question 52When converting an income statement from a cash basis to an accrual basis, cash received for services Exceed service revenue May exceed or be less than service revenue Is less than service revenue Equals service revenue 1 3334 points Question 53Which of the following is a characteristic of a contract for purposes of revenue recognition Commercial substance Nonverbal Reasonable profit margin Notarized within the company's state of incorporation 1 3334 points Question 54In the operating activities section of the statement of cash flows, we start with net income In the direct method In the indirect method In both the direct and the indirect methods In neither the direct nor the indirect methods 1 3334 points Question 55Long term solvency refers to The efficiency with which a company manages its resources The profitability of a company for a period of time The amount of current assets relative to long term assets The riskiness of a company with regard to the amount of liabilities in its capital structure 1 3334 points Question 56Which of the following is never a current liability account Accrued payroll Dividends payable Prepaid rent Subscriptions collected in advance from customers 1 3334 points Question 57The current ratio is calculated as Current assets divided by noncurrent assets Current assets divided by total assets Current assets divided by current liabilities Current assets divided by total liabilities 1 3334 points Question 58Which of the following is not a potential benefit of accrual accounting, compared to cash basis accounting Timeliness Better reflecting economic activity Periodicity Better matching of revenues and expenses 1 3334 points Question 59Mama's Pizza Shoppe borrowed $8,000 at 9 interest on May 1, 2016, with principal and interest due on October 31, 2017 The company's fiscal year ends June 30, 2016 What adjusting entry is necessary on June 30, 2016 No entry Interest expense240Interest payable240Interest expense120Interest payable120Prepaid interest120Interest payable120 1 3334 points Question 60Dave's Duds reported cost of goods sold of $2,000,000 this year The inventory account increased by $200,000 during the year to an ending balance of $400,000 What was the cost of merchandise that Dave's purchased during the year $1,600,000 $1,800,000 $2,200,000 $2,400,000 1 3334 points Question 61Notes payable that are due in two years are Current liabilities Long term intangible assets Long term liabilities Long term investments 1 3334 points Question 62Red Onion Restaurant would classify a six month prepaid insurance policy as Property, plant, and equipment Investment Current asset Goodwill 1 3334 points Question 63The FASB's conceptual framework's qualitative characteristics of accounting information include Full disclosure Relevance Going concern Historical cost 1 3334 points Question 64In a statement of cash flows prepared under International Financial Reporting Standards, each of the following items is typically classified as a financing cash flow except Interest paid Dividends paid Proceeds from the issuance of long term debt Dividends received 1 3334 points Question 65An asset that is generally not expected to be converted to cash or consumed within one year or the operating cycle is Building Accounts receivable Inventory Supplies 1 3334 points Question 66Which of the following is typically true for a bill and hold arrangement Revenue is recognized at the point in time when the arrangement is made Revenue is recognized at the point in time when goods are manufactured Revenue is recognized at the point in time when the delivery of goods is made Revenue is recognized at the point in time at which payment from the customer is received 1 3334 points Question 67Disclosure notes would not include Depreciation methods used and estimated useful life Definition of cash equivalents Details of pension plans Data to adjust the financial statements so that they are not misleading 1 3334 points Question 68The conceptual framework's qualitative characteristic of faithful representation includes Predictive value Neutrality Confirmatory value Timeliness 1 3334 points Question 69Assume a contract for the sale of goods specifies that payment is to be made four months after delivery of a product The seller is likely to do which of the following, with respect to the time value of money over the life of the contract Recognize interest expense Recognize interest revenue Recognize additional cost of goods sold Ignore the time value of money 1 3334 points Question 70Operating cash outflows would include Purchase of investments Purchase of equipment Payment of cash dividends Purchases of inventory 1 3334 points Question 71Which of the following groups is not among the external users for whom financial statements are prepared Customers Suppliers Employees Customers, suppliers, and employees are all external users of financial statements 1 3334 points Question 72On November 1, 2016, Taylor signed a one year contract to provide handyman services on an as needed basis to King Associates, with the contract to start immediately King agreed to pay Taylor $4,800 for the one year period Taylor is confident that King will pay that amount, but payment is not scheduled to occur until 2017 Taylor should recognize revenue in 2016 in the amount of $0 $800 $2,400 $4,800 1 3334 points Question 73In the Norwalk Agreement, the FASB and IASB pledged to Combine their organizations to form the BUSYB Make progress on specific MOU projects Achieve convergence by the year 2015 Remove existing differences between their standards 1 3334 points Question 74Lake Power Sports sells jet skis and other powered recreational equipment Customers pay one third of the sales price of a jet ski when they initially purchase the ski, and then pay another one third each year for the next two years Because Lake has little information about the ability to collect these receivables, it uses the installment sales method for revenue recognition In 2015, Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000 Lake collected $300,000 in 2015, $300,000 in 2016, and $300,000 in 2017 associated with those sales In 2016, Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000 Lake collected $500,000 in 2016, $400,000 in 2017, and $400,000 in 2018 associated with those sales In 2018, Lake also repossessed $200,000 of jet skis that were sold in 2016 Those jet skis had a fair value of $75,000 at the time they were repossessed Total cash collections on installment sales during 2016 would be $700,000 $300,000 $800,000 $0 1 3334 points Question 75Each of the following would be reported as items of other comprehensive income except Foreign currency translation gains Unrealized gains on investments accounted for as securities available for sale

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Question 41Reporting comprehensive income according to International Financial Reporting Standards can be accomplished by each of the following methods except: In the statement of shareholders'

Question 41Reporting comprehensive income according to International Financial Reporting Standards can be accomplished by each of the following methods except: In the statement of shareholders' equity. A combined statement of income and comprehensive income. In two separate statements. The entity may choose either a combined statement of income and comprehensive income or two separate statements.

1.3334 points

Question 42Cost of goods sold is: An asset account. A revenue account. An expense account. A permanent equity account.

1.3334 points

Question 43Enhancing qualitative characteristics of accounting information include: Relevance and comparability. Comparability and timeliness. Understandability and relevance. Neutrality and consistency.

1.3334 points

Question 44Ace Bonding Company purchased merchandise inventory on account. The inventory costs $2,000 and is expected to sell for $3,000. How should Ace record the purchase? Inventory2,000Accounts payable2,000Cost of goods sold2,000Deferred revenue1,000Sales in advance3,000Cost of goods sold2,000Inventory payable2,000Cost of goods sold2,000Profit1,000Sales payable3,000

1.3334 points

Question 45Which of the following is not a provision of the Public Company Accounting Reform and Investor Protection Act of 2002? Corporate executive accountability. Auditor rotation. Retention of work papers. All of these are provisions of the Act.

1.3334 points

Question 46A series of equal periodic payments in which the first payment is made one compounding period after the date of the contract is: A deferred annuity. An ordinary annuity. An annuity due. A delayed annuity.

1.3334 points

Question 47A series of equal periodic payments that starts more than one period after the agreement is called: An annuity due. An ordinary annuity. A future annuity. A deferred annuity.

1.3334 points

Question 48Permanent accounts would not include: Cost of goods sold. Inventory. Current liabilities. Accumulated depreciation.

1.3334 points

Question 49Which of the following is not a characteristic that defines a reportable operating segment according to U.S. GAAP? Operating results are regularly reviewed by the enterprise's chief operating officer. Discrete financial information is available. Engages in business activities from which it may recognize revenues and incur expenses. Represents more than 20% of total company revenues, assets, or net income.

1.3334 points

Question 50George Jones is planning on a cruise for his 70^th birthday party. He wants to know how much he should set aside at the beginning of each month at 6% interest to accumulate the sum of $4,800 in five years. He should use a table for the: Future value of an ordinary annuity of 1. Future value of an annuity due of 1. Future value of 1. Present value of an annuity due of 1.

1.3334 points

Question 51The acid-test ratio is also known as the: Current ratio. Debt to equity ratio. Times interest earned ratio. Quick ratio.

1.3334 points

Question 52When converting an income statement from a cash basis to an accrual basis, cash received for services: Exceed service revenue. May exceed or be less than service revenue. Is less than service revenue. Equals service revenue.

1.3334 points

Question 53Which of the following is a characteristic of a contract for purposes of revenue recognition? Commercial substance. Nonverbal. Reasonable profit margin. Notarized within the company's state of incorporation.

1.3334 points

Question 54In the operating activities section of the statement of cash flows, we start with net income: In the direct method. In the indirect method. In both the direct and the indirect methods. In neither the direct nor the indirect methods.

1.3334 points

Question 55Long-term solvency refers to: The efficiency with which a company manages its resources. The profitability of a company for a period of time. The amount of current assets relative to long-term assets. The riskiness of a company with regard to the amount of liabilities in its capital structure.

1.3334 points

Question 56Which of the following is never a current liability account? Accrued payroll. Dividends payable. Prepaid rent. Subscriptions collected in advance from customers.

1.3334 points

Question 57The current ratio is calculated as: Current assets divided by noncurrent assets. Current assets divided by total assets. Current assets divided by current liabilities. Current assets divided by total liabilities.

1.3334 points

Question 58Which of the following is not a potential benefit of accrual accounting, compared to cash-basis accounting? Timeliness. Better reflecting economic activity. Periodicity. Better matching of revenues and expenses.

1.3334 points

Question 59Mama's Pizza Shoppe borrowed $8,000 at 9% interest on May 1, 2016, with principal and interest due on October 31, 2017. The company's fiscal year ends June 30, 2016. What adjusting entry is necessary on June 30, 2016? No entry. Interest expense240Interest payable240Interest expense120Interest payable120Prepaid interest120Interest payable120

1.3334 points

Question 60Dave's Duds reported cost of goods sold of $2,000,000 this year. The inventory account increased by $200,000 during the year to an ending balance of $400,000. What was the cost of merchandise that Dave's purchased during the year? $1,600,000. $1,800,000. $2,200,000. $2,400,000.

1.3334 points

Question 61Notes payable that are due in two years are: Current liabilities. Long-term intangible assets. Long-term liabilities. Long-term investments.

1.3334 points

Question 62Red Onion Restaurant would classify a six-month prepaid insurance policy as: Property, plant, and equipment. Investment. Current asset. Goodwill.

1.3334 points

Question 63The FASB's conceptual framework's qualitative characteristics of accounting information include: Full disclosure. Relevance. Going concern. Historical cost.

1.3334 points

Question 64In a statement of cash flows prepared under International Financial Reporting Standards, each of the following items is typically classified as a financing cash flow except: Interest paid. Dividends paid. Proceeds from the issuance of long-term debt. Dividends received.

1.3334 points

Question 65An asset that is generally not expected to be converted to cash or consumed within one year or the operating cycle is: Building. Accounts receivable. Inventory. Supplies.

1.3334 points

Question 66Which of the following is typically true for a bill-and-hold arrangement? Revenue is recognized at the point in time when the arrangement is made. Revenue is recognized at the point in time when goods are manufactured. Revenue is recognized at the point in time when the delivery of goods is made. Revenue is recognized at the point in time at which payment from the customer is received.

1.3334 points

Question 67Disclosure notes would not include: Depreciation methods used and estimated useful life. Definition of cash equivalents. Details of pension plans. Data to adjust the financial statements so that they are not misleading.

1.3334 points

Question 68The conceptual framework's qualitative characteristic of faithful representation includes: Predictive value. Neutrality. Confirmatory value. Timeliness.

1.3334 points

Question 69Assume a contract for the sale of goods specifies that payment is to be made four months after delivery of a product. The seller is likely to do which of the following, with respect to the time value of money over the life of the contract? Recognize interest expense. Recognize interest revenue. Recognize additional cost of goods sold. Ignore the time value of money.

1.3334 points

Question 70Operating cash outflows would include: Purchase of investments. Purchase of equipment. Payment of cash dividends. Purchases of inventory.

1.3334 points

Question 71Which of the following groups is not among the external users for whom financial statements are prepared? Customers. Suppliers. Employees. Customers, suppliers, and employees are all external users of financial statements.

1.3334 points

Question 72On November 1, 2016, Taylor signed a one-year contract to provide handyman services on an as-needed basis to King Associates, with the contract to start immediately. King agreed to pay Taylor $4,800 for the one-year period. Taylor is confident that King will pay that amount, but payment is not scheduled to occur until 2017. Taylor should recognize revenue in 2016 in the amount of $0. $800. $2,400. $4,800.

1.3334 points

Question 73In the Norwalk Agreement, the FASB and IASB pledged to: Combine their organizations to form the BUSYB. Make progress on specific MOU projects. Achieve convergence by the year 2015. Remove existing differences between their standards.

1.3334 points

Question 74Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. Because Lake has little information about the ability to collect these receivables, it uses the installment sales method for revenue recognition. In 2015, Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2015, $300,000 in 2016, and $300,000 in 2017 associated with those sales. In 2016, Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2016, $400,000 in 2017, and $400,000 in 2018 associated with those sales. In 2018, Lake also repossessed $200,000 of jet skis that were sold in 2016. Those jet skis had a fair value of $75,000 at the time they were repossessed.
Total cash collections on installment sales during 2016 would be: $700,000. $300,000. $800,000. $0

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Question 75Each of the following would be reported as items of other comprehensive income except: Foreign currency translation gains. Unrealized gains on investments accounted for as securities available for sale.