When preparing a summary of significant accounting policies to include in its financial statements according to the guidance in FASB ASC 235-10-50-1, where is the information usually located? A. In the accompanying audit report B. On the face of the financial statements o C. In the first note to the financial statements O D. In the last note to the financial statements Submit Answers Which of the following is an example of a type I subsequent event? A. Product warranty reserve o B. Business purchase o C. Loss of equipment caused by flood O D. Sale of capital stock issue The disclosure that a reasonable estimate cannot currently be made and a description of the remediation commitment are examples of which of the following disclosures? A. Disclosures for probable but not reasonably estimable loss contingencies that may be material 0 B. Disclosures for reasonably possible loss contingencies C. Disclosures for reasonably possible losses in excess of accrued amounts D. Disclosures of indirect causation Which of the following statements regarding unconditional receivable-payable contracts is most accurate? o A. If a stockholder receives a payment as a loan, which is later charged to compensation, it is considered a financial instrument. If a supplier receives a prepayment, it is considered a contractual obligation to provide B. products. If a supplier receives a prepayment under a membership agreement, it is considered a C. financial instrument D. If a supplier receives a prepayment, it is considered a financial instrument Submit Answers In which of the following scenarios has the proper amount of detail been provided in the disclosures regarding collateral arrangements? o A. Winter Wool Supplies discloses an evaluation stating that its lender's investment is protected B. CHP Industries substitutes disclosures for its legal agreements concerning collaterals. Debbie's Dinners includes all assets obtainable for pledging in regards to its collateral C. arrangements. D. High Snow Supplies includes a list of assets that are pledged as collateral for loans in its note disclosures Submit Answers Which of the following companies has correctly dealt with a concentration disclosure in its financial statements? Due to a concentration, E-software anticipates there will be a material effect that may O A. influence a user's decisions. E-Software expects to lose the business relationship, but decides not to disclose it at this time because they have not lost it yet. B-Bay has a concentration in the volume of business it transacts with The Spring Foundation, B. its biggest customer. It discloses this concentration in the financial statements along with a statement that it does not expect revenue from this customer will be lost. Futuristic has a group of contributors with similar economic characteristics. Because its C. concentration is not with a single entity, it does not disclose the concentration in its financial statements Cross World has a significant concentration of foreign operations. However, because it does D. not believe it is reasonably possible for anything to occur that would cause a severe impact and disrupt foreign operations, it does not disclose this concentration. Submit Answers Which of the following statements is most accurate regarding typical leasing arrangements with related parties after the adoption of FASB ASC 842? o A. Related party transactions for leases only encompass transactions between parties that are either related by blood or marriage. o o B. Leasing arrangement agreements between related parties may be written or verbal C. To qualify as a related party leasing arrangement, the lease must not be cancelable by either party in the agreement D. They should be classified and presented the same as leases between unrelated parties O The Children's Foundation enters into a contract with The Lively Group. The contract obligates The Children's Foundation to deliver a specified amount of cash to The Lively Group if a specified event that is beyond the control of either entity occurs. The contract gives The Lively Group the right to receive the cash from The Children's Foundation if said event occurs. What type of contract is this? O A. Financial guarantee or other conditional exchange O B. Financial option contract o C. Conditional receivable payable contract D. Unconditional receivable-payable contract Submit Answers Which of the following companies has a disclosure for which FASB ASC 450 applies, but FASB ASC 275 does nof? O O Comfort House has a loss contingency at the financial statement date, and it is remotely A. possible that the estimate for this contingency will change by a material amount within the next year. B. The Garden Foundation has an asset on which the depreciation will be recalculated due to the life of the assets being extended C. The Summer Group has an asset that will be written down due to damage occurring to the asset that could not be repaired. D. The Winter Group has an estimate that affects the financial statements without involving a contingency o o Submit Answers