Exam 8: Operating Activities

A company may try to paint a favorable picture of itself by accelerating the timing of revenues or estimating the collectible amounts too aggressively. In these cases the quality of accounting information declines because it does not represent the company's true economic condition and may not be sustainable. List four conditions which might suggest that a company is recognizing revenues too early?

Deferred tax liabilities result in future tax ____________________ when temporary differences reverse.

Which of the following is not a distinguishing characteristic of a derivative instrument?

Accountants use reserve accounts for various reasons, for each of the scenarios below describe a specific account example that matches the scenario. 1. The use of a reserve account in order to match expense with revenues. 2. The use of a reserve account in order to keep expense out of the income statement. 3. The use of a reserve account in order to revalue an asset, but delay the income recogrition effect

Under U.S. GAAP, application of the LIFO and FIFO inventory methods result in differences in the balance sheet, income statement and cash flow statement. Compare and contrast the effect of the two methods on each financial statement and determine the advantages and disadvantages of each method.

Gorilla, Corp. implemented a defined-benefit pension plan for its employees on January 2, 2012. The following data are provided for year 2012, as of December 31, 2012. Accumulated benefit obligation \1 03,000 Plan assets at fair value 78,000 Net period pension expense 90,000 Employer's contribution 70,000 What amount should Gorilla record as additional minimum pension liability at December 31, 2012?

A company that uses FIFO will find that its ___________________________________ account tends to be somewhat out of date.

If the portions of the firm's foreign operations in higher-tax-rate countries grew more rapidly than foreign operations in lower-tax-rate countries, the company may seek out more tax effective ways of operating abroad through all of the following means except: