Question 1

Which of the following expenditures should be expensed in the year incurred?

Accepted Answer

A)  Equipment 
B)  Targeted advertising 
C)  Prepaid rent 
D)  Research and development 
A)  Equipment 
B)  Targeted advertising 
C)  Prepaid rent 
D)  Research and development D

Question 2

Which of the following is the required treatment of research and development costs under international accounting rules?

Accepted Answer

A)  Research and development costs are expensed as incurred 
B)  Research and development costs are capitalized 
C)  Research costs are expensed and development costs are capitalized 
D)  Research costs are capitalized and development costs are expensed 
A)  Research and development costs are expensed as incurred 
B)  Research and development costs are capitalized 
C)  Research costs are expensed and development costs are capitalized 
D)  Research costs are capitalized and development costs are expensed C

Question 3

The following information is from Everly Corp.'s records at December 31, 2012:   If Everly has 4,000 shares of stock outstanding, earnings per share is approximately

Accepted Answer

A)  $34.62 
B)  $22.56 
C)  $16.94 
D)  $15.59 
A)  $34.62 
B)  $22.56 
C)  $16.94 
D)  $15.59 B

Question 4

Which of the following would probably be classified as a current liability?

Accepted Answer

A)  Accumulated depreciation on equipment 
B)  Payroll taxes payable 
C)  Lease obligation 
D)  Pension liability 
A)  Accumulated depreciation on equipment 
B)  Payroll taxes payable 
C)  Lease obligation 
D)  Pension liability

Question 5

A contingency is an uncertain circumstance involving a potential gain or loss that will not be resolved until some future event occurs. The following table lists the possible outcomes of a contingency. Complete the table by filling in the definition and required accounting for each possible outcome.

Accepted Answer

The answer of A contingency is an uncertain circumstance involving...

Question 6

Under which of the following conditions would hurricane damage be considered an extraordinary item for financial reporting purposes?

Accepted Answer

A)  Under any circumstance, hurricane damage should be classified as an extraordinary item 
B)  Only if hurricanes are unusual in nature and infrequent in occurrence in the geographic area 
C)  Only if hurricanes are normal in the geographic area but do not occur frequently 
D)  Only if hurricanes occur frequently in the geographic area but have been insured against 
A)  Under any circumstance, hurricane damage should be classified as an extraordinary item 
B)  Only if hurricanes are unusual in nature and infrequent in occurrence in the geographic area 
C)  Only if hurricanes are normal in the geographic area but do not occur frequently 
D)  Only if hurricanes occur frequently in the geographic area but have been insured against

Question 7

The entry to record sick days taken by an employee would include a

Accepted Answer

A)  Credit to Salaries Expense 
B)  Debit to Cash 
C)  Credit to Sick Days Payable 
D)  Debit to Sick Days Payable 
A)  Credit to Salaries Expense 
B)  Debit to Cash 
C)  Credit to Sick Days Payable 
D)  Debit to Sick Days Payable

Question 8

Fonda Company's fiscal year is the calendar year. During the month of June 2012, Fonda received a bill for $46,500 of property tax assessed that is due on July 15, 2012 for the period July 1, 2012 through June 30, 2013.
Prepare journal entries to record

Accepted Answer

The answer of Fonda Company's fiscal year is the calendar...

Question 9

Which of the following is the liability that represents a company's promise to make defined benefit pension payments to employees?

Accepted Answer

A)  Pension fund 
B)  Pension obligation 
C)  Net pension asset or liability 
D)  Pension-related interest cost 
A)  Pension fund 
B)  Pension obligation 
C)  Net pension asset or liability 
D)  Pension-related interest cost

Question 10

The following information relates to the defined benefit pension plan of Williams Corporation for the year ending December 31, 2012:   What is the net pension expense for Williams Corporation in 2012?

Accepted Answer

A)  $1,145,000 
B)  $605,000 
C)  $900,000 
D)  $655,000 
A)  $1,145,000 
B)  $605,000 
C)  $900,000 
D)  $655,000

Question 11

Gribble's fiscal year is the calendar year. During the month of July 2012, the following tax related events occurred at the Gribble Company:
  
Prepare journal entries to record

Accepted Answer

Prepare jo

Question 12

Marino, Inc. makes a sale and collects a total of $378, which includes an 8 percent sales tax. The amount credited to Sales Revenue is

Accepted Answer

A)  $378 
B)  $348 
C)  $400 
D)  $350 
A)  $378 
B)  $348 
C)  $400 
D)  $350

Question 13

Eldora, Inc. paid property taxes of $16,500 on June 30, 2012, for the period July 1, 2012, to June 30, 2013, and debited prepaid property tax expense. Eldora, Inc. uses a fiscal year end of September 30 for financial purposes. What is the adjusting entry Eldora, Inc. should make on September 30, 2012?

Accepted Answer

A)  
  
B)  
  
C)  
  
D)  
  
A)  
  
B)  
  
C)  
  
D)

Question 14

Bernal Company laid off 10 employees during the month of May. Bernal has determined that the postemployment cost of laying off these 10 employees will be a total of $120,000. What journal entry should Bernal make to record the termination of these employees?

Accepted Answer

A)  
  
B) 
  
C)  
  
D)  No journal entry should be made 
A)  
  
B) 
  
C)  
  
D)  No journal entry should be made

Question 15

Which of the following taxes is NOT included in the payroll tax expense of the employer?

Accepted Answer

A)  State unemployment taxes 
B)  Federal unemployment taxes 
C)  FICA taxes 
D)  Federal income taxes 
A)  State unemployment taxes 
B)  Federal unemployment taxes 
C)  FICA taxes 
D)  Federal income taxes

Question 16

Gowrie, Inc. began operations on January 1, 2012. At the end of its first year of business, Gowrie reported $465,000 income before taxes on its income statement. At the end of 2012, Gowrie also had $45,000 of incurred expenses that were not yet tax deductible according to income tax regulations. Gowrie's tax rate is 35%.

Accepted Answer

The answer of Gowrie, Inc. began operations on January 1,...

Question 17

Prepaid Property Taxes would typically appear on the balance sheet as a(n)

Accepted Answer

A)  Deferred liability 
B)  Liability 
C)  Asset 
D)  Long-term asset 
A)  Deferred liability 
B)  Liability 
C)  Asset 
D)  Long-term asset

Question 18

A large investment fund of stocks and bonds that is used to pay pension benefits to employees is a

Accepted Answer

A)  Pension fund 
B)  Pension obligation 
C)  Net pension asset or liability 
D)  Pension-related interest cost 
A)  Pension fund 
B)  Pension obligation 
C)  Net pension asset or liability 
D)  Pension-related interest cost

Question 19

The entry to recognize the estimated expense related to sick days would include a

Accepted Answer

A)  Credit to Salaries Expense 
B)  Credit to Cash 
C)  Credit to Sick Days Payable 
D)  Debit to Sick Days Payable 
A)  Credit to Salaries Expense 
B)  Credit to Cash 
C)  Credit to Sick Days Payable 
D)  Debit to Sick Days Payable

Question 20

The following information was taken from the records of Elton Corporation for the period ending December 31, 2012:   Assuming that 6,000 shares of stock are outstanding, earnings per share is approximately

Accepted Answer

A)  $1.40 
B)  $0.40 
C)  $0.27 
D)  $0.23 
A)  $1.40 
B)  $0.40 
C)  $0.27 
D)  $0.23

Exam 8: Completing the Operating Cycle

Which of the following expenditures should be expensed in the year incurred?

Which of the following is the required treatment of research and development costs under international accounting rules?

The following information is from Everly Corp.'s records at December 31, 2012: If Everly has 4,000 shares of stock outstanding, earnings per share is approximately

Which of the following would probably be classified as a current liability?

Under which of the following conditions would hurricane damage be considered an extraordinary item for financial reporting purposes?

The entry to record sick days taken by an employee would include a

Fonda Company's fiscal year is the calendar year. During the month of June 2012, Fonda received a bill for $46,500 of property tax assessed that is due on July 15, 2012 for the period July 1, 2012 through June 30, 2013. Prepare journal entries to record

Which of the following is the liability that represents a company's promise to make defined benefit pension payments to employees?

The following information relates to the defined benefit pension plan of Williams Corporation for the year ending December 31, 2012: What is the net pension expense for Williams Corporation in 2012?

Gribble's fiscal year is the calendar year. During the month of July 2012, the following tax related events occurred at the Gribble Company: Prepare journal entries to record

Marino, Inc. makes a sale and collects a total of $378, which includes an 8 percent sales tax. The amount credited to Sales Revenue is

Bernal Company laid off 10 employees during the month of May. Bernal has determined that the postemployment cost of laying off these 10 employees will be a total of $120,000. What journal entry should Bernal make to record the termination of these employees?

Which of the following taxes is NOT included in the payroll tax expense of the employer?

Prepaid Property Taxes would typically appear on the balance sheet as a(n)

A large investment fund of stocks and bonds that is used to pay pension benefits to employees is a

The entry to recognize the estimated expense related to sick days would include a

The following information was taken from the records of Elton Corporation for the period ending December 31, 2012: Assuming that 6,000 shares of stock are outstanding, earnings per share is approximately

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

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