Question 1

When cash collectibility is uncertain,a firm using the ____________________ method recognizes revenue as it collects portions of the selling price in cash.

Accepted Answer

The answer of When cash collectibility is uncertain,a firm using...

Question 2

Which of the following is not part of the balance sheet approach when computing income tax expense?

Accepted Answer

A)  Identifying at each balance sheet date all differences between the book basis of assets, liabilities, and tax loss carryforwards 
B)  Eliminating permanent differences between book and tax basis. 
C)  Eliminating deferred tax assets. 
D)  Assessing the likelihood that the firm will realize the benefits of deferred tax assets in
The future. 
A)  Identifying at each balance sheet date all differences between the book basis of assets, liabilities, and tax loss carryforwards 
B)  Eliminating permanent differences between book and tax basis. 
C)  Eliminating deferred tax assets. 
D)  Assessing the likelihood that the firm will realize the benefits of deferred tax assets in
The future.

Question 3

A LIFO liquidation during periods when prices are increasing results in a company

Accepted Answer

A)  recording a large inventory write down. 
B)  recording higher earnings than it would have if it had used FIFO. 
C)  recording lower earnings than it would have if it had used FIFO. 
D)  having operational problems, but no financial statement effects. 
A)  recording a large inventory write down. 
B)  recording higher earnings than it would have if it had used FIFO. 
C)  recording lower earnings than it would have if it had used FIFO. 
D)  having operational problems, but no financial statement effects.

Question 4

At the end of 2012 Funtime provided the following information about the project: $$\begin{array} { l l l } 
& \text { Costs incurred } &\text { Estimuted rast } \
\underline{\text { Year }} & \underline{\text { to dnte } }&\underline{ \text { remainine } }\
2012 & \$ 1,200,000 & \$ 600,000
\end{array}$$

What percentage is playground complete?

Accepted Answer

A)  62.5% 
B)  66.7% 
C)  55.6% 
D)  50.0% 
A)  62.5% 
B)  66.7% 
C)  55.6% 
D)  50.0%

Question 5

Which of the following accounts would not be considered a reserve account?

Accepted Answer

A)  Allowance
For Doubtful Accounts 
B)  Estimated Warranty Liability 
C)  Prepaid Expense 
D)  Accumulated Depreciation 
A)  Allowance
For Doubtful Accounts 
B)  Estimated Warranty Liability 
C)  Prepaid Expense 
D)  Accumulated Depreciation

Question 6

Which of the following will most likely help identify an increasing proportion of uncollectible sales?

Accepted Answer

A)  accounts receivable turnover 
B)  the ratio of bad debt expense to sales 
C)  the ratio of sales returns to sales 
D)  the ratio of cost of sales to sales 
A)  accounts receivable turnover 
B)  the ratio of bad debt expense to sales 
C)  the ratio of sales returns to sales 
D)  the ratio of cost of sales to sales

Question 7

Which of the following calculations is used to determine the amount of the liability reported on the balance sheet for underfunding?

Accepted Answer

A)  Plan assets less projected benefit obligation. 
B)  Projected benefit obligation less plan assets. 
C)  Plan assets less accumulated benefit obligation. 
D)  Accumulated benefit obligation less plan assets. 
A)  Plan assets less projected benefit obligation. 
B)  Projected benefit obligation less plan assets. 
C)  Plan assets less accumulated benefit obligation. 
D)  Accumulated benefit obligation less plan assets.

Question 8

Playtime Corporation
Assume that Playtime Corp. has agreed to construct a new playground for SurreyCounty for $2,450,000. Construction of the new playground will begin on March 17, 2012 and is expected to be completed in August 2013. At the signing of the contract Playtime Corp. estimates that the it will cost $1,750,000 to build the playground
-At the end of 2012 Funtime provided the following information about the project: $$\begin{array} { l l l } 
& \text { Costs incurred } &\text { Estimuted rast } \
\underline{\text { Year }} & \underline{\text { to dnte } }&\underline{ \text { remainine } }\
2012 & \$ 1,200,000 & \$ 600000
\end{array}$$
If Playtime uses the percentage of completion to recognize revenue on the long-term contract how much gross margin should Playtime recognize in 2012?

Accepted Answer

A)  $389,200 
B)  $278,000 
C)  $556,000 
D)  $433,550 
A)  $389,200 
B)  $278,000 
C)  $556,000 
D)  $433,550

Question 9

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

Accepted Answer

The answer of A company that uses FIFO will find...

Question 10

Income tax expense consists of two components,the ____________________ portion and the ____________________ portion.

Accepted Answer

The answer of Income tax expense consists of two components,the...

Question 11

Falcon Networks
Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below:
  
-Based on the information provided by Falcon Networks how much cash did income taxes use during 2012?

Accepted Answer

A)  $154.19 million 
B)  $54.17 million 
C)  $208.36 million 
D)  $284.84 million 
A)  $154.19 million 
B)  $54.17 million 
C)  $208.36 million 
D)  $284.84 million

Question 12

The projected benefit obligation measures

Accepted Answer

A)  the pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels. 
B)  an estimated total benefit at retirement and then computes the level cost that will be sufficient, together with interest expected to accumulate at the assumed rate, to provide the total benefits at retirement. 
C)  the pension obligation on the basis of the plan formula applied to years of service to date and based on future salary levels. 
D)  the shortest possible period for funding to maximize the tax deduction. 
A)  the pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels. 
B)  an estimated total benefit at retirement and then computes the level cost that will be sufficient, together with interest expected to accumulate at the assumed rate, to provide the total benefits at retirement. 
C)  the pension obligation on the basis of the plan formula applied to years of service to date and based on future salary levels. 
D)  the shortest possible period for funding to maximize the tax deduction.

Question 13

The installment method of revenue recognition can be used when cash collectibility is uncertain.The installment method

Accepted Answer

A)  requires that no income is recognized until all installments are received. 
B)  requires that gross profit is recognized as each installment payment is received. 
C)  requires that entire cost of the sale be recovered prior to any income being recognized. 
D)  allows revenue recognition at the time of the sale. 
A)  requires that no income is recognized until all installments are received. 
B)  requires that gross profit is recognized as each installment payment is received. 
C)  requires that entire cost of the sale be recovered prior to any income being recognized. 
D)  allows revenue recognition at the time of the sale.

Question 14

The statement of cash flows allows the accountant to agree the net cash provided to the _________________________ the general ledger

Accepted Answer

The answer of The statement of cash flows allows the...

Question 15

Regarding actuarial assumptions,firms must disclose in notes to the financial statements all of the following except:

Accepted Answer

A)  the discount rate used to compute the pension benefit obligation. 
B)  the expected rate of return on pension investments. 
C)  estimates of the number of retirees over the future 10 years. 
D)  the rate of compensation increase. 
A)  the discount rate used to compute the pension benefit obligation. 
B)  the expected rate of return on pension investments. 
C)  estimates of the number of retirees over the future 10 years. 
D)  the rate of compensation increase.

Question 16

Parnell Industries
Parnell Industries sold a copy machine to Ranger Inc. on January 1, 2012. The sale price of the machine was $4,000,000 and the machine cost $3,200,000 for Parnell to manufacture. Ranger will make four payments at the end of each year, beginning with 2012, of $1,261,883 each. The four payments of $1,261,883 when discounted at 10% have a present value of $4,000,000. An amortization table appears below:
  
-If Parnell Industries is uncertain that it will collect all four payments from Ranger Inc.and uses the cost recovery method of accounting for revenue recognition what amount of gross profit should Parnell recognize in 2012 from the sale?

Accepted Answer

A)  $0 
B)  $861,883 
C)  $172,377 
D)  $800,000 
A)  $0 
B)  $861,883 
C)  $172,377 
D)  $800,000

Question 17

Under the completed contract method

Accepted Answer

A)  revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed. 
B)  revenue, cost, and gross profit are recognized during the production cycle. 
C)  revenue, cost, and gross profit are recognized at the time the contract is completed. 
D)  none of these 
A)  revenue and cost are recognized during the production cycle, but gross profit recognition is deferred until the contract is completed. 
B)  revenue, cost, and gross profit are recognized during the production cycle. 
C)  revenue, cost, and gross profit are recognized at the time the contract is completed. 
D)  none of these

Question 18

Many firms use derivative instruments to hedge exposure to changes in the fair value an asset or liability or to hedge exposure to variability in expected future cash flows.As an analyst examining the financial reports of a company that uses derivative instruments to hedge,what questions should be asked when thinking about derivatives and accounting quality?

Accepted Answer

Items that should be considered are:
1.O

Question 19

Which of the following is not a disclosure for derivatives required under SFAS No.133?

Accepted Answer

A)  Firms must describe their risk management strategy and how particular derivatives
Help accomplish their hedging objectives. 
B)  For fair value and cash flow hedges, firms must disclose the net gain or loss recognized
In earnings resulting from the hedges' ineffectiveness and the line item on the income statement that includes this net gain or loss. 
C)  For cash flow hedges, firms must describe the transactions or events that will result
In reclassifying gains and losses from other comprehensive income to net income
And the estimated amount of such reclassifications during the next 12 months. 
D)  The specifics of a model that simulates with a 95 percent or other confidence level the minimum, maximum, or average amount of loss that a firm would incur. 
A)  Firms must describe their risk management strategy and how particular derivatives
Help accomplish their hedging objectives. 
B)  For fair value and cash flow hedges, firms must disclose the net gain or loss recognized
In earnings resulting from the hedges' ineffectiveness and the line item on the income statement that includes this net gain or loss. 
C)  For cash flow hedges, firms must describe the transactions or events that will result
In reclassifying gains and losses from other comprehensive income to net income
And the estimated amount of such reclassifications during the next 12 months. 
D)  The specifics of a model that simulates with a 95 percent or other confidence level the minimum, maximum, or average amount of loss that a firm would incur.

Question 20

All of the following are events that can change the projected benefit obligation (PBO)during a period except:

Accepted Answer

A)  The payment of retirement benefits. 
B)  Amendments to the pension plan agreement 
C)  The interest accumulated on the liability. 
D)  All of these can change the PBO. 
A)  The payment of retirement benefits. 
B)  Amendments to the pension plan agreement 
C)  The interest accumulated on the liability. 
D)  All of these can change the PBO.

When cash collectibility is uncertain,a firm using the ____________________ method recognizes revenue as it collects portions of the selling price in cash.

Which of the following is not part of the balance sheet approach when computing income tax expense?

A LIFO liquidation during periods when prices are increasing results in a company

At the end of 2012 Funtime provided the following information about the project: Costs incurred Estimuted rast 2012 \ 1,200,000 \ 600,000 What percentage is playground complete?

Which of the following accounts would not be considered a reserve account?

Which of the following will most likely help identify an increasing proportion of uncollectible sales?

Which of the following calculations is used to determine the amount of the liability reported on the balance sheet for underfunding?

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

Income tax expense consists of two components,the portion and the portion.

Falcon Networks Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below: -Based on the information provided by Falcon Networks how much cash did income taxes use during 2012?

The projected benefit obligation measures

The installment method of revenue recognition can be used when cash collectibility is uncertain.The installment method

The statement of cash flows allows the accountant to agree the net cash provided to the _________________________ the general ledger

Regarding actuarial assumptions,firms must disclose in notes to the financial statements all of the following except:

Under the completed contract method

Which of the following is not a disclosure for derivatives required under SFAS No.133?

All of the following are events that can change the projected benefit obligation (PBO)during a period except:

Overview of Financial Reporting, financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Financing Activities

Investing Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Exam 9: Operating Activities

When cash collectibility is uncertain,a firm using the ____________________ method recognizes revenue as it collects portions of the selling price in cash.

Which of the following is not part of the balance sheet approach when computing income tax expense?

A LIFO liquidation during periods when prices are increasing results in a company

At the end of 2012 Funtime provided the following information about the project: Costs incurred Estimuted rast 2012 \ 1,200,000 \ 600,000 What percentage is playground complete?

Which of the following accounts would not be considered a reserve account?

Which of the following will most likely help identify an increasing proportion of uncollectible sales?

Which of the following calculations is used to determine the amount of the liability reported on the balance sheet for underfunding?

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

Income tax expense consists of two components,the ____________________ portion and the ____________________ portion.

Falcon Networks Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below: -Based on the information provided by Falcon Networks how much cash did income taxes use during 2012?

The projected benefit obligation measures

The installment method of revenue recognition can be used when cash collectibility is uncertain.The installment method

The statement of cash flows allows the accountant to agree the net cash provided to the _________________________ the general ledger

Regarding actuarial assumptions,firms must disclose in notes to the financial statements all of the following except:

Under the completed contract method

Which of the following is not a disclosure for derivatives required under SFAS No.133?

All of the following are events that can change the projected benefit obligation (PBO)during a period except:

Overview of Financial Reporting, financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Measurement

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Accounting Quality

Financing Activities

Investing Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow-Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Income tax expense consists of two components,the portion and the portion.