Question 1

Although LIFO generally provides higher quality earnings measures,FIFO generally provides higher _____________________________________________ measures.

Accepted Answer

quality fi

Question 2

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 3

A minimum liability for pension expense is reported when

Accepted Answer

A)  the projected benefit obligation exceeds the fair value of pension plan assets. 
B)  the pension expense reported for the period is greater than the funding amount for the same period. 
C)  the accumulated benefit obligation exceeds the fair value of pension plan assets. 
D)  vested benefits exceed the fair value of pension plan assets. 
A)  the projected benefit obligation exceeds the fair value of pension plan assets. 
B)  the pension expense reported for the period is greater than the funding amount for the same period. 
C)  the accumulated benefit obligation exceeds the fair value of pension plan assets. 
D)  vested benefits exceed the fair value of pension plan assets.

Question 4

Which of the following statements best describes the difference between U.S.GAAP and IFRS with respect to revenue recognition?

Accepted Answer

A)  IFRS has a substantial amount of industry specific guidance for revenue recognition. 
B)  IFRS revenue recognition is not consistent with U.S. GAAP in principle. 
C)  There are subtle differences in the wording of U.S. GAAP as compared with IFRS. 
D)  IFRS has four criteria and U.S. GAAP has five conditions for revenue recognition. 
A)  IFRS has a substantial amount of industry specific guidance for revenue recognition. 
B)  IFRS revenue recognition is not consistent with U.S. GAAP in principle. 
C)  There are subtle differences in the wording of U.S. GAAP as compared with IFRS. 
D)  IFRS has four criteria and U.S. GAAP has five conditions for revenue recognition.

Question 5

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.

Question 6

When firms use derivatives effectively to manage risks,the net gain or loss each period should be relatively ____________________.

Accepted Answer

The answer of When firms use derivatives effectively to manage...

Question 7

A typical defined benefit pension plan formula includes all of the following except:

Accepted Answer

A)  the number of years of employee service 
B)  the fair market value of pension plan assets 
C)  a credit for each year of annual service 
D)  the final salary at retirement date 
A)  the number of years of employee service 
B)  the fair market value of pension plan assets 
C)  a credit for each year of annual service 
D)  the final salary at retirement date

Question 8

Derivatives are financial instruments that derive their value from changes in any of the following underlyings except:

Accepted Answer

A)  Stock prices 
B)  Percentage discount on accounts receivable 
C)  Interest rates 
D)  Commodity prices 
A)  Stock prices 
B)  Percentage discount on accounts receivable 
C)  Interest rates 
D)  Commodity prices

Question 9

Funtime Corporation Assume that Funtime Corp.has agreed to construct a new playground for Durrey County for $2,300,000.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 Funtime Corp.estimates that the it will cost $1,600,000 to build the playground.
At the end of 2012 Funtime provided the following information about the project:
  If Funtime uses the percentage of completion to recognize revenue on the long-term contract how much gross margin should Funtime recognize in 2012?

Accepted Answer

A)  $389,200 
B)  $278,000 
C)  $556,000 
D)  $0 
A)  $389,200 
B)  $278,000 
C)  $556,000 
D)  $0

Question 10

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 11

All of the following are considered by analysts when assessing the quality of accounting except:

Accepted Answer

A)  Price variation and the speed at which inventory turns over 
B)  Any liquidation of FIFO inventory layers 
C)  Any physical deterioration or obsolescence of inventory 
D)  The inventory cost-flow assumption chosen by management 
A)  Price variation and the speed at which inventory turns over 
B)  Any liquidation of FIFO inventory layers 
C)  Any physical deterioration or obsolescence of inventory 
D)  The inventory cost-flow assumption chosen by management

Question 12

Global,Inc.provides consulting services throughout the world.The company pays taxes to the nation where revenues are earned.Information about the company's taxes are presented below:
   Required:
a.Using the information provided for Global,prepare the company's journal entry to record income taxes for 2012 and 2011.
b.Using the information provided for Global,determine the company's effective tax rate for 2012 and 2011.

Accepted Answer

The answer of Global,Inc.provides consulting services throughout the world.The company...

Question 13

Upton Company has consistently used the percentage-of-completion method of recognizing income.In 2010,Upton started on an $18,000,000 construction contract that was completed in 2012.The following information was taken from Upton's 2010 accounting records:   What amount of revenue should Upton recognize on the contract in 2010?

Accepted Answer

A)  $6,000,000 
B)  $5,400,000 
C)  $9,000,000 
D)  $0 
A)  $6,000,000 
B)  $5,400,000 
C)  $9,000,000 
D)  $0

Question 14

Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging?

Accepted Answer

A)  Record as an asset or liability and recognize changes in fair value in other comprehensive income. 
B)  Do not record as an asset or liability, record income from the transaction at maturity and recognize in earnings. 
C)  Record as an asset or liability, recognize changes in fair value currently in earnings. 
D)  Record as an asset or liability if off-balance sheet risk is material. 
A)  Record as an asset or liability and recognize changes in fair value in other comprehensive income. 
B)  Do not record as an asset or liability, record income from the transaction at maturity and recognize in earnings. 
C)  Record as an asset or liability, recognize changes in fair value currently in earnings. 
D)  Record as an asset or liability if off-balance sheet risk is material.

Question 15

Companies that engage in long-term contracts can recognize income using either the _____________________________________________ method or the ________________________________________ method.
completed contract,percentage-of-completion

Accepted Answer

percentage-of-comple

Question 16

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 17

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

Question 18

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

Accepted Answer

The answer of Deferred tax liabilities result in future tax...

Question 19

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

Accepted Answer

The answer of Deferred tax assets result in future tax...

Question 20

Under current U.S.GAAP unrealized gains and losses from four balance sheet items are reported in accumulated other comprehensive income or loss.Which of the following is not one of the balance sheet items?

Accepted Answer

A)  Derivatives held as cash flow hedges. 
B)  Deferred tax assets related to net operating loss carryforwards. 
C)  Minimum pension obligations. 
D)  Investment securities classified as available for sale. 
A)  Derivatives held as cash flow hedges. 
B)  Deferred tax assets related to net operating loss carryforwards. 
C)  Minimum pension obligations. 
D)  Investment securities classified as available for sale.

Although LIFO generally provides higher quality earnings measures,FIFO generally provides higher _____________________________________________ measures.

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?

A minimum liability for pension expense is reported when

Which of the following statements best describes the difference between U.S.GAAP and IFRS with respect to revenue recognition?

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

When firms use derivatives effectively to manage risks,the net gain or loss each period should be relatively ____________________.

A typical defined benefit pension plan formula includes all of the following except:

Derivatives are financial instruments that derive their value from changes in any of the following underlyings except:

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?

All of the following are considered by analysts when assessing the quality of accounting except:

Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging?

Companies that engage in long-term contracts can recognize income using either the _____ method or the method. completed contract,percentage-of-completion

The projected benefit obligation measures

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

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

Under current U.S.GAAP unrealized gains and losses from four balance sheet items are reported in accumulated other comprehensive income or loss.Which of the following is not one of the balance sheet items?

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

Financing Activities

Investing Activities

Accounting Quality

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 8: Operating Activities

Although LIFO generally provides higher quality earnings measures,FIFO generally provides higher _____________________________________________ measures.

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?

A minimum liability for pension expense is reported when

Which of the following statements best describes the difference between U.S.GAAP and IFRS with respect to revenue recognition?

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

When firms use derivatives effectively to manage risks,the net gain or loss each period should be relatively ____________________.

A typical defined benefit pension plan formula includes all of the following except:

Derivatives are financial instruments that derive their value from changes in any of the following underlyings except:

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?

All of the following are considered by analysts when assessing the quality of accounting except:

Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging?

Companies that engage in long-term contracts can recognize income using either the _____________________________________________ method or the ________________________________________ method. completed contract,percentage-of-completion

The projected benefit obligation measures

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

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

Under current U.S.GAAP unrealized gains and losses from four balance sheet items are reported in accumulated other comprehensive income or loss.Which of the following is not one of the balance sheet items?

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

Financing Activities

Investing Activities

Accounting Quality

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

Companies that engage in long-term contracts can recognize income using either the _____ method or the method. completed contract,percentage-of-completion