Exam 8: Operating Activities

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

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?

Which of the following would not be suggestive of a company recognizing sales too early?

All of the following are true regarding accrual accounting except:

____________________ differences arise from revenues and expenses that GAAP requires firms to include in income before taxes but that the income tax law excludes from taxable income.

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.

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

An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the ending inventory valuation is

Gains and losses on cash flow hedges affect earnings ____________________ than those on fair value hedges.

The difference between the economic resources received from customers and the economic resources paid to suppliers,employees and other providers of goods and services is called ____________________.

One sign that a company may be recognizing sales too early is that it has unusually large amounts of ______________________________.

A contractor would not use ________________________________________ method of income recognition when there is substantial uncertainty regarding the total costs it will incur in completing the project.