Question 1

Outline the criteria required for revenue recognition.

Accepted Answer

Revenue should be recorded when earned.

Question 2

Which of the following is not an indicator of a high earnings quality?

Accepted Answer

A)  Gain on the disposition of a discontinued operation 
B)  Proper revenue and expense recognition 
C)  Improving earnings from operations as a percentage of sales 
D)  Low operating expenses as a percentage of sales 
A)  Gain on the disposition of a discontinued operation 
B)  Proper revenue and expense recognition 
C)  Improving earnings from operations as a percentage of sales 
D)  Low operating expenses as a percentage of sales

Question 3

Corporations generally credit Income Tax Payable based on the amount of pretax accounting income multiplied by the income tax rate.

Accepted Answer

A) True 
 B)False

Question 4

Challenger 605 Corporation, whose income tax rate is 35%, has pretax accounting income of $4,850,000 and taxable income of $4,075,000. Under ASPE, the entry to record the income tax includes a:

Accepted Answer

A)  debit to Future Tax Asset for $271,250 
B)  debit to Future Tax Asset for $775,000 
C)  credit to Future Tax Liability for $271,250 
D)  credit to Future Tax Liability for $775,000 
A)  debit to Future Tax Asset for $271,250 
B)  debit to Future Tax Asset for $775,000 
C)  credit to Future Tax Liability for $271,250 
D)  credit to Future Tax Liability for $775,000

Question 5

Explain what is meant by the phrase "the quality of earnings."

Accepted Answer

When comparing the earnings of companies

Question 6

On January 1, 2013, Proven Technology Corporation's common shares account had a balance of $250,000, representing 25,000 shares issued at $10 per share. On May 15, 2013, 12,000 shares were issued for $150,000 cash. On August 31, 2013, a 10% stock dividend was declared and distributed. What is the balance in Common Shares appearing on the statement of shareholders' equity on December 31, 2013?

Accepted Answer

A)  $440,000 
B)  $300,000 
C)  $400,000 
D)  $415,000 
A)  $440,000 
B)  $300,000 
C)  $400,000 
D)  $415,000

Question 7

Which of the following would not be reported on the statement of shareholders' equity?

Accepted Answer

A)  interest expense 
B)  net income 
C)  repurchased share transactions 
D)  cash dividends declared but not paid 
A)  interest expense 
B)  net income 
C)  repurchased share transactions 
D)  cash dividends declared but not paid

Question 8

For 2014 Zip has accounting income (pre-tax) of $880,000. Their taxable income for 2014 has been calculated at $950,000. Prepare the journal entry under IFRS to record Zip's taxes for 2014 given a tax rate of 38%.

Accepted Answer

@#IMG-DLM&_TB4002_00

Question 9

Earnings per share (EPS) is calculated by:

Accepted Answer

A)  dividing the average number of common shares outstanding throughout the year by net income 
B)  dividing net income by the average number of common shares outstanding throughout the year 
C)  dividing net income by the number of common shares outstanding at the end of the year 
D)  dividing the number of common shares outstanding at the end of the year by net income 
A)  dividing the average number of common shares outstanding throughout the year by net income 
B)  dividing net income by the average number of common shares outstanding throughout the year 
C)  dividing net income by the number of common shares outstanding at the end of the year 
D)  dividing the number of common shares outstanding at the end of the year by net income

Question 10

Channel stuffing is a common fraud technique used to increase revenue.

Accepted Answer

A) True 
 B)False

Question 11

Companies issuing publicly-traded stock are required to have their financial statements audited by an external auditor. This requirement is placed on corporations by the:

Accepted Answer

A)  Canada Revenue Agency 
B)  Provincial Securities Commissions 
C)  Various federal and provincial incorporating acts 
D)  the Prime Minister of Canada 
A)  Canada Revenue Agency 
B)  Provincial Securities Commissions 
C)  Various federal and provincial incorporating acts 
D)  the Prime Minister of Canada

Outline the criteria required for revenue recognition.

Which of the following is not an indicator of a high earnings quality?

Corporations generally credit Income Tax Payable based on the amount of pretax accounting income multiplied by the income tax rate.

Challenger 605 Corporation, whose income tax rate is 35%, has pretax accounting income of $4,850,000 and taxable income of $4,075,000. Under ASPE, the entry to record the income tax includes a:

Explain what is meant by the phrase "the quality of earnings."

Which of the following would not be reported on the statement of shareholders' equity?

For 2014 Zip has accounting income (pre-tax) of $880,000. Their taxable income for 2014 has been calculated at $950,000. Prepare the journal entry under IFRS to record Zip's taxes for 2014 given a tax rate of 38%.

Earnings per share (EPS) is calculated by:

Channel stuffing is a common fraud technique used to increase revenue.

Companies issuing publicly-traded stock are required to have their financial statements audited by an external auditor. This requirement is placed on corporations by the:

The Financial Statements

Recording Business Transactions

Accrual Accounting and the Financial Statements

Internal Control and Cash

Short-Term Investments and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Long-Term Investments and the Time Value of Money

Liabilities

Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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Exam 11: The Income Statement, the Statement of Comprehensive Income, and the Statement of Shareholders Equity

Outline the criteria required for revenue recognition.

Which of the following is not an indicator of a high earnings quality?

Corporations generally credit Income Tax Payable based on the amount of pretax accounting income multiplied by the income tax rate.

Challenger 605 Corporation, whose income tax rate is 35%, has pretax accounting income of $4,850,000 and taxable income of $4,075,000. Under ASPE, the entry to record the income tax includes a:

Explain what is meant by the phrase "the quality of earnings."

Which of the following would not be reported on the statement of shareholders' equity?

For 2014 Zip has accounting income (pre-tax) of $880,000. Their taxable income for 2014 has been calculated at $950,000. Prepare the journal entry under IFRS to record Zip's taxes for 2014 given a tax rate of 38%.

Earnings per share (EPS) is calculated by:

Channel stuffing is a common fraud technique used to increase revenue.

Companies issuing publicly-traded stock are required to have their financial statements audited by an external auditor. This requirement is placed on corporations by the:

The Financial Statements

Recording Business Transactions

Accrual Accounting and the Financial Statements

Internal Control and Cash

Short-Term Investments and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Long-Term Investments and the Time Value of Money

Liabilities

Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters