Question 1

What is the three step process necessary to report the elements of the balance sheet?

Accepted Answer

A)  identify, measure, and record 
B)  record, measure, and report 
C)  identify, measure, and report 
D)  review, record, and report 
A)  identify, measure, and record 
B)  record, measure, and report 
C)  identify, measure, and report 
D)  review, record, and report

Question 2

Which statement is false?

Accepted Answer

A)  The balance sheet of an entity purports to show the true value of the entity. 
B)  The balance sheet should show a company's liquidity. 
C)  The balance sheet reflects the financial capital of a company. 
D)  The balance sheet summarizes the financial position of an entity at a point in time. 
A)  The balance sheet of an entity purports to show the true value of the entity. 
B)  The balance sheet should show a company's liquidity. 
C)  The balance sheet reflects the financial capital of a company. 
D)  The balance sheet summarizes the financial position of an entity at a point in time.

Question 3

Accounts Payable Turnover in Days and Inventory Turnover in Days are considered liquidity capability ratios.

Accepted Answer

A) True 
 B)False

Question 4

What are the three categories of intangible assets?

Accepted Answer

1) Intangible assets with fini

Question 5

The amount of cash (or equivalent) that currently would be required to replace the service capacity of the asset is called the asset's

Accepted Answer

A)  historical cost 
B)  current replacement cost 
C)  current exit value 
D)  present value 
A)  historical cost 
B)  current replacement cost 
C)  current exit value 
D)  present value

Question 6

On the balance sheet, treasury stock is classified as a

Accepted Answer

A)  long-term investment account 
B)  contra shareholders' equity account 
C)  companion shareholders' equity account 
D)  contra asset account 
A)  long-term investment account 
B)  contra shareholders' equity account 
C)  companion shareholders' equity account 
D)  contra asset account

Question 7

Which of the following assets is most likely reported at its historical cost on the balance sheet?

Accepted Answer

A)  short-term investments 
B)  merchandise inventory 
C)  net accounts receivable 
D)  prepaid insurance 
A)  short-term investments 
B)  merchandise inventory 
C)  net accounts receivable 
D)  prepaid insurance

Question 8

A distribution to owners includes paying dividends, repurchasing common shares, transferring assets to the company, rendering services, and incurring liabilities.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following characteristics must an economic resource have in order to be classified as an asset?

Accepted Answer

A)  acquired as a result of a past transaction 
B)  future economic benefit potential 
C)  under the control of the business entity 
D)  all of these choices 
A)  acquired as a result of a past transaction 
B)  future economic benefit potential 
C)  under the control of the business entity 
D)  all of these choices

Question 10

A subsequent event is an event that occurs

Accepted Answer

A)  after the annual report is issued 
B)  anytime after the end of the accounting period 
C)  between the end of the accounting period and the date the annual report is issued 
D)  anytime before the annual report is issued 
A)  after the annual report is issued 
B)  anytime after the end of the accounting period 
C)  between the end of the accounting period and the date the annual report is issued 
D)  anytime before the annual report is issued

Question 11

The elements of the financial statements are defined in FASB Statement of Financial Accounting Concepts No. 8.

Accepted Answer

A) True 
 B)False

Question 12

Assume an asset is measured by the amount of cash (or its equivalent) into which it is expected to be converted in an orderly transaction between market participants on the date of measurement. Which measurement alternative is in use in this case?

Accepted Answer

A)  fair value 
B)  historical cost 
C)  present value 
D)  reliable value 
A)  fair value 
B)  historical cost 
C)  present value 
D)  reliable value

Question 13

Which of the following is least likely to be included in long-term liabilities?

Accepted Answer

A)  obligations for future pension payments 
B)  capital leases payable 
C)  liabilities on options to sell stock 
D)  unearned revenues 
A)  obligations for future pension payments 
B)  capital leases payable 
C)  liabilities on options to sell stock 
D)  unearned revenues

Question 14

Name five analyses or ratios used to evaluate a company's performance.

Accepted Answer

@#IMG-DLM&_TB6205_00

Question 15

Current assets are cash or other assets that are reasonably expected to be converted into cash, sold, or consumed within one year or a normal operating cycle. An operating cycle is defined as the company's ability to spend cash

Accepted Answer

A)  to pay off the company's liabilities 
B)  to acquire inventory, which is sold and returned to cash 
C)  to acquire inventory, which is sold to customers in the normal course of business 
D)  in the generation of services, which can result in an increase in revenue and net income from operations 
A)  to pay off the company's liabilities 
B)  to acquire inventory, which is sold and returned to cash 
C)  to acquire inventory, which is sold to customers in the normal course of business 
D)  in the generation of services, which can result in an increase in revenue and net income from operations

Question 16

Which of the following is included under the heading "Capital and reserves" for IFRS financial statements?

Accepted Answer

A)  accumulated net profits or losses 
B)  common stock 
C)  additional paid-in capital 
D)  all of these choices 
A)  accumulated net profits or losses 
B)  common stock 
C)  additional paid-in capital 
D)  all of these choices

Question 17

All of the following items would appear on the balance sheet except

Accepted Answer

A)  an investment in another company's bonds 
B)  an investment in marketable securities 
C)  a realized gain on the sale of a equipment 
D)  the premium related to a bond liability that is still two years from maturity 
A)  an investment in another company's bonds 
B)  an investment in marketable securities 
C)  a realized gain on the sale of a equipment 
D)  the premium related to a bond liability that is still two years from maturity

Question 18

GAAP requires disclosures relating to asset allocation and revenue recognition, any deviations from the acceptable norm must be disclosed.

Accepted Answer

A) True 
 B)False

Question 19

FASB's definition of fair value is characterized as a measure of market-based entry value, which would be the amount a company paid to acquire the asset.

Accepted Answer

A) True 
 B)False

Question 20

All of the following are examples of subsequent events that would be disclosed in the footnotes to the financial statements except

Accepted Answer

A)  fire or flood loss 
B)  a litigation settlement 
C)  a bond issuance after the balance sheet date 
D)  the write off of an uncollectible account 
A)  fire or flood loss 
B)  a litigation settlement 
C)  a bond issuance after the balance sheet date 
D)  the write off of an uncollectible account

Exam 4: The Balance Sheet and the Statement of Shareholders Equity

What is the three step process necessary to report the elements of the balance sheet?

Which statement is false?

Accounts Payable Turnover in Days and Inventory Turnover in Days are considered liquidity capability ratios.

What are the three categories of intangible assets?

The amount of cash (or equivalent) that currently would be required to replace the service capacity of the asset is called the asset's

On the balance sheet, treasury stock is classified as a

Which of the following assets is most likely reported at its historical cost on the balance sheet?

A distribution to owners includes paying dividends, repurchasing common shares, transferring assets to the company, rendering services, and incurring liabilities.

Which of the following characteristics must an economic resource have in order to be classified as an asset?

A subsequent event is an event that occurs

The elements of the financial statements are defined in FASB Statement of Financial Accounting Concepts No. 8.

Assume an asset is measured by the amount of cash (or its equivalent) into which it is expected to be converted in an orderly transaction between market participants on the date of measurement. Which measurement alternative is in use in this case?

Which of the following is least likely to be included in long-term liabilities?

Name five analyses or ratios used to evaluate a company's performance.

Current assets are cash or other assets that are reasonably expected to be converted into cash, sold, or consumed within one year or a normal operating cycle. An operating cycle is defined as the company's ability to spend cash

Which of the following is included under the heading "Capital and reserves" for IFRS financial statements?

All of the following items would appear on the balance sheet except

GAAP requires disclosures relating to asset allocation and revenue recognition, any deviations from the acceptable norm must be disclosed.

FASB's definition of fair value is characterized as a measure of market-based entry value, which would be the amount a company paid to acquire the asset.

All of the following are examples of subsequent events that would be disclosed in the footnotes to the financial statements except

The Demand for and Supply of Financial Accounting Information

Financial Reporting: Its Conceptual Framework

Review of a Companys Accounting System

The Income Statement and the Statement of Cash Flows

Cash and Receivables

Inventories: Cost Measurement and Flow Assumptions

Inventories: Special Valuation Issues

Current Liabilities and Contingencies

Property, Plant, and Equipment: Acquisition and Subsequent Investments

Depreciation, Depletion, Impairment, and Disposal

Intangibles

Investments and Long-Term Receivables

Financing Liabilities: Bonds and Notes Payable

Contributed Capital

Retained Earnings and Earnings Per Share

Advanced Issues in Revenue Recognition

Accounting for Income Taxes

Accounting for Postretirement Benefits

Accounting for Leases

The Statement of Cash Flows

Accounting for Changes and Errors

Time Value of Money Module

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