Question 1

The definition of the economic concept of income is usually attributed to which of the following economists?

Accepted Answer

A) J.R.Hicks 
B) Paul Samuelson 
C) Ben Bernanke 
D) Adam Smith 
A) J.R.Hicks 
B) Paul Samuelson 
C) Ben Bernanke 
D) Adam Smith A

Question 2

One of the basic features of financing accounting is the

Accepted Answer

A) Direct measurement of economic resources and obligations and changes in them in terms of money and sociological and psychological impact 
B) Direct measurement of economic resources and obligations and changes in them in terms of money 
C) Direct measurement of economic resources and obligations and changes in them in terms of money and sociological impact 
D) Direct measurement of economic resources and obligations and changes in them in terms of money and psychological impact 
A) Direct measurement of economic resources and obligations and changes in them in terms of money and sociological and psychological impact 
B) Direct measurement of economic resources and obligations and changes in them in terms of money 
C) Direct measurement of economic resources and obligations and changes in them in terms of money and sociological impact 
D) Direct measurement of economic resources and obligations and changes in them in terms of money and psychological impact B

Question 3

The term revenue recognition conventionally refers to

Accepted Answer

A) The process of identifying transactions to be recorded as revenue in an accounting period. 
B) The process of measuring and relating revenue and expenses of an enterprise for an accounting period. 
C) The earning process that gives rise to revenue realization. 
D) The process of identifying those transactions that result in an inflow of assets from customers. 
A) The process of identifying transactions to be recorded as revenue in an accounting period. 
B) The process of measuring and relating revenue and expenses of an enterprise for an accounting period. 
C) The earning process that gives rise to revenue realization. 
D) The process of identifying those transactions that result in an inflow of assets from customers. D

Question 4

The installment method of recognizing revenue is not acceptable for financial reporting if

Accepted Answer

A) The collectability of the sales price is reasonably assured 
B) The installment period is less than 12 months 
C) The method is applied to only a portion of the total 
D) Collection expenses can be reasonably predicted 
A) The collectability of the sales price is reasonably assured 
B) The installment period is less than 12 months 
C) The method is applied to only a portion of the total 
D) Collection expenses can be reasonably predicted

Question 5

Under the provisions of FASB ASC 606,when a customer purchases a product but is not yet ready for delivery,this is referred to as

Accepted Answer

A) A repurchase agreement 
B) A consignment 
C) A principal-agent relationship 
D) A bill-and-hold arrangement 
A) A repurchase agreement 
B) A consignment 
C) A principal-agent relationship 
D) A bill-and-hold arrangement

Question 6

According to FASB ASC 606,the transaction price

Accepted Answer

A) Excludes discounts,volume rebates,coupons and free products,or services 
B) Is the amount of consideration that a company expects to receive from a customer 
C) Excludes time value of money if the contract involves a significant financing component 
D) Does not consider noncash consideration such as donations,gifts,equipment or labor 
A) Excludes discounts,volume rebates,coupons and free products,or services 
B) Is the amount of consideration that a company expects to receive from a customer 
C) Excludes time value of money if the contract involves a significant financing component 
D) Does not consider noncash consideration such as donations,gifts,equipment or labor

Question 7

Income is equal to the difference between the present value of the net assets at the end of the period and their present value at the beginning of the period,excluding the effects of investments by owners and distributions to owners is the definition of which of the following current value concepts?

Accepted Answer

A) Replacement cost 
B) Selling price 
C) Exit value 
D) Discounted present value 
A) Replacement cost 
B) Selling price 
C) Exit value 
D) Discounted present value

Question 8

According to FASB ASC 606,a transaction price for multiple performance obligations should be allocated

Accepted Answer

A) Based on selling price from the company's competitors 
B) Based on what the company could sell the goods for on a standalone basis 
C) Based on forecasted cost of satisfying performance obligation 
D) Based on total transaction price less residual value 
A) Based on selling price from the company's competitors 
B) Based on what the company could sell the goods for on a standalone basis 
C) Based on forecasted cost of satisfying performance obligation 
D) Based on total transaction price less residual value

Question 9

According to FASB ASC 606,a company must account for a contract modification as a new contract if the

Accepted Answer

A) Goods or services are interdependent on each other 
B) Promised goods or services are distinct 
C) Company has the right to receive consideration equal to standalone price 
D) Goods or services are distinct and company has right to receive the standalone price 
A) Goods or services are interdependent on each other 
B) Promised goods or services are distinct 
C) Company has the right to receive consideration equal to standalone price 
D) Goods or services are distinct and company has right to receive the standalone price

Question 10

Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant,is the definition of which of the following earnings management techniques?

Accepted Answer

A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept 
A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept

Question 11

Under FASB ASC 606,when multiple performance obligations exist in a contract,they should be accounted for as a single performance obligation when

Accepted Answer

A) Each service is interdependent and interrelated 
B) Both performance obligations are distinct but interdependent 
C) The product is distinct within the contract 
D) Determination cannot be made 
A) Each service is interdependent and interrelated 
B) Both performance obligations are distinct but interdependent 
C) The product is distinct within the contract 
D) Determination cannot be made

Question 12

Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges,is the definition of which of the following earnings management techniques?

Accepted Answer

A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept 
A) Taking a bath 
B) Creative acquisition accounting 
C) Creasing "cookie jar" reserves 
D) Abusing the materiality concept

Question 13

Under FASB ASC 606,the second step in the revenue recognition process is to

Accepted Answer

A) Allocate transaction price to the separate performance obligations 
B) Determine the transaction price 
C) Identify the contract with customers 
D) Identify the separate performance obligations in the contract 
A) Allocate transaction price to the separate performance obligations 
B) Determine the transaction price 
C) Identify the contract with customers 
D) Identify the separate performance obligations in the contract

Question 14

Uncertainty and risks inherent in business situations should be adequately considered in financial reporting.This statement is an example of the concept of

Accepted Answer

A) Conservatism 
B) Completeness 
C) Neutrality 
D) Representational faithfulness 
A) Conservatism 
B) Completeness 
C) Neutrality 
D) Representational faithfulness

Question 15

Each asset-inventory,plant,equipment,and so on-would be valued based on the selling price that would be realized if the firm chose to dispose of it is the definition of which of the following current value concepts?

Accepted Answer

A) Replacement cost 
B) Entry price 
C) Exit value 
D) Discounted present value 
A) Replacement cost 
B) Entry price 
C) Exit value 
D) Discounted present value

Question 16

Under FASB ASC 606,the last step in the revenue recognition process is to

Accepted Answer

A) Allocate transaction price to the separate performance obligations 
B) Recognize revenue when each performance obligation is satisfied 
C) Determine the transaction price 
D) Identify the contract with customers 
A) Allocate transaction price to the separate performance obligations 
B) Recognize revenue when each performance obligation is satisfied 
C) Determine the transaction price 
D) Identify the contract with customers

Question 17

Arid Lands,Inc.is engaged in extensive exploration for water in the Caprock Desert.If upon discovery of water the corporation does not recognize any revenue from water sales until the sales exceed the costs of exploration,the basis of revenue recognition being employed is the

Accepted Answer

A) Production basis 
B) Cash or collection)basis 
C) Sales or accrual)basis 
D) Sunk cost or cost recovery)basis 
A) Production basis 
B) Cash or collection)basis 
C) Sales or accrual)basis 
D) Sunk cost or cost recovery)basis

Question 18

In the transactions approach to income determination,income is measured by subtracting the expenses resulting from specific transactions during the period from revenues of the period also resulting from transactions.Under a strict transactions approach to income measurement,which of the following would not be considered a transaction?

Accepted Answer

A) Sale of goods on account at 20 percent markup 
B) Exchange of inventory at a regular selling price for equipment 
C) Adjustment of inventory in lower of cost or market inventory valuations when market is below cost. 
D) Payment of salaries 
A) Sale of goods on account at 20 percent markup 
B) Exchange of inventory at a regular selling price for equipment 
C) Adjustment of inventory in lower of cost or market inventory valuations when market is below cost. 
D) Payment of salaries

Question 19

Conventionally accountants measure income

Accepted Answer

A) By applying a value added concept 
B) By using a transactions approach 
C) As a change in the value of owners' equity 
D) As a change in the purchasing power of owners' equity 
A) By applying a value added concept 
B) By using a transactions approach 
C) As a change in the value of owners' equity 
D) As a change in the purchasing power of owners' equity

Question 20

Which of the following accounting theorists called of conservatism the most influential principle of valuation in accounting?

Accepted Answer

A) Henry Sweeney 
B) Robert Sprouse 
C) Robert Sterling 
D) Edgar Edwards 
A) Henry Sweeney 
B) Robert Sprouse 
C) Robert Sterling 
D) Edgar Edwards

The definition of the economic concept of income is usually attributed to which of the following economists?

One of the basic features of financing accounting is the

The term revenue recognition conventionally refers to

The installment method of recognizing revenue is not acceptable for financial reporting if

Under the provisions of FASB ASC 606,when a customer purchases a product but is not yet ready for delivery,this is referred to as

According to FASB ASC 606,the transaction price

Income is equal to the difference between the present value of the net assets at the end of the period and their present value at the beginning of the period,excluding the effects of investments by owners and distributions to owners is the definition of which of the following current value concepts?

According to FASB ASC 606,a transaction price for multiple performance obligations should be allocated

According to FASB ASC 606,a company must account for a contract modification as a new contract if the

Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant,is the definition of which of the following earnings management techniques?

Under FASB ASC 606,when multiple performance obligations exist in a contract,they should be accounted for as a single performance obligation when

Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges,is the definition of which of the following earnings management techniques?

Under FASB ASC 606,the second step in the revenue recognition process is to

Uncertainty and risks inherent in business situations should be adequately considered in financial reporting.This statement is an example of the concept of

Each asset-inventory,plant,equipment,and so on-would be valued based on the selling price that would be realized if the firm chose to dispose of it is the definition of which of the following current value concepts?

Under FASB ASC 606,the last step in the revenue recognition process is to

Arid Lands,Inc.is engaged in extensive exploration for water in the Caprock Desert.If upon discovery of water the corporation does not recognize any revenue from water sales until the sales exceed the costs of exploration,the basis of revenue recognition being employed is the

Conventionally accountants measure income

Which of the following accounting theorists called of conservatism the most influential principle of valuation in accounting?

The Development of Accounting Theory

The Pursuit of the Conceptual Framework

International Accounting

Research Methodology and Theories on the Uses of Accounting Information

Financial Statement I: the Income Statement

Financial Statements Ii: the Balance Sheet and the Statement of Cash Flows

Working Capital

Long-Term Assets I: Property, Plant, and Equipment

Long-Term Assets Ii: Investments and Intangibles

Long-Term Liabilities

Accounting for Income Taxes

Leases

Pensions and Other Postretirement Benefits

Equity

Accounting for Multiple Entities

Financial Reporting Disclosure Requirements and Ethical Responsibilities

Filters

Exam 5: Income Concepts, Revenue Recognition and Matching

The definition of the economic concept of income is usually attributed to which of the following economists?

One of the basic features of financing accounting is the

The term revenue recognition conventionally refers to

The installment method of recognizing revenue is not acceptable for financial reporting if

Under the provisions of FASB ASC 606,when a customer purchases a product but is not yet ready for delivery,this is referred to as

According to FASB ASC 606,the transaction price

According to FASB ASC 606,a transaction price for multiple performance obligations should be allocated

According to FASB ASC 606,a company must account for a contract modification as a new contract if the

Deliberately recording errors or ignoring mistakes in the financial statements under the assumption that their impact is not significant,is the definition of which of the following earnings management techniques?

Under FASB ASC 606,when multiple performance obligations exist in a contract,they should be accounted for as a single performance obligation when

Overstating sales returns or warranty costs in good times and using these overstatements in bad times to reduce similar charges,is the definition of which of the following earnings management techniques?

Under FASB ASC 606,the second step in the revenue recognition process is to

Uncertainty and risks inherent in business situations should be adequately considered in financial reporting.This statement is an example of the concept of

Each asset-inventory,plant,equipment,and so on-would be valued based on the selling price that would be realized if the firm chose to dispose of it is the definition of which of the following current value concepts?

Under FASB ASC 606,the last step in the revenue recognition process is to

Arid Lands,Inc.is engaged in extensive exploration for water in the Caprock Desert.If upon discovery of water the corporation does not recognize any revenue from water sales until the sales exceed the costs of exploration,the basis of revenue recognition being employed is the

Conventionally accountants measure income

Which of the following accounting theorists called of conservatism the most influential principle of valuation in accounting?

The Development of Accounting Theory

The Pursuit of the Conceptual Framework

International Accounting

Research Methodology and Theories on the Uses of Accounting Information

Financial Statement I: the Income Statement

Financial Statements Ii: the Balance Sheet and the Statement of Cash Flows

Working Capital

Long-Term Assets I: Property, Plant, and Equipment

Long-Term Assets Ii: Investments and Intangibles

Long-Term Liabilities

Accounting for Income Taxes

Leases

Pensions and Other Postretirement Benefits

Equity

Accounting for Multiple Entities

Financial Reporting Disclosure Requirements and Ethical Responsibilities

Filters