Question 1

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 D

Question 2

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

Question 3

Which of the following is not a criteria outlined in SEC Staff Accounting Bulletin No.101 for the recognition of revenue?

Accepted Answer

A)  Persuasive evidence of an arrangement exists.
B)  Delivery has not occurred.
C)  The vendor's fee is fixed or determinable.
D)  Collectability is probable. B

Question 4

Determining periodic earnings and financial position depends on measuring economic resources and obligations and changes in them as these changes occur.This explanation pertains to

Accepted Answer

A)  Disclosure
B)  Accrual accounting
C)  Materiality
D)  The matching concept

Question 5

Discuss the difference between financial capital maintenance and physical capital maintenance.

Accepted Answer

The answer of Discuss the difference between financial capital maintenance...

Question 6

The principal disadvantage of using the percentage of completion method of recognizing revenue from long-term contracts is that it

Accepted Answer

A)  Is unacceptable for income tax purposes
B)  May require that intraperiod tax allocation procedures be used
C)  Gives results bases upon estimates that may be subject to considerable uncertainty
D)  Is likely to assign a small amount of revenue to a period during which much revenue was actually earned

Question 7

The cost to replace assets with similar assets in a similar condition 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

Question 8

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

Question 9

Which of the following is not an approach to determining current value?

Accepted Answer

A)  Replacement cost
B)  Thrift value
C)  Selling price
D)  Discounting present value

Question 10

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

Question 11

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.

Question 12

Discuss the differences between the economic and accounting concepts of income.

Accepted Answer

The answer of Discuss the differences between the economic and...

Question 13

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

Question 14

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

Question 15

Under what condition is it proper to recognize revenues prior to the sale of the merchandise?

Accepted Answer

A)  When the ultimate sale of the goods is at an assured sales price
B)  When the revenue is to be reported as an installment sale
C)  When the concept of internal consistency of amounts of revenue) must be complied with
D)  When management has a long-established policy to do so

Question 16

The definition of the economic concept ofincomeis usually attributed towhich of the following economists?

Accepted Answer

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

Question 17

Money income.Which refers to increases in the monetary valuation of resources.

Accepted Answer

The answer of Money income.Which refers to increases in the...

Question 18

The one-time overstatement of restructuring charges to reduce assets,which reduces future expenses,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

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

Question 20

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

Exam 5: Income Concepts,revenue Recognition and Matching

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

Which of the following is not a criteria outlined in SEC Staff Accounting Bulletin No.101 for the recognition of revenue?

Determining periodic earnings and financial position depends on measuring economic resources and obligations and changes in them as these changes occur.This explanation pertains to

Discuss the difference between financial capital maintenance and physical capital maintenance.

The principal disadvantage of using the percentage of completion method of recognizing revenue from long-term contracts is that it

The cost to replace assets with similar assets in a similar condition is the definition of which of the following current value concepts?

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

Which of the following is not an approach to determining current value?

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?

The term revenue recognition conventionally refers to

Discuss the differences between the economic and accounting concepts of income.

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?

One of the basic features of financing accounting is the

Under what condition is it proper to recognize revenues prior to the sale of the merchandise?

The definition of the economic concept ofincomeis usually attributed towhich of the following economists?

Money income.Which refers to increases in the monetary valuation of resources.

The one-time overstatement of restructuring charges to reduce assets,which reduces future expenses,is the definition of which of the following earnings management techniques?

Conventionally accountants measure income

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?