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Final, Test 1
Accounting 330
| Question | Answer |
|---|---|
| Accural Accounting is used because.. | It provides better indication of ability to generate cash flows than the cash basis |
| Which is the following organizations has been responsible for setting US Accounting Standards? | All of the above (Accounting Principles Board, Committee on Accounting Procedure, and Financial Accounting Standards Board) |
| The body that has the power to prescribe the accounting practices and standards employed by companies that fail under its jurisdiction | SEC |
| Which of the following represents a form of communication through finance but not through financial statements? | Presidents Letter |
| Which of the following is not a major challenge facing the accounting profession? | Accounting for hard assets |
| Which of the following statements is not an objective of financial reporting? | Provide information on the liquidation value of an enterprise |
| Generally accepted accounting principles... | Derive their credibility and authority from general recognition about the accounting profession |
| Basic assumptions may not be followed when a firm in bankruptcy reports financial | Going concern assumption |
| A decrease in net assets arising from something is called a | Loss |
| The underlying theme of the conceptual framework is | Decision usefulness |
| The two primary qualities that make accounting information useful for decision making are | Relevance and reliability |
| Maintaining a set of accounting records is.. | required by the internal revenue service and the foreign corrupt practices |
| Nominal accounts are also called | temporary accounts |
| Which of the following is a recordable event or item? | None (changes in management policy, the value of human resources, and changes in personnel) |
| Which of the following errors will cause an imbalance in the trial balance? | Listing the balance of an account with a debit balance in the credit column |
| A prepaid expense can best be described as an amount.. | paid and not currently matched with revenues |
| Which type of account is always debited during the closing process? | Revenue |
| Which of the following is an example of an accrued expense? | Property, taxes, incurred during the year, to be paid in the first quarter of the subsequent years |
| The something to property, something or adjusting entry to something will result in.. | understatement of revenues and un understatement of asset |
| Use of a multiple step income statement will result in the company recording a higher net income than if they used a single step income statement. TorF | False |
| Earning management generally makes income statement information more useful for predicting future earnings and cash flows. TorF | False |
| In order to be classified as an extraordinary item in the income statement, an even or transaction should be... | unusual to nature, infrequent, and material in amount |
| Under which of the following conditions would material flood damage be considered an extraordinary item for financial reporting purposes? | Only if the flood in the geographical area are unusual in nature and occur infrequently |
| Hark corp has an extraordinary loss of $50,000 an unusual gain of $35,000, and a tax rate of 40%. At what amount should Hark report each item? | Extraordinary Loss - (30,000) Unusual Gain - 35,000 |
| Income statement shows income before income taxes and extraordinary items in the amount of 2,055,000. The income taxes payable for the year are 1,080,000 incluiding 360,000 that is applicable to an extraordinary gain. The income before extra items is | $1,335,000 (1,080,000 + 360,000 -2,055,000) Incomes taxes payable for the year + amount applicable to extraordinary gain all minus income before taxes and items |
| Maso company recorded journal entries for the issuance of common stock for $40,000 the payment of $13,000 on accounts payable, and the payment of salaries expense of $21,000. What net effect do these entries have on owners equity? | Increase of $19,000 Issuance of common stock - salaries expense |
| South Corp has revenue of $200,000, expenses of $120,000 and dividends? of $80,000. When income summary is close to retained earning, the something debit or credit. Earning is a | Credit of $80,000 |
| Morie Company something for declaration of $50,000 of dividends, $32,000 increase in accounts recievables services rendered, and the purchase of equipment for $21,000. What is the result of these entries have on owners equity? | Decrease of $18,000 Change in accounts receivables - declarations of dividends |
| Panda corp paid cash of $18,000 on June 1, 2010 for one years rent in advance and recorded the transaction with a debit to prepaid rent. The December 31,2010 adjusting entry is | Debit rent expense and credit prepaid rent $10,500 (7/12 times $18,000) |
| The cash receivables for interest during 2010 was | Interest revenue - the difference in accrued interest payable |
| The cash paid for salaries during 2010 was | Salaries expense - the difference in accrued salaries payable |
| The cash paid for insurance premiums during 2010 was | Insurance Expense - the difference of prepaid insurance earned |
| accounts receivables and the related allowance for doubtful accounts are 460,000 debit and 700 credit respectively. It is estimated that 12,500 of the december 31 receivables will be uncollectible. Credit allowance account | $11,800 (estimated uncollectible minus the credited doubtful accounts) |
| Corp reported net income of $1,000,000 it declared and paid preferred stock dividends of $250,000 and common stock dividends of $100,000. During 2010 they had a weighted average of $200,000 common shares outstanding. Compute their earnings per share | 3.75 (Net income + preferred stock dividends)/Common stock |
| What would transformers report as its ending balance of accumulated other comprehensive income? | 4,000 Beginning Balance minus Retained earnings |
| Infrequent transactions: $150,000 gain from selling the only investments chase has owned. $210,000 gain on the sale of equipment. $70,000 loss on the write down of inventories. What amount report as total infrequent gains that are not extraordinary? | 80,000 Gain from selling investments - write own of inventories |
Created by:
scottmonk