Download (TCO A) The IASB: (Points: 5) governs accounting standards in the

(TCO A) The IASB: (Points: 5)
governs accounting standards in the U.S.
is working on a convergence project with the FASB.
sets the accounting standards for only European countries.
plays only a minor part in accounting rule making throughout the world.
2. (TCO A) The body that has the power to prescribe the accounting practices and standards to be
employed by companies that fall under its jurisdiction is the (Points: 5)
SEC
AICPA
IASB
GASB
3. (TCO A) The characteristic that is demonstrated when a high degree of consensus can be secured
among independent measurers using the same measurement methods is (Points: 5)
relevance.
reliability.
verifiability.
neutrality.
4. (TCO A) The elements of financial statements include investments by owners. These are increases in
an entity's net assets resulting from owners" (Points: 5)
transfers of assets to the entity.
rendering services to the entity.
satisfaction of the liabilities of the entity.
all of the above.
5. (TCO A) Which of the following is not a basic element of financial statements? (Points: 5)
Balance Sheet
Losses
Revenues
6. (TCO A) Which basic element of financial statements arise from peripheral or incidental transactions?
(Points: 5)
Assets
Liabilities
Gains
Expenses
7. (TCO A) What is the quality of information that enables users to better forecast future operations?
(Points: 5)
Reliability.
Materiality.
Comparability.
Relevance.
8. (TCO A) Accounting information is considered to be relevant when it (Points: 5)
can be depended on to represent the economic conditions and events that is intended to represent.
is capable of making a difference in a decision.
is understandable by reasonably informed users of accounting information.
is verifiable and neutral.
9. (TCO A) Financial information exhibits the characteristic of consistency when (Points: 5)
expenses are reported as charges against revenue in the period in which they are paid.
accounting entities give accountable events the same accounting treatment from period to period.
extraordinary gains and losses are not included on the income statement.
accounting procedures are adopted which give a consistent rate of net income
10. (TCO A) Which of the following is not a basic assumption underlying the financial accounting
structure? (Points: 5)
Economic entity assumption.
Going concern assumption.
Periodicity assumption.
Historical cost assumption.
11. (TCO A) Under current GAAP, inflation is ignored in accounting due to the (Points: 5)
Economic entity assumption.
going concern assumption.
monetary unit assumption.
periodicity assumption.
12. (TCO A) What accounting concept justifies the usage of accruals and deferrals? (Points: 5)
Going concern assumption
Materiality constraint
Consistency characteristic
Monetary unit assumption
13. (TCO D) Balance sheet information is useful for all of the following except to (Points: 5)
compute rates of return
analyze cash inflows and outflows for the period
evaluate capital structure
assess future cash flows.
14. (TCO D) The balance sheet contributes to financial reporting by providing a basis for all of the
following except (Points: 5)
computing rates of return.
evaluating the capital structure of the enterprise.
determining the increase in cash due to operations.
assessing the liquidity and financial flexibility of the enterprise.
15. (TCO D) One criticism not normally aimed at a balance sheet prepared using current accounting and
reporting standards is (Points: 5)
failure to reflect current value information.
the extensive use of separate classifications.
an extensive use of estimates.
failure to include items of financial value that cannot be recorded objectively.
16. (TCO D) Stine Corp.'s trial balance reflected the following account balances at December 31, 2010:
Accounts receivable (net)
Trading securities
Accumulated depreciation on equipment and furniture
Cash
Inventory
Equipment
Patent
Prepaid expenses
Land held for future business site 18,000
$24,000
6,000
15,000
11,000
30,000
25,000
4,000
2,000
In Stine's December 31, 2010 balance sheet, the current assets total is:
(Points: 5)
$90,000
$82,000
$77,000
$73,000
17. (TCO D) The current assets section of the balance sheet should include (Points: 5)
cash
treasury stock
goodwill
machinery
18. (TCO D) The current assets section of the balance sheet should include (Points: 5)
accounts receivables.
long-term debt.
retained earnings.
patents.
19. (TCO D) Which of the following is not a required supplemental disclosure for the balance sheet?
(Points: 5)
Contingencies
Financial Forecasts
Accounting policies
Contractual situations
20. (TCO D) Typical contractual situations that are disclosed in the notes to the balance sheet include all
of the following except (Points: 5)
debt covenants
lease obligations
advertising contracts
pension obligations
21. (TCO D) Equity or debt securities held to finance future construction of additional manufacturing
plants should be classified on the balance sheet as: (Points: 5)
current assets.
property, plant and equipment.
intangible assets.
long-term investments.
22. (TCO D) Working capital is (Points: 5)
capital that has been invested in the business.
unappropriated retained earnings.
cash and receivables less current and long-term liabilities.
none of the above.