accounts homework mcqs - Green Company, which began operations on January 1, 20X4, appropriately uses the

Question 1. Green Company, which began operations on January 1, 20X4, appropriately uses the installment method of accounting. The following information is available for 20X4:

What is the total amount of Green's installment sales for 20X4? (Points : 2)

Question 2. A city government has a nine year capital lease for property being used within the general fund. The lease was signed on January 1, Year 4, minimum lease payments total $90,000 but have a current present value of $69,000. Annual payments are $10,000, the effective interest rate is 10% and the first payment is made on December 31, Year 4.
When the lease is recorded on January 1, Year 4, which accounts are credited?
Fund-Based Statements Government-Wide Statements (Points : 2)

Question 3. A lessee had a ten-year capital lease requiring equal annual payments. The reduction of the lease liability in year 2 should equal (Points : 2)

Question 4. The retail inventory method includes which of the following in the calculation of both cost and retail amounts of goods available-for-sale? (Points : 2)

Question 5. Although the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) are involved in setting and enforcing generally accepted accounting principles (GAAP) in the U.S., there is only one body of GAAP that applies in the United States because: (Points : 2)

Question 6. If it is not practicable for an entity to estimate the fair value of a financial instrument, which of the following should be disclosed?
I. Information pertinent to estimating the fair value of the financial instrument.
II. The reasons it is not practicable to estimate fair value. (Points : 2)

Question 7.Interest cost included in the net pension cost recognized by an employer sponsoring a defined benefit pension plan represents the (Points : 2)

Question 8. What type of bond matures at different points in time? (Points : 2)

.Because Jab Co. uses different methods to depreciate equipment for financial statement and income tax purposes, Jab has temporary differences that will reverse during the next year and add to taxable income. Deferred income taxes that are based on these temporary differences should be classified in Jab's balance sheet as a (Points : 2)

Question 10. Which of the following statements about segment reporting is NOT correct? (Points : 2)

Question 11. Pine Football Company had a player contract with Duff that is recorded in its books at $500,000 on July 1st. Ace Football Company had a player contract with Terry that is recorded in its books at $600,000 on July 1st. On this date, Pine traded Duff to Ace for Terry and paid a cash difference of $50,000. The fair value of the Terry contract was $700,000 on the exchange date. Assuming the exchange has commercial substance, the Terry contract should be recorded in Pine's books at: (Points : 2)

Scott Corp. received cash of $20,000 that was included in revenues in its Year One financial statements, of which $12,000 will not be taxable until Year Two. Scott's enacted tax rate is 30% for Year One, and 25% for Year Two. What amount should Scott report in its Year One balance sheet for deferred income tax liability? (Points : 2)

Question 13.A firm has a weighted average number of 20,000 common shares selling at an average of $10 throughout the year and 11,000, 10 percent cumulative, $100 par value preferred shares. If the firm earns $210,000 after taxes, what is its Basic EPS? (Points : 2)

Question 14. Oregon Corp.’s stock transactions during the year were as follows:
§ January 1: 320,000 shares issued and outstanding.
§ April 1: 1 for 2 reverse stock split occurred.
§ July 1: Acquisition of Smith, Inc. in exchange for issuance of 60,000 shares in an acquisition method transaction.
§ October 1: 30,000 shares issued for cash.
What is Oregon’s weighted average number of shares outstanding? (Points : 2)

Question 15. Lore Co. changed from the cash basis of accounting to the accrual basis of accounting during the year. How should this change should be reported in Lore's current year financial statements? (Points : 2)

An entity purchased shares of its $100 par stock for retirement that was originally issued at $200 per share. The entity repurchased the stock for $250 per share. Upon retirement, which of the following accounts would NOT be affected? (Points : 2)

Question 17. On January 1, Year 1, the Trimble Corporation (Trimble) leases a piece of equipment to use for eight years. The equipment has an expected life of ten years and no anticipated salvage value. Trimble has an incremental borrowing rate of 5%. Annual payments for this asset are $9,000 with the first payment to be made immediately. At the end of the eight years, Trimble has the right to buy the asset for $10,000 in cash. This amount is expected to be significantly below the expected fair value of the equipment on that date so it is reasonable to expect Trimble to pay this amount. Trimble records depreciation based on the straight-line method and interest based on the effective rate method. The present value of an annuity due of $1 at 5% for eight years is assumed to be 6.80. The present value of an ordinary annuity of $1 at 5% for eight years is assumed to be 6.50. The present value of a single amount of $1 at 5% in eight years is assumed to be 0.66. What amount of depreciation expense should Trimble record for Year 1? (Points : 2)

Question 18. The Eagle Company reports sales in the current year of $300,000. Of this amount, 70 percent were credit sales and the rest were cash sales. The accounts receivable at the first day of the year was $60,000 but rose by $30,000 during the year to a $90,000 balance at the end of the year. The company did not write off any accounts during the year as bad and recognized no bad debt expense. If the company reports on the cash basis of accounting rather than the accrual basis, what amount of revenue should be recognized? (Points : 2)

Question 19. A voluntary health and welfare organization had the following asset inflows:

How should these items be reported?
Revenues Public Support (Points : 2)

Question 20. If a company uses the equity method to account for an investment in another company, which of the following is true? (Points : 2)