acg4111 week 4 post test

Question 1

1. Current liabilities are normally recorded at the amount expected to be paid rather than at their present value. This practice can be supported by GAAP according to the concept of:

Conservatism

Consistency

Matching

Materiality

5 points

Question 2

1. Which of the following is an example of a change in accounting principle?

A change in inventory costing methods

A change in the actuarial life expectancies of employees under a pension plan.

A change in the estimated useful life of a depreciable asset

Consolidating a new subsidiary

5 points

Question 3

1. When researching retirement obligations in the FASB Accounting Standards Codification you would look under section

210

310

410

510

10 points

Question 4

1. When researching the statement of cash flows in the FASB Accounting Standard Codification you would look under section

105

230

405

705

10 points

Question 5

1. Different from a loss contingency, a gain contingency

Usually is not reflected in the financial statements and would contain adequate disclosure of the contingency that is not misleading as to the likelihood of realization

Usually is not recognized in the financial statements and no disclosure is ever needed

Usually is reflected in the financial statements and a full disclosure containing all possible outcomes of the contingency whether likely or not

Usually is reflected in the financial statements but no disclosure is necessary

10 points

Question 6

1. Proper financial statement disclosure for long term obligations would include

A supporting schedule showing only the current amount as of the balance sheet date

A supporting schedule showing the 5 years following the latest balance sheet date

No disclosure is needed since the obligation is past the balance sheet date

No disclosure is needed since the obligation reflects a future benefit to the organization

10 points

Question 7

1. Which of the following is not required by generally accepted accounting principles?

Cash flow per share

Disclosure notes

Earnings per share

Statement of cash flows

5 points

Question 8

1. As a staff accountant, you discovered that due to a change in accounting rules, you now need to report consolidated financial statements for a new entity. This change should be reported

No reporting is required since it is a new entity

Only if asked by your supervisors to prepare consolidated financial statements for the new entity

Prospectively

Retrospectively

5 points

Question 9

1. A $500,000 bond issue sold for 98. Therefore, the bonds:

Sold at a discount which is recorded along with a debit to bonds payable and a credit to cash.

Sold at a discount which is recorded along with a debit to cash and a credit to bonds payable

Sold at a premium which is recorded along with a debit to bonds payable and a credit to cash

Sold at a premium which is recorded along with a debit to cash and a credit to bonds payable

5 points

Question 10

1. Which of the following would increase the employer’s periodic pension expense in the year the event occurs?

Amortization of net gains

Benefits paid to retirees

Expected return on plan assets

Service costs

5 points

Question 11

1. ABC declared and paid cash dividends in January of the current year to its common shareholders. The dividend

Has no effect on the earnings per share for the coming year

Will be added to the denominator of the earnings per share fraction for the current year

Will be added to the numerator of the earnings per share fraction for the current year

Will be subtracted from the numerator of the earnings per share fraction for the current year

5 points

Question 12

1. Treasury stock will

Decrease stockholder’s equity

Have no effect on stockholders' equity

Increase stockholders' equity

Increase the par value of common stock while decreasing the value of preferred stock

5 points

Question 13

1. When calculating EPS stock dividends distributed in June are

Calculated from June to the end of the year

Calculated from the beginning of the year until the distribution occurred

Calculated retrospectively

Not used for EPS calculations since they are not cash dividends

5 points

Question 14

1. A(n) ___ lease includes a noncancelable lease term

Capital (Financial)

Operating

Equity cancelable

Bargain

5 points

Question 15

1. Four conditions need to occur for an accrual of sick pay for employees. Which is not one of the conditions?

The amount can be reasonable estimated

The benefit can be accumulated over time

The obligation is for service already performed

The payment is required to be made in the current year

10 points

Question 16

1. Stock options can be purchased

At anytime, for any price they want, for any number of shares

At a specific time, for a specific price, for a specific number of shares

At a specific time, for the current market price, for any number of shares

At any time, for a specific price, for a specific number of shares

10 points

Question 17

1. Your supervisor asked you to determine if the journal entry created by a new employee for contingencies is correct. Where would you look to ensure the information follows GAAP?

AICPA rules and pronouncements

FASB Codification System

IFRS pronouncements

IIA standards on financial reporting

10 points

Question 18

1. When researching the different types of leases available to the Lessee and Lessor, you discover

Both could have operating leases

Only the Lessee can have a capital (financial) lease

Only the Lessee can have a direct financing lease

Both could have sales-type leases

10 points

Question 19

1. Which of the following would not be an ethical dilemma

A change in an accounting estimate that is accounted for prospectively

You find out that items included in year end inventory are damaged and your supervisor tells you to correct the situation next year.

You sell your receivables at the end of the year in an effort to generate cash and improve the cash flows statement

Your company issues higher stock dividends due to cash flow problems and explains to the shareholders that it is in order to give them a better return.

5 points

Question 20

1. An employee has worked for ABC Company for 10 years and is vested in the company's pension plan. The employee decided to leave ABC Company for a position at a competitor. ABC Company's position is that ethically the employee is not entitled to pension benefits since he is taking a position with a competitor. Which of the following is correct?

The employee will be able to receive pension benefits from ABC Company when he leaves, there is no ethics violation

The employee will not be able to receive pension benefits from ABC Company because he is working for a competitor and that is an ethics violation

The employee will not be able to receive pension benefits from ABC Company because he is working for a competitor and is not yet 62 years olds which is normal retirement age

The employee will not be able to receive pension benefits from ABC Company because he signed a non-compete clause when he was hired