STRAYER ACC499 midterm exam part 1 and part 2

• Question 1

4 out of 4 points

A lease will be treated as a direct financing lease by the lessor when

• Question 2

4 out of 4 points

As a generalized statement regarding lease accounting, which statement best describes U.S. versus international accounting principles?

• Question 3

4 out of 4 points

When a lessor receives cash on an operating lease, which of the following accounts is increased?

• Question 4

4 out of 4 points

Any initial direct costs incurred by the lessor for a lease agreement that is classified as an operating lease should be

• Question 5

4 out of 4 points

Lessee leased some land and buildings from Lessor. There was no transfer of ownership and no bargain purchase option. If the fair value of the land is less than a certain percentage of the total fair value of the leased property at the inception of the lease, both the lessee and the lessor may consider the land and buildings as a single unit. What is that percentage?

• Question 6

4 out of 4 points

Which of the following facts would require a lessee to classify a lease as a capital lease?

• Question 7

4 out of 4 points

Any initial direct costs incurred by the lessor for a sales-type lease should be

• Question 8

4 out of 4 points

A direct financing lease differs from a sales-type lease in that

• Question 9

4 out of 4 points

Which of the following is not a required disclosure by a lessee of an operating lease?

• Question 10

4 out of 4 points

In a sales-type lease

• Question 11

4 out of 4 points

A capital lease should be recorded in the lessee's accounts at the inception of the lease in an amount equal to

• Question 12

4 out of 4 points

On January 1, Lessor Company incorrectly recorded a sales-type lease as an operating lease. As a result of this error, the reported amount for Lessor Company's property, plant, and equipment leased to others is

• Question 13

4 out of 4 points

The authorized shares of capital stock is the number of shares

• Question 14

4 out of 4 points

Under the cost method of accounting for treasury stock transactions, when the proceeds from a sale are greater than the cost, the excess over cost is treated as a(n)

• Question 15

4 out of 4 points

The measurement date of an employee compensatory stock option plan under the intrinsic value method is

• Question 16

4 out of 4 points

Under the par value method of accounting for treasury stock, the treasury stock is reported on the balance sheet as a deduction from

• Question 17

4 out of 4 points

The corporate form of organization is important to the U.S. economy because

• Question 18

4 out of 4 points

Which of the following types of corporations is owned or operated by a government unit?

• Question 19

4 out of 4 points

Preferred stockholders share with common stockholders in any "extra" dividends when the preferred stock is

• Question 20

4 out of 4 points

Under the fair value method, the grant date is the date

• Question 21

4 out of 4 points

A noncompensatory stock option plan is designed to

• Question 22

4 out of 4 points

Dividends in arrears pertain to

• Question 23

4 out of 4 points

The preference to dividends that preferred stockholders have is

• Question 24

4 out of 4 points

When stock options are exercised by an employee under a compensatory stock option plan, the issuance of the common stock is recorded at the

• Question 25

4 out of 4 points

Which set of accounting principles directly uses the term "reserve"?

Part 2

• Question 1

4 out of 4 points

If the combined market value of trading securities at the end of the year is less than the market value of the same portfolio of trading securities at the beginning of the year, the difference should be accounted for by

• Question 2

4 out of 4 points

Consolidated financial statements are typically prepared when one company has

• Question 3

4 out of 4 points

U.S. GAAP and IFRS require firms to account for minority, active investments, using the _____ method.

• Question 4

4 out of 4 points

U.S. GAAP view investments of less than 20 percent of the voting stock of another company as

• Question 5

4 out of 4 points

Paula Company recognizes unrealized changes in the fair value of available-for-sale securities in

• Question 6

4 out of 4 points

U.S. GAAP and IFRS require firms to account for business combinations using the _____ method.

• Question 7

0 out of 4 points

Intercompany sales

• Question 8

4 out of 4 points

When an investor owns less than a majority of the voting stock of another corporation, the accountant must judge when the investor can exert significant influence. For the sake of uniformity, U.S. GAAP and IFRS presume that significant influence exists at ownership of _____ or more of the voting stock of the investee. (Assume that management does not have a contractual or other basis to demonstrate that influence.)

• Question 9

4 out of 4 points

Accountants sometimes refer to the equity method as a(n)

• Question 10

4 out of 4 points

Minority, passive investments are initially recorded at the

• Question 11

4 out of 4 points

U.S. GAAP view investments of between 20 and 50 percent of the voting stock of another company (unless evidence indicates that significant influence cannot be exercised) as

• Question 12

4 out of 4 points

Often, the parent does not own 100% of the voting stock of a consolidated subsidiary. The parent refers to the owners of the remaining shares of voting stock as a

• Question 13

0 out of 4 points

Which is the primary concern over the adoption of IFRS?

• Question 14

0 out of 4 points

Which is one of the FASB/IASB convergence projects?

• Question 15

4 out of 4 points

Which is one of the key activities that will lead to a company’s successful IFRS conversion?

• Question 16

0 out of 4 points

Which is one criterion of SMEs?

• Question 17

4 out of 4 points

Which of the following are differences between U.S. GAAP and IFRS?

• Question 18

4 out of 4 points

What is the appropriate reason why people object to adopting the roadmap?

• Question 19

4 out of 4 points

Which one is not a characteristic of rules-based standards?

• Question 20

4 out of 4 points

Which international organization began the movement toward international accounting standards?

• Question 21

4 out of 4 points

Which are two conditions that must be met before revenue is to be recognized under IFRS?

• Question 22

4 out of 4 points

What is the correct order of steps in applying the revenue recognition model?

(1) Identify the separate performance obligations in the contract

(2) Identify the contract with the customer

(3) Determine the transaction price for the entire contract

(4) Recognize revenue when each separate performance obligation is satisfied

(5) Allocate the transaction price to separate performance obligation

• Question 23

4 out of 4 points

What is the major difference between how U.S GAAP and IFRS handle share-based payments?

• Question 24

4 out of 4 points

When the revaluation results in an increase, a debit is made to the asset account, which account does the revaluation surplus go?

• Question 25

4 out of 4 points

Which of the following is included in full IFRS but eliminated for SMEs’ IFRS?