1) the passage of a new fasb standards statement requires the support of
a.all board members
b.three board members
c.four board members
d.five board members
2) which of the following is an acceptable method of presenting the income statement?
a.a single-step income statement
b.a multiple-step income statement
c.a consolidated statement of income
d.all of these
3) franco company uses ifrs and owns property, plant and equipment with a historical
cost of 5,000,000 euros. at december 31, 2011, the company reported a valuation
reserve of
8,365,000 euros. at december 31, 2012, the property, plant and equipment was
appraised at
5,325,000 euros.
the valuation reserve at december 31, 2012 will be reported at
a.8,040,000 euros on the statement of stockholders’ equity
b.8,365,000 euros in the assets section of the balance sheet
c.8,690,000 euros in the stockholders’ equity section of the balance sheet
d.325,000 euros on the income statement
4) hite co. was formed on january 2, 2012, to sell a single product. over a two-year
period, hite’s acquisition costs have increased steadily. physical quantities held in
inventory were equal to three months’ sales at december 31, 2012, and zero at december
31, 2013. assuming the periodic inventory system, the inventory cost method which
reports the highest amount of each of the following is
5) working capital is
a.capital which has been reinvested in the business
b.unappropriated retained earnings
c.cash and receivables less current liabilities
d.none of these
6) a generally accepted account title is
a.prepaid revenue
b.appropriation for contingencies
cearned surplus
d.reserve for doubtful accounts
7) simpson company applies revaluation accounting to plant assets with a carrying
value of $1,600,000, a useful life of 4 years, and no salvage value. depreciation is
calculated on the straight-line basis. at the end of year 1, independent appraisers
determine that the asset has a fair value of $1,500,000.
the financial statements for year one will include the following information
a.accumulated depreciation $400,000
b.depreciation expense $100,000
c.plant assets $1,500,000
d.revaluation surplus $100,000
8) wilson co. purchased land as a factory site for $800,000. wilson paid $80,000 to tear
down two buildings on the land. salvage was sold for $5,400. legal fees of $3,480 were
paid for title investigation and making the purchase. architect’s fees were $31,200. title
insurance cost $2,400, and liability insurance during construction cost $2,600.
excavation cost $10,440. the contractor was paid $2,500,000. an assessment made by
the city for pavement was $6,400. interest costs during construction were $170,000.
the cost of the building that should be recorded by wilson co. is
a.$2,503,800
b.$2,504,840
c.$2,513,200
d.$2,514,240
9) for the year ended december 31, 2012, transformers inc. reported the following:
what would transformers report as total stockholders’ equity?
a.$344,000
b.$336,000
c.$256,000
d.$240,000
10) the following data concerning the retail inventory method are taken from the
financial records of welch company.
assuming no change in the price level if the lifo inventory method were used in
conjunction with the data, the ending inventory at cost would be
a.$85,200
b.$84,000
c.$81,600
d.$86,400
11) hardin company received $60,000 in cash and a used computer with a fair value of
$180,000 from page corporation for hardin company’s existing computer having a fair
value of $240,000 and an undepreciated cost of $225,000 recorded on its books. the
transaction has no commercial substance. how much gain should hardin recognize on
this exchange, and at what amount should the acquired computer be recorded,
respectively?
a.$0 and $165,000
b.$1,153 and $166,153
c.$15,000 and $180,000
d.$60,000 and $225,000
12) when should an expenditure be recorded as an asset rather than an expense?
a.never
b.always
c.if the amount is material
d.when future benefit exits
13) the following data are provided:
additional information:
on may 1, 2013, 7,000 shares of common stock were issued. the preferred dividends
were not declared during 2013. the market price of the common stock was $50 at
december 31, 2013.
the rate of return on common stock equity for 2013 is
a.70 420.
b.70 480.
c.60 420.
d.60 480.