1) the financial accounting standards board
a.has issued a series of pronouncements entitled statements on auditing standards
b.was the forerunner of the current accounting principles board
c.is the arm of the securities and exchange commission responsible for setting financial
accounting standards
d.is appointed by the financial accounting foundation
2) on october 1, 2012, renfro co. purchased to hold to maturity, 2,000, $1,000, 9%
bonds for $1,980,000 which includes $30,000 accrued interest. the bonds, which mature
on february 1, 2021, pay interest semiannually on february 1 and august 1. renfro uses
the straight-line method of amortization. the bonds should be reported in the december
31, 2012 balance sheet at a carrying value of
a.$1,950,000
b.$1,951,500
c.$1,980,000
d.$1,980,500
3) on january 1, 2013, piper corp. purchased 40% of the voting common stock of betz,
inc. and appropriately accounts for its investment by the equity method. during 2013,
betz reported earnings of $540,000 and paid dividends of $180,000. piper assumes that
all of betz’s undistributed earnings will be distributed as dividends in future periods
when the enacted tax rate will be 30%. ignore the dividend-received deduction. piper’s
current enacted income tax rate is 25%. the increase in piper’s deferred income tax
liability for this temporary difference is
a.$108,000
b.$90,000
c.$64,800
d.$43,200
4) what is the general approach as to when product costs are recognized as expenses?
a.in the period when the expenses are paid
b.in the period when the expenses are incurred
c.in the period when the vendor invoice is received
d.in the period when the related revenue is recognized
5) when using a perpetual inventory system,
a.no purchases account is used
b.a cost of goods sold account is used
c.two entries are required to record a sale
d.all of these
6) which of the following are temporary differences that are normally classified as
expenses or losses that are deductible after they are recognized in financial income?
a.advance rental receipts
b.product warranty liabilities
c.depreciable property
d.fines and expenses resulting from a violation of law
7) keisler corporation reports:
what is keislers ending cash balance?
a.$270,000
b.$340,000
c.$490,000
d.$560,000
8) brown company’s account balances at december 31, 2012 for accounts receivable and
the related allowance for doubtful accounts are $920,000 debit and $1,400 credit,
respectively. from an aging of accounts receivable, it is estimated that $25,000 of the
december 31 receivables will be uncollectible. the necessary adjusting entry would
include a credit to the allowance account for
a.$25,000
b.$26,400
c.$23,600
d.$1,400
9) wellington corp. has outstanding accounts receivable totaling $5 million as of
december 31 and sales on credit during the year of $25 million. there is also a debit
balance of $20,000 in the allowance for doubtful accounts. if the company estimates
that 8% of its outstanding receivables will be uncollectible, what will be the balance in
the allowance for doubtful accounts after the year-end adjustment to record bad debt
expense?
a.$2,000,000
b.$ 380,000
c.$ 400,000
d.$ 420,000
10) land was purchased to be used as the site for the construction of a plant. a building
on the property was sold and removed by the buyer so that construction on the plant
could begin. the proceeds from the sale of the building should be
a.classified as other income
b.deducted from the cost of the land
c.netted against the costs to clear the land and expensed as incurred
d.netted against the costs to clear the land and amortized over the life of the plant
11) where must earnings per share be disclosed in the financial statements to satisfy
generally accepted accounting principles?
a.on the face of the statement of retained earnings (or, statement of stockholders’ equity)
b.in the footnotes to the financial statements
c.on the face of the income statement
d.either (a) or (c)