1) the most significant current source of generally accepted accounting principles is the
a.aicpa
b.sec
c.apb
d.fasb
2) elton industries, a company who uses ifrs reporting standards, has assets and
liabilities of a disposal group classified as held-for-sale shown on its statement of
financial position. which of the following presents the best treatment for these?
a.these assets and liabilities should be netted and presented as a single amount – either a
current asset or a current liability on the statement of financial position
b.on the balance sheet, the disposal group assets should be shown separately from other
assets, while the disposal group liabilities should be shown separately from other
liabilities
c.the assets and liabilities should be netted and presented as a deduction from equity on
the statement of financial position
d.there should be no separate disclosure of these assets and liabilities on the statement
of financial position
3) what interest rate (the nearest percent) must charlie earn on a $150,000 investment
today so that he will have $380,000 after 12 years?
a.6%
b.7%
c.8%
d.9%
4) presented below are data for bandkok corp.
stockholders’ equity at january 1, 2013 is
a.$3,332
b.$2,160
c.$2,360
d.$3,440
5) on december 1, 2012, abel corporation exchanged 30,000 shares of its $10 par value
common stock held in treasury for a used machine. the treasury shares were acquired by
abel at a cost of $40 per share, and are accounted for under the cost method. on the date
of the exchange, the common stock had a fair value of $55 per share (the shares were
originally issued at $30 per share). as a result of this exchange, abel’s total stockholders’
equity will increase by
a.$300,000
b.$1,200,000
c.$1,650,000
d.$1,350,000
6) accrued liabilities are disclosed in financial statements by
a.a footnote to the statements
b.showing the amount among the liabilities but not extending it to the liability total
c.an appropriation of retained earnings
d.appropriately classifying them as regular liabilities in the balance sheet
7) the ifrs statement of recognized income and expenses
a.does not recognize charges to equity such as revaluation surplus values
b.is a required report under ifrs reporting requirements
c.reports the items that were charged directly to equity such as revaluation surplus
d.is similar to the u.s. gaap income statement in that it only reports revenues and
expenses of the period
8) an analysis of stockholders’ equity of hahn corporation as of january 1, 2012, is as
follows:
hahn uses the cost method of accounting for treasury stock and during 2012 entered into
the following transactions:
acquired 2,500 shares of its stock for $75,000.
sold 2,000 treasury shares at $35 per share.
sold the remaining treasury shares at $20 per share.
assuming no other equity transactions occurred during 2012, what should hahn report at
december 31, 2012, as total additional paid-in capital?
a.$695,000
b.$700,000
c.$705,000
d.$715,000
9) what is meant by consistency when discussing financial accounting information?
a.information that is measured and reported in a similar fashion across points in time
b.information is timely
c.information is measured similarly across the industry
d.information is verifiable
10) at ruth company, events and transactions during 2012 included the following. the
tax rate for all items is 30%.
(1)depreciation for 2010 was found to be understated by $60,000.
(2)a strike by the employees of a supplier resulted in a loss of $50,000.
(3)the inventory at december 31, 2010 was overstated by $80,000.
(4)a flood destroyed a building that had a book value of $1,000,000. floods are very
uncommon in that area.
the effect of these events and transactions on 2012 income from continuing operations
net of tax would be
a.($35,000)
b.($77,000)
c.($133,000)
d.($833,000)
11) chang corporation issued $6,000,000 of 9%, ten-year convertible bonds on july 1,
2012 at 96.1 plus accrued interest. the bonds were dated april 1, 2010 with interest
payable april 1 and october 1. bond discount is amortized semiannually on a
straight-line basis. on april 1, 2013, $1,200,000 of these bonds were converted into 500
shares of $20 par value common stock. accrued interest was paid in cash at the time of
conversion.
what was the effective interest rate on the bonds when they were issued?
a.9%
b.above 9%
c.below 9%
d.cannot determine from the information given
12) an increase in inventory balance would be reported in a statement of cash flows
using the indirect method (reconciliation method) as a(n)
a.addition to net income in arriving at net cash flow from operating activities
b.deduction from net income in arriving at net cash flow from operating activities
c.cash outflow from investing activities
d.cash outflow from financing activities
13) which of the following assets do not qualify for capitalization of interest costs
incurred during construction of the assets?
a.assets under construction for an enterprise’s own use
b.assets intended for sale or lease that are produced as discrete projects
c.assets financed through the issuance of long-term debt
d.assets not currently undergoing the activities necessary to prepare them for their
intended use