Archives: Quiz

1) A firm purchased $35,000 worth of investments classified as securities available for sale. At the end of the year, the investments were worth $23,000. What is the correct presentation of these events in the statement of cash flows prepared […]

1) When gains or losses on derivatives designated as fair value hedges exceed the gains or losses on the item being hedged, the excess a. affects reported net income b. is recognized as an equity adjustment c. is recognized as […]

1) Merchandise shipped FOB shipping point on the last day of the year should ordinarily be included in a. the buyer’s inventory balance b. the seller’s inventory balance c. neither the buyer’s nor seller’s inventory balance d. both the buyer’s […]

1) When the interest payment dates of a bond are May 1 and November 1, and the bond is issued on June 1, the amount of interest expense at December 31 of the year of issuance would be for a. […]

1) Daniels Company entered into a direct-financing lease with Old 7 Corporation, which called for seven annual rentals of $3,500 at an interest rate of 12 percent. The payments are to be paid at the end of each year. The […]

1) Which of the following is not classified as a cash outflow from operating activities? a. Cash payments to creditors for interest b. Cash payments to stockholders for dividends c. Cash payments to employees for services rendered d. Cash payments […]

1) On January 17, 2014, an explosion occurred at an Boondocks Fireworks plant causing extensive property damage to area buildings. Although no claims had yet been asserted against Boondocks by March 10, 2014, Boondocks’ management and counsel concluded that it […]

1) A debit balance in the account Market Adjustment–Available-for-Sale Securities at the end of a year should be interpreted as the net a. unrealized holding gain for that year b. realized holding gain for that year c. unrealized holding gain […]

1) Which of the following typically involves the use of non-GAAP accounting? a. Strategic matching b. A change in accounting estimate that is fully disclosed c. Proforma earnings d. A change in accounting principle that is fully disclosed 2) Allure […]

1) Waller Corporation had the following account balances for 2014: Wallers 2014 net income is $450,000. What amount should Waller include as net cash provided by operating activities in its 2014 statement of cash flows? a. $436,200 b. $445,200 c. […]

1) Which of the following statements concerning guaranteed residual values is appropriate for the lessee? a. The asset and related liability should be increased by the amount of the residual value b. The asset and related liability should be decreased […]

1) On January 2, 2009, Portier Enterprises issued $2,400,000 of 8 percent, 15-year semiannual coupon bonds to yield 7.5 percent. Each bond is convertible into 40 shares of $15 par common stock, which was trading at $20 per share on […]

1) “Purchased in-process research and development” is typically associated with a. creative acquisition accounting b. cookie jar reserves c. proforma earnings amounts d. big bath accounting 2) Callable bonds a. can be redeemed by the issuer at some time at […]

1) An example of direct matching of an expense with revenues would be a. depreciation expense b. office salaries expense c. direct labor costs incurred to produce inventory sold during a period d. advertising expense 2) Astor Construction Company uses […]

1) The following independent events occurred after the balance sheet date of December 31, 2014, but before the issuance of the balance sheet on March 1, 2015, of Polo Grounds Company: a. A loss on an account receivable was recorded […]

1) On January 1, 2014, Amber Inc. purchased 30 percent of the outstanding common stock of Collar Corporation for $516,000 cash. Amber is accounting for this investment using the equity method. On the date of acquisition, the fair value of […]

1) Which of the following items is reported only in current and future periods? a. Prior period adjustment b. Change in accounting principle c. Change in estimate d. Effects of changing prices 2) Which of the following should NOT be […]

1) Excluding some revenues, expenses, gains, losses from the earnings figure calculated using generally accepted accounting principles is an example of a. income smoothing b. “big bath” accounting c. a “cookie jar” reserve d. proforma earnings 2) On September 1, […]

1) A routine collection on a customer’s account was recorded and posted as a debit to Cash and a credit to Sales Revenue. The journal entry to correct this error would be a. a debit to Sales Revenue and a […]

1) The staff interpretations statements issued by the SEC are called: a. Staff Accounting Research Bulletins b. Statements on Accounting Principles c. Financial Accounting Standards d. Staff Accounting Bulletins 2) In a business combination, goodwill is defined as the excess […]

1) An earthquake destroyed the home office building of a company located in an inland city. This should be reported as a(n) a. extraordinary loss b. prior period adjustment c. loss from continuing operations d. loss from discontinued operations 2) […]

1) Lawson Corporation’s checkbook balance on December 31, 2014, was $8,000. In addition, Lawson held the following items in its safe on December 31: The proper amount to be shown as cash on Lawsons balance sheet at December 31, 2014, […]

1) At December 31, 2013, DeSoto Company had 500,000 shares of common stock outstanding. DeSoto sold 50,000 shares on October 1, 2014. Net income for 2014 was $2,417,875; the income tax rate was 30%. In addition, DeSoto had the following […]

1) In a lease that is recorded as an operating lease by the lessee, the equal monthly rental payments should be a. allocated between interest expense and depreciation expense b. allocated between a reduction of the liability for leased assets […]

1) The primary purpose of the Securities and Exchange Commission is to a. regulate the issuance and trading of securities b. issue accounting and auditing regulations for publicly held companies c. prevent the trading of speculative securities d. enforce generally […]

1) Which of the following is NOT correct regarding the rate of return on assets? a. The rate of return on assets measures managements ability to productively employ all its resources b. The rate of return on assets measures the […]

1) The data shown below represent the complete taxable income history for Confederacy Corporation. The tax rate was 35% throughout the entire period 2008 through 2015: If the company always chooses the carryback, carryforward option, what is the tax liability […]

1) Cash inflows from investing result from a. decreases in liabilities b. increases in liabilities c. decreases in noncash assets d. increases in noncash assets 2) Which of the following is not a component of the DuPont Framework? a. Return […]

1) Starship Corporation incurred the following losses during 2014: Ignoring income taxes, what amount of loss should Starship report as extraordinary on its annual income statement? a. $100,000 b. $520,000 c. $270,000 d. $150,000 2) Citrus Inc. declared and paid […]

1) Which of the following features of preferred stock would most likely be opposed by common shareholders? a. Par or stated value b. Participating c. Redeemable d. Callable 2) Stock warrants outstanding should be classified as a. liabilities b. reductions […]

1) Garden Company had pretax accounting income of $24,000 during 2014. Garden’s only temporary difference for 2011 relates to a sale made in 2012 and recognized for accounting purposes at that time. However, Garden uses the installment sales method of […]

1) Broham Manufacturing Company purchased a machine on January 2, 2014. The invoice price of the machine was $40,000, and the vendor offered a 2 percent discount for payment within ten days. The following additional costs were incurred in connection […]

1) Under international accounting standards, cash received from interest (associated with interest revenue) can be shown on the statement of cash flows as an a. operating activity only b. operating or financing activity c. operating or investing activity d. investing […]

1) The United States Securities and Exchange Commission a. has recognized IASB standards as an acceptable alternative to U.S. GAAP b. requires foreign companies listing their shares on U.S. stock exchanges to restate their financial statements to U.S. GAAP c. […]

1) The effective interest rate on bonds is lower than the stated rate when bonds sell a. above face value b. at maturity value c. below face value d. at face value 2) Sailor Construction Company has consistently used the […]

1) In 2011, Huxley Corp. began construction work under a three-year contract. The contract price is $800,000. Huxley used the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of costs […]

1) Robinson Company reported a net loss of $23,000 during the year. Comparing beginning and ending balances, you determine the following: (1) accounts receivable increased by $8,000; and (2) accrued expenses payable increased by $5,000. What was the amount of […]

1) Which of the following is correct regarding the effect that dilutive convertible bonds have on the earnings per share computation? a. The number of shares the bonds would convert to is added to the denominator; interest, net of tax, […]

1) A depreciable asset has an estimated 15 percent salvage value. At the end of its estimated useful life, the accumulated depreciation would equal the original cost of the asset under which of the following depreciation methods? Productive- Sum-of-the- Double- […]

1) According to Anderson and Aday, which of the following is an element of realized access? a. Enabling characteristics b. Type, site, and purpose of health services c. Distribution of health care services according to the patients self-perceived need d. […]

1) The wellness model is built on which of the following: a. Intervention b. Adequate public health and social services c. Understanding risk factors d. All of the above 2) Supply-side rationing. a.Curtailment in governing funding for medical research b.Managed […]

1) There is an imbalance between primary and specialty care services in the U.S. health care delivery system. 2) Given the aging of the population, training in geriatrics is on the rise among physicians and nurses. Answer: FALSE 3) Secondary […]

1) Men report more chronic illness than women. 2) Moral hazard has to do with insured patients demand for health care services. Answer: TRUE 3) Disease management is highly individualized. Answer: FALSE 4) Medicare will not meet the growing need […]

1) Rural areas are particularly good places for managed care implementation. 2) Currently, the states role in health policy is limited mostly to basic public health functions. Answer: FALSE 3) Middle-class Americans have historically opposed proposals for a national health […]

1) Since 1975, the rates of change in medical inflation have remained consistently and continuously above the rates of change in the CPI. 2) Under the medical model, health is defined as a complete state of physical, mental, and social […]

1) Registered nurses undergo the same training as licensed practical nurses. 2) Americans generally demonstrate a high degree of agreement on major health policy issues. Answer: FALSE 3) The uninsured consist mostly of adults under age 65 . Answer: TRUE […]

1) In the preindustrial period, Europe was more advanced than the US in medical science. 2) Thanks to technology, HIV/AIDS has become a chronic disease. Answer: TRUE 3) All states require assisted living facilities to be licensed by the state. […]

1) American beliefs and values favor the development and use of new medical technology despite its cost. 2) Historically, outpatient care has been independent from services provided in health care institutions. Answer: TRUE 3) Many developed nations have been able […]

1) The main objective of the ACA is to restructure the way health care is delivered in the US. 2) Delivery of health care with a central focus on specialization cannot maximize health. Answer: TRUE 3) Availability of qualified workforce […]

1) Prevention and lifestyle behavior changes to promote health are not major foci of the medical model. 2) By understanding the forces of future change one can accurately predict the future of health care in the United States. Answer: FALSE […]