Archives: Quiz
Accounting Chapter 21 Operating activity, negative adjustment to net income
61 Listed below are the reporting classifications for a statement of cash flows using the direct method for reporting operating cash flows. Match the reporting classifications with the transactions described below. A) Cash collection of a nontrade note receivable. B) […]
Accounting Chapter 21 Freeman Company’s accounting records include the following
Copyright ©2018 McGraw-Hill 86) Freeman Company’s accounting records include the following information: Payments to suppliers $ 50,000 Collections on accounts receivable 90,000 Cash sales 20,000 Income taxes paid 5,000 Equipment purchased 15,000 What is the amount of net cash provided […]
Accounting Chapter 21 T accounts 2104 determine Cash Flows From Operating Activities
Copyright ©2018 McGraw-Hill 48) S Company reported net income for 2018 in the amount of $400,000. The company’s financial statements also included the following: Increase in accounts receivable $ 80,000 Decrease in inventory 60,000 Increase in accounts payable 200,000 Depreciation […]
Accounting Chapter 21 Determine cash Flows From Operating Activities The Indirect
Copyright ©2018 McGraw-Hill Intermediate Accounting, 9e (Spiceland) Chapter 21 The Statement of Cash Flows Revisited 1) Amounts held in cash equivalent investments must be reported separately from amounts held as cash in the statement of cash flows. Answer: FALSE Difficulty: […]
Accounting Chapter 20 Company’s Realized Periodic Income Required Us Generally accepted
Copyright ©2018 McGraw-Hill 61 Answer: 1. A change in depreciation method is considered a change in accounting estimate resulting from a change in accounting principle. In other words, a change in the depreciation method is similar to changing the economic […]
Accounting Chapter 20 Not Used For Changes Accounting Principle e Information
Copyright ©2018 McGraw-Hill 93) A broadcasting company failed to make a year-end accrual of $400,000 for fines due to a violation of FCC rules. Its tax rate is 30%. As a result of this error, net income was: A) Unaffected. […]
Accounting Chapter 20 Red Corp. constructed a machine at a total cost of
Copyright ©2018 McGraw-Hill 53) Red Corp. constructed a machine at a total cost of $70 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being […]
Accounting Chapter 20 All changes in estimate are accounted for
Copyright ©2018 McGraw-Hill Intermediate Accounting, 9e (Spiceland) Chapter 20 Accounting Changes and Error Corrections 1) Most, but not all, changes in accounting principle are reported using the retrospective approach. Answer: TRUE Difficulty: 1 Easy Topic: Distinguish retrospective and prospective Learning […]
Accounting Chapter 19 Blair Systems offers its employees a variety
Copyright ©2018 McGraw-Hill 214) Blair Systems offers its employees a variety of share-based compensation plans including stock options, stock appreciation rights, and restricted stock. The following is an excerpt from a disclosure note from Blair’s 2018 financial statements: Note 11 […]
Accounting Chapter 19 Common Shareholders Received Per Share Dividends after Preferred
Copyright ©2018 McGraw-Hill 202) On December 31, 2017, Vitners Company had outstanding 400,000 shares of common stock and 40,000 shares of 8% cumulative preferred stock (par $10). February 28, 2018, issued an additional 36,000 shares of common stock September 1, […]
Accounting Chapter 19 Mann Inc. offers a restricted stock award plan to its vice
101 ****Calculation of proceeds from unexpensed compensation: 30 million shares × $12 = $360 million total compensation to be expensed $90 million per year over 4 years. So, $270 million compensation (for 2019-2021) remains unexpensed and is considered part of […]
Accounting Chapter 19 Differentiate the effect on EPS of the sale of new shares
81 Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. A) Assumption used for options, rights, and warrants. B) Dual presentation of EPS […]
Accounting Chapter 19 A primary goal of earnings per share determination
Copyright ©2018 McGraw-Hill 115) A primary goal of earnings per share determination is: A) Conservatism. B) Comparability. C) Materiality. D) Objectivity. Answer: B Difficulty: 1 Easy Topic: Basic EPS—Calculation concepts Learning Objective: 19-04 Distinguish between a simple and a complex […]
Accounting Chapter 19 Blue Cab Company had 50,000 shares of common stock
Copyright ©2018 McGraw-Hill 80) During 2018, Falwell Inc. had 500,000 shares of common stock and 50,000 shares of 6% cumulative preferred stock outstanding. The preferred stock has a par value of $100 per share. Falwell did not declare or pay […]
Accounting Chapter 19 Angel Declared And Paid Cash Dividends 300000
Copyright ©2018 McGraw-Hill 39) Wilson Inc. developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2018, 20 million options were granted, each giving the executive owning them the right […]
Accounting Chapter 19 C explanation Award Contains Market Condition Such The
Copyright ©2018 McGraw-Hill Intermediate Accounting, 9e (Spiceland) Chapter 19 Share-Based Compensation and Earnings per Share 1) GAAP requires using intrinsic value accounting for employee stock options. Answer: FALSE Difficulty: 1 Easy Topic: Stock options Learning Objective: 19-02 Explain and implement […]
Accounting Chapter 18 The shareholders’ equity of Nick Co. includes the items
Copyright ©2018 McGraw-Hill 166) The shareholders’ equity of Nick Co. includes the items shown below. The board of directors of Nick declared cash dividends of $4 million, $8 million, and $50 million in each of its first 3 years of […]
Accounting Chapter 18 What was the average cost per share of the treasury stock
Copyright ©2018 McGraw-Hill 81 Answer: The average price was $12.75/share, $3,538 ÷ 279. Difficulty: 3 Hard Topic: Components of shareholders’ equity; Stock-Issuance of shares Learning Objective: 18-01 Describe the components of shareholders’ equity and explain how they are reported in […]
Accounting Chapter 18 Comprehensive Income And Aoci Retained Earnings Stock
Copyright ©2018 McGraw-Hill 116) Beasley Crossing prepares its financial statements in accordance with International Financial Reporting Standards (IFRS). The company issued shares of the company’s Class B stock. Beasley Crossing should report the stock in the company’s statement of financial […]
Accounting Chapter 18 Preferred shares that are participating may
Copyright ©2018 McGraw-Hill 79) Preferred shares that are participating may: A) Vote for the board of directors. B) Be exchanged for common stock. C) Receive extra cash during corporate liquidation. D) Receive additional dividends beyond the stated amount. Answer: D […]
Accounting Chapter 18 Shares Distributed 01 Million 300000 Shares retained Earnings
Copyright ©2018 McGraw-Hill 36) Accumulated other comprehensive income: A) is a liability. B) might include prior service cost from pension plan amendments. C) includes unrealized gains and losses on equity securities. D) is reported in the income statement. Answer: B […]
Accounting Chapter 18 Mandatorily redeemable preferred stock is reported
Chapter 18 Shareholders’ Equity True/False Questions 1. Mandatorily redeemable preferred stock is reported as a liability. Answer: True Level of Learning: 1 Easy Learning Objective: 18-03 Topic Area: Stock—Classes of shares Blooms: Remember AACSB: Reflective thinking AICPA: FN Measurement 2. […]
Accounting Chapter 17 PBO Items And Would Always Exist item Would
Copyright ©2018 McGraw-Hill 229) Rodeo Corporation amended its defined benefit pension plan on January 31, 2018, to increase retirement benefits earned with each service year. The actuary estimated the prior service cost to be $216,000. Rodeo’s 80 present employees are […]
Accounting Chapter 17 Teri Clark 35 She Washi red Bernard Five
121 212) The following is an incomplete pension spreadsheet for the current year for Desperado Corporation. ($ in millions) debit (credit) PBO Plan Assets Prior Service Cost Net (Gain) Loss Pension Expense Cash Net Pension (Liability)/Asset Beginning balance (500) 250 […]
Accounting Chapter 17 Carolina Consulting Company Has Defined Benefit
Copyright ©2018 McGraw-Hill 196) Waddle Company amended its defined benefit pension plan on January 1, 2018, to increase retirement benefits earned with each service year. The actuary estimated the prior service cost to be $216,000. Waddle’s 80 present employees are […]
Accounting Chapter 17 Describe How Pension Expense Composite Periodic Changes
Copyright ©2018 McGraw-Hill Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the most correct term. A) A shareholders’ equity account. B) Reduced by return on […]
Accounting Chapter 17 The Following Information Relates The Current Years
Copyright ©2018 McGraw-Hill 114) Oregon Co.’s employees are eligible for retirement with benefits at the end of the year in which both age 60 is attained and they have completed 35 years of service. The benefits provide 15 years reimbursement […]
Accounting Chapter 17 The actuary for Mongo at the end of 2018 increased
Copyright ©2018 McGraw-Hill 80) At December 31, 2017, Mongo, Inc., reported in its balance sheet a net loss of $3 million related to its pension plan. The actuary for Mongo at the end of 2018 increased her estimate of future […]
Accounting Chapter 17 delayed recognition of gains and losses in earnings
Copyright ©2018 McGraw-Hill 52) When accounting for pensions, delayed recognition of gains and losses in earnings achieves: A) Income averaging. B) Expense averaging. C) Income optimization. D) Income smoothing. Answer: D Difficulty: 1 Easy Topic: Pension expense ‒ Net loss […]
Accounting Chapter 17 An upward revision of inflation and compensation trends
Copyright ©2018 McGraw-Hill Intermediate Accounting, 9e (Spiceland) Chapter 17 Pensions and Other Postretirement Benefits 1) The projected benefit obligation may be less reliable than the accumulated benefit obligation. Answer: TRUE Difficulty: 1 Easy Topic: Pension obligation ‒ ABO‒Vested‒PBO Learning Objective: […]
Accounting Chapter 16 How Are future Deductible Amounts Recognized The Financial
95 163) Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION 1 2 Taxable income $40,000 $80,000 Amounts at year-end: Future deductible amounts 5,000 10,000 Future taxable amounts 0 […]
Accounting Chapter 16 December 312017 When The Tax Rate Was
Copyright ©2018 McGraw-Hill 150) Gore Company, organized on January 2, 2018, had pretax accounting income of $7,000,000 and taxable income of $10,000,000 for the year ended December 31, 2018. The 2018 tax rate was 40%. The only difference between book […]
Accounting Chapter 16 Information for Hobson Corp. for the current year
Copyright ©2018 McGraw-Hill 111) Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before tax $ 150 Loss on discontinued operation (pretax) 30 Temporary differences (all related to operating income): Accrued warranty expense in […]
Accounting Chapter 16 The tax effect of a net operating loss (NOL) carryback
Copyright ©2018 McGraw-Hill 83) The tax effect of a net operating loss (NOL) carryback usually: A) Results in a current receivable at the end of the NOL year. B) Is subject to a valuation allowance. C) Is reflected as deferred […]
Accounting Chapter 16 Woody Corp. had taxable income of $8,000 in the current
Copyright ©2018 McGraw-Hill 41) Woody Corp. had taxable income of $8,000 in the current year. The amount of MACRS depreciation was $3,000, while the amount of depreciation reported in the income statement was $1,000. Assuming no other differences between tax […]
Accounting Chapter 16 A temporary difference originates in one period
Chapter 16 Accounting for Income Taxes True/False Questions 1. A temporary difference originates in one period and reverses, or turns around, in one or more later periods. Answer: True Level of Learning: 1 Easy Learning Objective: 16-01 Topic Area: Temporary […]
Accounting Chapter 15 Terms Lease Agreement And Related Facts
212 306) Terms of a lease agreement and related facts are: a. Leased asset has a retail cash selling price of $200,000. Its useful life is six years. b. Annual lease payments at the beginning of each year are $41,746, […]
Accounting Chapter 15 January 2018 Lease Receivable 750654 Cost Goods
201 301) On January 1, 2018, Tennessee Valley Corporation (TVC) leased equipment from Great Lakes Leasing under a finance lease. Lease payments are made annually. Title does not transfer to the lessee and there is no purchase option or guarantee […]
Accounting Chapter 15 Osiris December 31 2018 Related The Lease
181 287) At January 1, 2018, Gem Finder leased mining equipment from Emerald Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $75,000 beginning January 1, 2018, the beginning of the lease, and at each December […]
Accounting Chapter 15 Show how Davis Computing determined the $7,500 quarterly
Copyright ©2018 McGraw-Hill 161 Answer: January 1, 2018 Lease receivable (fair value) 56,040 Equipment (lessor’s cost) 56,040 Cash (lease payment) 7,500 Lease receivable 7,500 No depreciation April 1, 2018 Cash (lease payment) 7,500 Lease receivable (difference) 6,529 Interest revenue (2% […]
Accounting Chapter 15 Omega leased a machine for a ten-year non-cancelable
141 256) Omega leased a machine for a ten-year non-cancelable term. At the end of the ten-year term, Omega has five consecutive one-year renewal options. A replacement machine can be acquired at the end of the term for the leased […]
Accounting Chapter 15 Objective 1502 Describe And Demonstrate How The
Copyright ©2018 McGraw-Hill 217) On January 1, Sepe Vineyard Supply leased a truck for a five-year period, at which time possession of the truck will revert back to the lessor. Annual lease payments are $11,000 due on December 31 of […]
Accounting Chapter 15 This is Accomplished Recording Interest The Normal Way
Copyright ©2018 McGraw-Hill 184) Big Bucks leased equipment to Shannon Company on July 1, 2018. The lease payments were calculated to provide the lessor a 10% return. Ten annual lease payments of $36,000 are due each July 1, beginning July […]
Accounting Chapter 15 For This Lease A The Lease Payment
Chapter 15 Leases Intermediate Accounting, Eighth Edition, Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 15–61 130. On June 30, 2016, Blue, Inc., leased equipment from Big Leasing […]
Accounting Chapter 15 Each of the independent situations below describes a finance
61 Answers: 138) L 139) I 140) J 141) A 142) H 143) E 144) N 145) O 146) C 147) D 148) M 149) B 150) F 151) G 152) K 153) Each of the independent situations below describes […]
Accounting Chapter 15 the portion of the annual lease payment that represents
Copyright ©2018 McGraw-Hill 85) B Corp. is a lessee and has a debt/equity ratio of 2 to 1. The debt/equity ratio is increased when B records: A Finance Lease An Operating Lease a. yes yes b. no no c. yes […]
Accounting Chapter 15 What is the outstanding balance after payment 9
Copyright ©2018 McGraw-Hill 46) What is the outstanding balance after payment 9? A) $8,929. B) $13,463. C) $5,000. D) $5,537. Answer: A Explanation: Step 1 Interest = 12% × $16,901 = $2,028 Step 2 Decrease in balance = $10,000 − […]
Accounting Chapter 15 a lessee’s debt to equity ratio and rate
Copyright ©2018 McGraw-Hill Intermediate Accounting, 9e (Spiceland) Chapter 15 Leases 1) At the beginning of a lease agreement, a lessee’s debt to equity ratio and rate of return on assets are both affected regardless of whether the lease is classified […]
Accounting Chapter 14 Show Calculations4 Beach Follows GAAP How Would
138 240) On May 1, 2018, Green Corporation issued $1,000,000 of 12% bonds, dated January 1, 2018, for $975,000 plus accrued interest. The bonds mature on December 31, 2032, and pay interest semiannually on June 30 and December 31. Green’s […]
Accounting Chapter 14 Health Foods stock The End The 2018 Fiscal
121 224) Holly Springs, Inc. contracted with Coldwater Corporation to have constructed a custom- made lathe. The machine was completed and ready for use on January 1, 2018. Holly Springs paid for the lathe by issuing a $300,000 note due […]