Archives: Quiz

Pursuing an inorganic growth strategy, Wilson Company acquired Venus Company’s net assets and assigned them to four separate reporting divisions. Wilson assigned total goodwill of $134,000 to the four reporting divisions as given below: Based on the preceding information, what […]

ASC 958 requires that an “other not-for-profit entity” (ONPO) provide three financial statements. Which of the following is NOT one among them? A. A statement of functional expenses B. A statement of financial position C. A statement of activities D. […]

In a statement of revenues, expenditures, and changes in fund balance, the unassigned fund balance will be increased by: I. a decrease in the fund balance—Nonspendable II. an excess of other financing sources over other financing uses. A. I only […]

The APB partnership agreement specifies that partnership net income be allocated as follows: Average capital balances for the current year were $50,000 for A, $30,000 for P, and $20,000 for B. Refer to the information given. Assuming a current year […]

Sub Company sells all its output at 20 percent above cost to Par Corporation. Par purchases its entire inventory from Sub. The incomes reported by the companies over the past three years are as follows: Sub Company sold inventory for […]

Suppose the direct foreign exchange rates in U.S. dollars are as follows: 1 Swiss franc = $1.0371 1 Swedish krona = $0.1526 Based on the information given above, how many Swiss francs are required to purchase goods costing $5,000 U.S.? […]

The trial balance of WM Partnership is as follows: Wilfred and Mike decide to incorporate their partnership. The partnership’s books will be closed, and new books will be used for W & M Corporation. The following additional information is available: […]

Senior Corporation acquired 80 percent of Junior Company’s voting shares on January 1, 20X8, at underlying book value. On Dec. 31, 20X8, it also purchased $500,000 par value 8 percent Junior bonds, which had been issued on January 1, 20X5 […]

Wright Company recently petitioned for bankruptcy and is now in the process of preparing a statement of affairs. The carrying values and estimated fair values of the assets of Wright Company are as follows: Carrying Value Fair Value Cash $10,000 […]

ABC Corporation owns 75 percent of XYZ Company’s voting shares. During 20X8, ABC produced 50,000 chairs at a cost of $79 each and sold 35,000 chairs to XYZ for $90 each. XYZ sold 18,000 of the chairs to unaffiliated companies […]

On September 1, 20X1, Brady Corp. entered into a foreign exchange contract for speculative purposes by purchasing 50,000 deutsche marks for delivery in 60 days. The rates to exchange $1 for 1 deutsche mark follow: 9/1/20X1 9/30/20X1 Spot-rate 0.75 0.70 […]

A not-for-profit private college in Virginia created a separate foundation responsible for obtaining financial support from alumni and others. Foundation assets are used for the benefit of the college. Donations made to the foundation and subsequently transferred to the college […]

Patch Corporation purchased land from Sub1 Corporation for $350,000 on December 3, 20X5. This purchase followed a series of transactions between Patch-controlled subsidiaries. On January 23, 20X5, Sub3 Corporation purchased the land from a nonaffiliate for $240,000. It sold the […]

Burrough Corporation paid $80,000 to acquire all of Helyar Company’s net assets. Helyar reported assets with a book value of $60,000 and fair value of $98,000 and liabilities with a book value and fair value of $23,000 on the date […]

A private university offers graduate assistantships to qualified students each year. In exchange for the waiver of tuition, graduate assistants are required to assist faculty members with research and other activities. Assume a graduate assistant received a $4,000 tuition waiver […]

Plummet Corporation reported the book value of its net assets at $400,000 when Zenith Corporation acquired 100 percent ownership. The fair value of Plummet’s net assets was determined to be $510,000 on that date. Based on the preceding information, what […]

In accounting for governmental funds, which of the following items could appear only on government-wide financial statements? A. I only B. I and II C. I and III D. I, II, III On January 1, 20X6, Polka Co. (Polka) and […]

Wally Corporation acquired 70 percent of the common shares and 60 percent of the preferred shares of Safety Corporation at underlying book value on January 1, 20X6. At that date, the fair value of the noncontrolling interest in Safety’s common […]

Riviera Township reported the following data for its governmental activities for the year ended June 30, 20X9: Additional information available is as follows: All of the long-term debt was used to acquire capital assets. Cash of $475,000 is restricted for […]

A private, not-for-profit hospital received a contribution of $40,000 on June 15, 20X8. The donor restricted the contribution to funding research activities currently being performed by the hospital. For the year ended December 31, 20X8, the hospital spent $30,000 of […]

The general fund of the Town of Dean levied property taxes of $3,000,000 for the fiscal year beginning on January 1, 20X8. It was estimated that 1% of the levy would be uncollectible. During the period January 1, 20X8, through […]

Janet Corporation holds 75 percent of Slider Corporation’s voting common stock, acquired at book value. The fair value of the noncontrolling interest at the date of acquisition was equal to 25 percent of the book value of Slider Corporation. On […]

Collins Company reported consolidated revenue of $120,000,000 in 20X8. Collins operates in two geographic areas, domestic and Asia. The following information pertains to these two areas: What calculation below is correct to determine if the revenue test is satisfied for […]

On the statement of operations prepared for a private, not-for-profit hospital, patient service revenue earned during the year is reported net of amounts for which of the following items? I. Contractual adjustments II. Bad debts expense A. I only B. […]

On the statement of functional expenses prepared for a voluntary health and welfare organization, depreciation expense is allocated to I. expenses for program services. II. expenses for supporting services. A. I only B. II only C. Both I and II […]

If the functional currency is the local currency of a foreign subsidiary, what exchange rates should be used to translate the items below, assuming the foreign subsidiary is in a country which has not experienced hyperinflation over three years? A. […]

ABC, a holder of a $400,000 XYZ Inc. bond, collected the interest due on June 30, 20X8, and then sold the bond to DEF Inc. for $365,000. On that date the bond issuer, XYZ, a 90 percent owner of DEF, […]

The transactions listed in the following questions occurred in a private, not-for-profit hospital during 20X8. For each transaction, indicate its effect on the hospital’s statement of operations for the year ended December 31, 20X8. Transaction: The governing board designated assets […]

Which financial statement is (are) required for a voluntary health and welfare organization which is not required for a private, not-for-profit hospital? I. A statement of operations. II. A statement of functional expenses. A. I only B. II only C. […]

On January 1, 20X8, William Company acquired 30 percent of eGate Company’s common stock, at underlying book value of $100,000. eGate has 100,000 shares of $2 par value, 5 percent cumulative preferred stock outstanding. No dividends are in arrears. eGate […]

During the fiscal year ended June 30, 20X9, the city of Moorhead constructed a new courthouse which was budgeted to cost $5,000,000. Moorhead used a capital projects fund to account for the construction activities. In July of 20X8, a bid […]

During its inception, Devon Company purchased land for $100,000 and a building for $180,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 15,000 shares of Regan’s […]

Suppose the direct foreign exchange rates in U.S. dollars are: 1 Singapore dollar = $0.7025 1 Cyprus pound = $2.5132 Based on the information given above, how many Singapore dollars are required to purchase goods costing 10,000 US dollars? A. […]

In accordance with the Single Audit Act of 1984, external auditors issue the standard audit report on the governmental unit’s financial statements and must also issue: I. a special report on the effectiveness with which the governmental unit is achieving […]

The primary function of external auditors is to: A. Express an opinion on the fairness of the company’s financial statements. B. Determine the accuracy of the management reports. C. Evaluate the efficiency of operations and the degree of compliance with […]

Direct labor costs in a paint factory would include wages of employees who: A. Supervise heavy equipment operators. B. Operate paint-mixing machines. C. Develop highly secret formulas for new products. D. Paint the interior of the factory every two years. […]

Effective internal control over accounts receivable ensures: A. That credit is only extended to customers that meet the company’s credit standards. B. That an approved factor is used when the company sells its accounts receivable. C. There is an accurate […]

The price at which a bond sells is equal to the: A. Maturity value of the bonds plus the present value to investors of the future interest payments. B. Sum of the future interest payments, minus the maturity value of […]

The Cash account in the ledger of Hensley, Inc. showed a balance of $3,100 at June 30. The bank statement, however, showed a balance of $3,900 at the same date. The only reconciling items consisted of a $700 deposit in […]

The primary objective of activity-based management is: A. To develop more accurate product costs. B. To reduce and eliminate non-value added activities. C. To increase product quality. D. To identify instances of internal failure. Which of the following items on […]

A worksheet consists of all of the following except: A. A trial balance. B. Adjusting entries. C. An adjusted trial balance. D. Transaction entries. If unit sales prices are $7 and variable costs are $5 per unit, how many units […]

Which of the following is not classified among the operating activities in a statement of cash flows? A. Payment of interest on a bank loan. B. Payment of the principal amount owed on a bank loan. C. Payment of an […]

Which of the following is a value-added activity by a manufacturer of chocolate candies? A. The addition of chocolate syrup into the candy mix. B. Hiring production workers. C. Storing the candy bars until they are distributed to stores. D. […]

During its first year of operations, Brown Company incurred the following product costs: Direct materials used in production $200,000 Direct labor $175,000 Manufacturing overhead $145,500 Brown Company’s ending Work in Process Inventory amounted to $35,000 at the end of the […]

The journal entry when a dividend is declared for $150,000 would be: A. A Above. B. B Above. C. C Above. D. D Above. San Francisco’s famous St. Francis Hotel is owned by Westin Hotel and Resort Group. Westin should […]

Which of the following is not a right of stockholders? A. To vote for directors and on key issues. B. To participate in dividends declared. C. To share in the distribution of assets if the corporation is liquidated. D. To […]

Anthony Driver wants to buy a new car in 4 years. He knows that he can earn 6% interest compounded semi-annually. How much must he deposit now in order to have $26,000 at the end of 4 years? A. $21,390.20. […]

In a statement of cash flows, payments of dividends are classified as: A. Operating activities. B. Financing activities. C. Investing activities. D. Costs and Expenses. Hoffman, Inc. adjusts its books each month but closes its books at the end of […]

Refer to the information above. Summit has learned that a competitor plans to introduce a similar widget at a price of $80. In response, Summit may reduce its selling price to $80. If Summit requires a 25% return on sales, […]

BT&T Corporation manufactures telephones. Recently, the company produced a batch of 600 defective telephones at a cost of $9,000. BT&T can sell these telephones as scrap for $9 each. It can also rework the entire batch at a cost of […]