1) in reporting discontinued operations, the income statement should show in a special
section
1>gains on the disposal of a discontinued component.
2>losses on the disposal of a discontinued component.
a.1 only
b.2 only
c.neither 1 nor 2
d.both 1 and 2
2) as an incentive for customers to pay their accounts promptly, a business may offer its
customers
a.a sales discount
b.free delivery
c.a sales allowance
d.a sales return
3) which receivables accounting and reporting issue is essentially the same for ifrs and
gaap?
a.the use of allowance accounts and the allowance method
b.how to record discounts
c.how to record factoring
d.all of the above are essentially the same for ifrs and gaap
4) long-term creditors are usually most interested in evaluating
a.liquidity
b.marketability
c.profitability
d.solvency
5) given the following adjusted trial balance:
net income for the year is:
a.$49
b.$135
c.$162
d.$248
6) hunt company had $250,000 of current assets and $90,000 of current liabilities
before borrowing $60,000 from the bank with a 3-month note payable. what effect did
the borrowing transaction have on hunt company’s current ratio?
a.the ratio remained unchanged
b.the change in the current ratio cannot be determined
c.the ratio decreased
d.the ratio increased
7) looper, inc. has 25,000 shares of 6%, 100 par value, noncumulative preference shares
and 50,000 ordinary shares with a 1 par value outstanding at december 31, 2011. there
were no dividends declared in 2010. the board of directors declares and pays a 250,000
dividend in 2011. what is the amount of dividends received by the common
shareholders in 2011?
a.0
b.150,000
c.250,000
d.100,000
8) as a recent graduate of state university you’re aware that ifrs requires component
depreciation for plant assets. a friend has asked you to succinctly explain what
component depreciation means. which of the following correctly describes component
depreciation?
a.the method used to ensure that the depreciation rate remains constant from year to
year
b.the method that requires that significant parts of a plant asset with different useful
lives be depreciated separately
c.the method used to prorate annual depreciation on a time basis
d.the method of depreciation recommended for an asset that is expected to be
significantly more productive in the first half of its useful life
9) a machine was purchased for $18,000 and it was estimated to have a $3,000 salvage
value at the end of its useful life. monthly depreciation expense of $250 was recorded
using the straight-line method. the annual depreciation rate is
a.25%
b.2%
c.16%
d.20%
10) the following totals for the month of march were taken from the payroll register of
kern company.
the entry to record the payment of net payroll would include a
a.debit to salaries and wages expense for $23,238
b.debit to salaries and wages payable for $25,326
c.debit to salaries and wages payable for $23,238
d.credit to cash for $23,238
11) the future value of an annuity factor for 2 periods is equal to
a.1 plus the interest rate
b.2 plus the interest rate
c.2 minus the interest rate
d.2
12) a company using the same accounting principles from year to year is an application
of
a.timeliness
b.consistency
c.full disclosure
d.materiality