Day 12

Question 1

How should Deferred Tax Assets and Liabilities be reported on the BS?

Answer 1

Non-Current Asset or Non-Current Liability

MCQ-05690

Question 2

How does a Stock Dividend of $10k affect Equity on the BS?

Answer 2

It increases the number of outstanding shares

It does NOT reduce Equity

MCQ-08997

Question 3

Under lower of cost or market when valuing inventory, define: market, ceiling, and floor

Answer 3

Market: middle value of replacement cost

Market Ceiling: Net Realizable Value (Selling Price - Further processing costs)

Market Floor: Net Realizable Value - Normal Profit (Selling Price × Profit Margin)

MCQ-06053

Question 4

Harvey wants to buy a F-150 and and he asks Ford if they will pay the sales tax and accept a $1,000 cash payment. Sales Tax rate is 8%. What amounts and accounts should Ford credit?

Answer 4

DR Cash $1,000
CR. Sales Revenue $926 (1,000 ÷ 1.08)
CR. Sales Tax Payable $74

MCQ-12646

Question 5

When is a Vacation Liability recorded?

Answer 5

The employer needs to record a Vacation Liability WHEN employees earn vacation where rights accumulate

AND

The employees have not taken vacation at year end

MCQ-11125

Question 6

US GAAP requires lower of cost or net realizable value be applied to what?

Answer 6

Inventory & the following:
- WIP
- Raw materials
- Finished goods
- and when FIFO cost Flow assumption is used

MCQ-04490

Question 7

Should Deferred Revenue be included in OCI?

Answer 7

No

Nor should it be included in Comprehensive Income

Deferred Revenue represents cash received prior to the revenue being EARNED.

Deferred Revenue = Liability until it is earned

MCQ-08562

Question 8

In a Stmt of Activity of a voluntary health and welfare organization, depreciation expense should:

Answer 8

Be included as an element of expense

MCQ-01330

Question 9

Components of OCI: PUFI

Answer 9

Pension Adjustments
Unrealized Gains & Losses on AFS
Foreign Currency Items
Instrument Specific Credit Risk

MCQ-15678

Question 10

How should Common Stock that contains an unconditional redemption feature be recorded?

Answer 10

Recorded on the issuer’s books as liability on the date of issuance because there is an obligation of cash outflow in the future

MCQ-08252

Question 11

Effective Interest Method: Interest Expense

Answer 11

= CV @ beg. of period × Effective (market) Rate