Day 40 - 37% (DNF) FAIL

Question 1

Define: DTA & DTL

Answer 1

Deferred Tax Asset = FUTURE DEDUCTIONS

Deferred Tax Liability = FUTURE INCOME

Question 2

ABC reported a DTA in year 1, what will the reversal of current temporary differences result in:

Answer 2

Deductible amounts & Taxable Profit in year 1

The reversal of temporary differences will result in future deductible amounts bc DTA = Future Tax Savings

MCQ-00841

Question 3

ABC purchased a new building for $750k cash and 50,000 common shares of stock with a Fair Value of $19 and par value of $10.

What is reported on the supplementary information of the cash flows Stmt as investing and finance activities?

Answer 3

Non-cash investing and financing activities are reported in the supplementary info.

The amount reported is the non-cash portion: (50,000 × $19 = $950,000) the fair value of the stock given up

MCQ-04518

Question 4

Under US GAAP, restorations of carrying value of long lived assets are permitted if an assets fair value increases when an impairment loss has been recorded in what case?

Answer 4

ONLY Assets Held for Disposal

MCQ-06930

Question 5

If NRV(selling Price - cost to complete) is higher than Replacement Cost and inventory basis, what should the inventory be valued at?

Answer 5

Inventory basis price

MCQ-06042

Question 6

ABC incurred $85k of R&D expenses to develop a patent and $18k of fees for registration and $12k of successfully defending the patent. How much is capitalized?

Answer 6

$30k

R&D is expensed

MCQ-04477

Question 7

Can you capitalize interest expense if you have not obtained the loan yet?

Answer 7

Yes

MCQ-01546

Question 8

A transaction denominated in a foreign currency is recorded at the:

Answer 8

Spot Rate

NOT the forwards contact price

MCQ-07221

Question 9

ABC builds townhomes and they are all homogenous and not allowed to be customized. The Simpsons make a verbal offer to buy the home on 12/15/23, the construction is completed on 3/31/24, closing takes place on 5/15/24.

When should ABC recognize revenue from the sale?

Answer 9

May 15th at closing

ABC can find another buyer bc the townhomes are identical

MCQ-08862

Question 10

What is a common modification used to prepare Modified Cash Basis FS?

Answer 10

Capitalizing Inventory

MCQ-04486