FAR ②

Question 1

which of the following does not accurately represent the mechanics of either the remeasurement(temporal) method or translation (current rate) method when translating a foreign subsidiary’s financial statements?
A. under the remeasurement method, the exchange rates used for the balance sheet and income statement are primarily dependent on whether the account is a monetary or nonmonetary item.
B. a currency gain/loss account is plugged into the income statement under the remeasurement method to ensure that the retained earnings account is in balance on the balance on the balance sheet.
C. all balance sheet account items are translated using the current year-end rate under the translation method.
D. under the translation method, the income statement accounts are translated first followed by the balance sheet accounts.

Answer 1

[C]
[remeasurement method]
1. begins with the balance sheet
2. monetary items @current exchange rate,
_cash
_A/R
_A/P
_long-term debt
3. nonmonetary items @historical rate
_depreciation expense
_marketable securities
_PP&E
_accumulated depreciation
_CS
_PS
4. Retained earnings are a plug number to get the balance sheet to balance.

[tranlate method]
1. income statement first
2.balance sheet:CS &PS @historical rate
other@current rate
3. income statement @weighted average exchange rate

Question 2

Converge Corp. sold a $100,000 bond at 95 and incurred $3,000 of bond issuance costs. which of the following is correct?
A. a debit to cash is booked for $100,000
B. an asset is booked for $3,000
C. The discount of $5,000 is amortized using the straight-line method over the life of the bond.
D. the discount of $8,000 is amortized using the effective interest method over the like of the bond.

Answer 2

[D]
dr: cash 92,000
dr: discount 8,000
cr: bonds payable 100,000

Question 3

a government-wide statement of net position must include which of the following?
A. Prior-year comparative financial data.
B. Primary government fiduciary fund data.
C. a consolidation of all government-wide activities.
D.a distinction between governmental and business-type activities.

Answer 3

[D]

Question 4

C purchased 10,000 shared (2% ownership) of R.
received a stock dividend of 2,000 shares and CV of $35, MFV of $40.
R paid a cash dividend of $1,5 per share on Sep, Y1.
What amount should C report as dividend income?

Answer 4

18,000
stock dividends are not recorded as income on the books of the recipient.

Question 5

Partnerships
goodwill method
what amount should be recorded as goodwill to the original partners?
E: 45
F: 25
New partner R has 25% and invests 30.

Answer 5

[20]
goodwill method
total capital= new gay/ rate

Question 6

A U.S. public company needs guidance in accounting for and reporting a complex derivative transaction that it entered into with a European subsidiary. this company is most likely to find the appropriate guidance in the :
A. FASB Accounting Standards Codification.
B. International financial reporting standards
C. FASB statement of financial accounting standard.
D. FASB statements of financial accounting concepts.

Answer 6

[A]

Question 7

what amount of dividend revenue should report in the Y1 income statement?
・stock dividend of 400 shares from O on July 25, Y1, when the market price of P’s shares was $20 per share day owns less than 1% of P’s CS.

・a cash dividend of $15,000 from L which the company owns a 25% interest. a majority of L’s directors are also directors of the company.

Answer 7

[0]
1. stock dividend is not reported as revenue, only a memo entry is made.
2. cash dividend reduces the investment account but does not affect revenue.

Question 8

in a company’s notes to its financial statements, the first note described significant changes in accounting policies related to valuations of inventory and plant assets. Subsequent notes included a separate note detailing inventories and a separate note detailing plant assets. for which of these subsequent notes, if any, should the company duplicate a description of its changes to significant accounting policies?
1. both the plant assets note and the inventory note.
2. neither the inventory note nor the plant assets note.

Answer 8

[2]
the first or second note of the financial statements is the summary of significant accounting policies and includes information regarding measurement bases used in preparing financial statements. the company will not duplicate the information provided in this note in later footnotes. instead, the company will present calculations of the inventory and plant assets amounts that reflect the new policies.
財務報表的第一個或第二個附註是重要會計政策的摘要，包括有關編制財務報表所用計量基礎的信息。 公司不會在以後的腳註中重複本說明中提供的信息。 相反，公司將提供反映新政策的庫存和工廠資產金額的計算。

Question 9

lease for 3 years and the economic life of the equipment is 4 years. the lease contains a written purchase option that intends to exercise. Over how many years should depreciate the leased equipment?

Answer 9

4

Question 10

assets(such as property taxes receivable) associated with unavailable revenues(such as property taxes collected more than 60 days after year-end) should be recorded by crediting:
1. a deferred outflow of resources
2. an increase to non spendable fund balance.
3. an allowance
4. a deferred inflow of resources.

Answer 10

[4]
dr: accounts receivable
cr: deferred inflows of resources

Question 11

which of the following transactions is an expenditure of a governmental unit’s general fund?
1. transfer from the general fund to a capital projects fund.
2. routine employer contributions from the general fund to a pension trust fund.
3. operating subsidy transfer from the general fund to an enterprise fund.
4. contribution of enterprise fund capital by the general fund.

Answer 11

[2]
1. transfer within other financing uses.
3. transfer within other financing uses.
4. transfer within other financing uses.

Question 12

income tax expense = 175
taxable income = 420
tax rate of 35%
deferred tax asset/liability?
a temporary difference?

Answer 12

DTL 28
a temporary difference 80

Question 13

CS 100,000 shares of $5par value on current year
1. May 1 1,000 shares of treasury stock were sold for $10,000
2. July 9 10,000 shares of previously unissued common stock were sold for $12 per share.
3.October 1 The distribution of a 2-for-1 stock split resulted in the common stock’s per share par value being halved.

P accounts for TS under the cost method. Laws in the state of P’s incorporation protect shares held in treasury from dilution when stock dividends or stock splits are declared.
in P’s December 31 statement of stockholders’ equity, the par value of the issued common stock should be:

1.275,000
2.550,000
3.291,000
4.518,000

Answer 13

[$550,000]

shares
100,000
10,000
110,000
_______________
220,000

因爲分紅導致股價折半，所以從5par value 變2.5

Question 14

in consolidating the worksheet, what amount of unrealized intercompany profit was eliminated?
應該從以下哪個角度進行？
1. A/R
2. inventory
3. revenues
4. COGS
5. gross profit

Answer 14

inventory

Question 15

in which of the following funds should the debt service transactions of a special assessment issue for which the government is not obligated in any manner to be reported?
1. trust fund
2. internal service fund
3. general fund
4. custodial fund

Answer 15

[4]
when the governmental unit is not obligated in any manner for the special assessment debt, it acts as custodian of the resource related to the special assessment. in this case, a custodial fund should be used to report the debt service transactions.
當政府單位對特別評估債務沒有任何義務時，它作為與特別評估相關的資源的託管人，在這種情況下，應使用託管基金來報告償債交易。

Question 16

Progressive Township prepares its financial statements in accordance with GASB 34. As a result, the town’s financial statements will:
1. display combined financial statements by fund type in government-wide financial statements.
2. include the net book value of its general governmental assets in its general fixed asset account group.
3. Include a comparison of the town’s budgeted and actual performance including disclosure of the originally adopted budget and all amendments included in the financial amended budget.
4. include a mandatory comprehensive transmittal letter as part of its required supplementary information that focuses on the positive elements.

Answer 16

[3]
financial statements prepared in accordance with the provisions of GASB 34 will include: 1.government-wide financial statements prepared using accrual basis accounting, 2.fund financial statements,
3.noted to the financial statement,
4.and required supplementary information that encompasses a letter titled ‘management’s discussion and analysis and budget versus actual comparisons including the display of the originally adopted budget and the changes that resulted in the final amended budget.
根據 GASB 34 的規定編制的財務報表將包括：使用權責發生製會計編制的政府範圍的財務報表、
基金財務報表、
財務報表中的註釋
以及包含標題為“管理層的討論和分析和預算與實際比較，包括顯示最初採用的預算以及導致最終修訂預算的變化。

Question 17

under the regulation S-X, an entity’s annual financial statements filed with the SEC should include, at a minimum, two:

Answer 17

balance sheets ×2Y
statement of income, changes in owners’ equity, and cash flows × 3Y

Question 18

a six-year finance lease entered into on December 31, year 1, specified equal minimum annual lease payments due on December 31 of each year. the first minimum annual lease payment, paid on December 31, Year 1 consists of which of the following?
1. interest expense(yes/no)
2. lease liability (yes/no)

Answer 18

NO+Yes
留意日期，利息并未產生

Question 19

A public entity sells steel for use in construction, one of its customers accounts for 43% of sales, and another customer accounts for 40% of sales. what should the entity disclose in its annual financial statements about these two customers?
1. the payment terms of accounts receivable due from each of the two customers.
2. the names of two customers
3. the amount of the entity’s revenue from each of the two customers.
4. the financial condition of the two customers.

Answer 19

[3]
concentrations in the volume of the business with a particular customer should be disclosed in the notes to the financial statements because these two customers individually contribute to significant sales. these concentrations increase the risk of loss, and information stating that fact should be disclosed to the financial statement user.

Question 20

interest revenue?
a $20,000, 8%, 5-year note that required five equal annual year-end payments of $5,009. the note was discounted to yield a 9% rate to L. at the date of purchase, L recorded the note as its present value of $19,485.

Answer 20

total payments = 5009×５＝25045
principal paid at PV (19485）
interest revenue 5560

Question 21

asset turnover= ?

Answer 21

asset turnover= net sales÷average total assets

Question 22

a domestic-based company used the translation method to report its foreign subsidiaries, which of the following would not be done when translating each foreign subsidiary’s financial statements to US dollars under the translation(current rate) method?
1. Roll forward the retained earnings account by transferring net income to this account
2. plug translation gains to other comprehensive income with losses reflected as a retained earnings adjustment.
3. use the historical rate to translate the common stock and additional paid-in capital accounts with all other asset and liability accounts translated using the current year-end rate.
4. convert all income statement accounts at the weighted average exchange rate during the year.

Answer 22

[2]
under the translation method, the translation gain or loss adjustment is plugged to other comprehensive income.

Question 23

Sherman Inc. had the following transactions related to the construction of the new warehouse during the year. The warehouse construction began on March 15 and ended on August 31.

1. Borrowings to finance the construction
   $265,000
2. Interest incurred from 3/15 through 8/31
   $11,000
3. Interest incurred from 9/1 through 12/31
   $8,500
4. Total cost of labor, materials, and overhead to construct warehouse $305,000
5. Costs incurred to grade and pave the driveways and parking lots $40,000
6. Costs to repair the water line ruptured during excavation $8,000

Answer 23

Interest incurred from 3/15 through 8/31 $11,000
The total cost of labor, materials, and overhead to construct the warehouse 305,000
_________________________________________
Capitalized cost of warehouse
$316,000

Question 24

an XBRL financial statement exhibit is required to be submitted with all of the following SEC fillings, except:
1. form 10-k
2. form 6-k
3. form, 3,4 and 5
4. form 20-f

Answer 24

[3]
form3, 4, and 5 are required to be filed by directors, officers, or beneficial owners of more than 10% of a class of equity securities of a registered company. These forms fo not contain the registered company’s financial statements because they are not filed by the company, and therefore are not required to present the company’s financial statements in an exhibit prepared using XRBL.

Question 25

on Dec 1, Y2, C purchased supplies from A for 5,000 euros. on that date, the spot rate was 0.9. Feb 1, Y3 rate was 0.95 Dec 31, Y2 rate was 1.02 what amount of foreign currency transaction gain(loss) is reported on C's income statement for the year ended Dec 31, Y3?

Answer 25

350 Y2 buy = 4500 Y2 end = 5100 Y3 pay = 4750 gain =350

Question 26

which should include in a general fund's encumbrance account? 1. outstanding vouchers payable amounts 2. outstanding purchase order amounts 3. Excess of the amount of a purchase order over the actual expenditure for that order

Answer 26

[2] 1. outstanding vouchers payable amounts represent actual obligations which are included in "vouchers payable" or "account payable" 3. once an "actual expenditure for that order" has taken place(which means the goods or services have been received), the encumbrance is reversed and the actual expenditure is recorded as vouchers or accounts payable.

Question 27

Lyons Youth Association(LYA) is a sports youth organization for boys serving the Lyons Township community for the past 75 years. the five elected members of the Lyons Township town council serve as the board of governance of the LYA. the budget of the LYA is approved by the town council. assuming that LYA is a separate legal entity, the Lyons Township financial statements would most likely address the relationship between the township and the LYA as: 1. a footnote presentation 2. excluded from the Lyon's Township financial statement because LYA warrants primary government presentation, 3. a component unit and LYA would be displayed using discrete presentation 4. a component unit and the LYA would be displayed using blended presentation.

Answer 27

[4] 里昂青年協會（LYA）是一個為里昂鎮社區服務了75年的男孩的體育青年組織，由里昂鎮鎮議會的五名當選成員擔任LYA的治理委員會，經鎮議會批准。假設 LYA 是一個獨立的法人實體，里昂鎮財務報表很可能將鄉鎮與 LYA 之間的關係表述為： although LYA is a separate legal entity, it qualifies as a component unit as a result of its financial interdependence with the town. in addition, blending criteria are met: the board of the component unit(LYA ) is substantively the same as that of the primary government( Lyons Township) 儘管 LYA 是一個獨立的法人實體，但由於其與該鎮的財務相互依賴，它有資格成為一個組成單元。 此外，符合混合標準：組成單位（LYA）的董事會與基層政府（里昂鎮）的董事會實質相同

Question 28

assuming that a company has a gain or a loss on a hedge transaction(i.e., asset, foreign currency, or future cash flows) during the current year that is expected to unwind next year, which of the following hedge instruments would reflect this gain or loss in its entirety in the current year's income statement? 1. foreign exchange cash flow hedge 2. fair value hedge 3. foreign exchange net investment hedge 4. cash flow hedge

Answer 28

[2] any gains or losses from a fair value hedge instrument, as well as any offsetting gain or loss on the hedge item, are recognized in their entirety in the current year's income statement. 1,4: gains and losses related to cash flow hedges are reported as a component of other comprehensive income until the hedged item affects earnings. 與現金流量套期相關的損益作為其他綜合收益的一部分報告，直到被套期項目影響收益為止。

Question 29

on Jan 1, Y2 P purchased 10% of C's Common Stock. on Aug 1, Y2 P purchased additional shares bringing its ownership up to 40% of C's CS. during Ocr, Y2 , C declared and paid a cash dividend on all of its outstanding common stock. how much income from C investment should report in Y2 income statement? ?% from when to when

Answer 29

[40% from Aug1 to Dec31, Y2 only] when significant influence is acquired, the equity method is adopted from the date and going forward. Retroactive adjustments are not required.

Question 30

consolidate financial statement total current asset:

Answer 30

P+S+inventory adjust to FV

Question 31

each of the following is an example of a tax position taken by a corporation except for: 1. an allocation or shift of income between jurisdictions 2. the characterization of income, or a decision to exclude reporting taxable income, in a tax return. 3. a decision to classify a transaction, entity, or other position in a tax return as tax exempt. 4. presumption that the relevant taxing authority will examine the tax position and has full knowledge of all relevant information.

Answer 31

[4] presuming the relevant taxing examine the tax position is an element of the two-step approach to recognizing tax benefits and is not an example of a tax position. 假設相關稅收檢查稅收狀況是確認稅收優惠的兩步法的一個要素，而不是稅收狀況的一個例子。

Question 32

which of the following constraints under GASB 54 imposes an internal limitation on the used of equity/assets of a governmental fund(balances) established by the highest internal governing authority? 1. assigned 2. non-spendable 3. committed 4. restricted

Answer 32

[3] GASB 54 下的以下哪些限制對使用由最高內部管理機構設立的政府基金（餘額）的股權/資產施加了內部限制？ under a committed category constraint, an internal limitation on the fund balance assets(equity ) of a governmental fund is established by the government's highest decision-making authority. 1: this represents an intended constraint on governmental fund balance assets established by the (internal) government without a formal commitment. 2. this is a practical constraint where current governmental fund assets can not be spent are expiring. a non-spendable fund balance constraint is considered the highest order of constraint. 4: this level of constraint is a restriction on governmental fund assets imposed by external authorities. 1：這代表了（內部）政府在沒有正式承諾的情況下對政府基金餘額資產的預期約束。 2. 這是一個實際的約束條件，即當前不能使用的政府基金資產即將到期。不可支出的資金餘額限制被認為是最高級別的限制。 4：此級別的約束是外部當局對政府基金資產施加的限制。

Question 33

the presentation of government-wide financial statements prepared using a uniform method of accounting and measurement focus in combination with both fund-based financial statements that used the method of accounting and measurement focus appropriate to the particular fund type along with appropriate reconciliation is best referred to as: 1. the public accountability approach 2. the integrated approach 3. the segregated approach 4. the financial reporting Pyramid.

Answer 33

[2] the joint presentation of government-wide and fund financial statements and appropriate reconciliation is called the integrated approach. 4: financial reporting Pyramid was the reporting model used prior to the introduction of GASB#34 reporting standards. the pyramid was comprised of individual, combining, and combined or general purpose financial statements, which essentially built from a broad of information to, condensed summary information similar to a pyramid.

Question 34

which of the following is an example of a transaction involving a market participant? 1. a company purchases real estate zoned for recreational use. 2. a company purchases a commercial rental property from a company that is owned by the same shareholders. 3. a judge orders a company to sell machinery during a bankruptcy proceeding 4. a company sells land to a local government to satisfy an outstanding tax lien.

Answer 34

[1] market participants are buyers and sellers acting in their economic best interest who are independent (not related parties), who are knowledgeable about an asset or liability, and who are willing and able to transact for that asset or liability. 市場參與者是為他們的經濟最大利益行事的買方和賣方，他們是獨立的（非關聯方），他們了解資產或負債，並且願意並能夠就該資產或負債進行交易。

Question 35

use the percentage of completion method a construction contract of $18,000 progress billings 6,600 cost incurred 5,400 collections 4,200 estimated costs to complete 10,800 what amount of gross profit should be recognized?

Answer 35

[600]

Question 36

in complying with GASB 34, a government will present separate fund financial statements for its governmental and proprietary funds. the purpose of this presentation is to : 1. document the prioritization of general revenue allocations 2. provide internal transfer pricing data regarding individual internal service funds, 3. demonstrate compliance with legal regulatory or other budgetary compliance features of the government's administration of its finances. 4. report additional and detailed information about the primary government.

Answer 36

[4] separate fund financial statements should be presented for governmental and proprietary funds to report additional and detailed information about the primary government.

Question 37

the statement changes in accumulated plan benefits for D company's pension plan shows a beginning balance of 4500 for actuarial PV of accumulated plan benefits. plan amendments 350 changes in actuarial assumptions 140 benefits accumulated 220 benefits paid out to retirees 180 ?the year-end balance for the PV of accumulated plan benefits will be equal to?

Answer 37

5030=4500+350+140+220-180

Question 38

all of the following represent primary differences between a forward contract and a futures contract, except: 1. future contracts have standardized notional amounts, while forward contracts do not. 2. forward contracts use negotiated settlement dates, while futures contracts have standardized settlement dates. 3. forward contract terms are negotiated by parties to the contract, while futures contract terms are established by a clearinghouse. 4. future contracts exchange commodities or currencies, while forward contracts only involve exchanging commodities.

Answer 38

[4] this does not represent a primary difference between a contract and a futures contract, both forward contracts and futures contracts involve exchanges of commodities or currencies between two parties at a specified price and specified future date. 這並不代表合約和期貨合約之間的主要區別，遠期合約和期貨合約都涉及在指定價格和指定未來日期在兩方之間交換商品或貨幣。

Question 39

The company has goods with a cost of $12,000 in its warehouse at year end. The company owes its supplier for all of these goods, plus they owe another $2,000 on a prior shipment that was sold during the year. JE#?

Answer 39

Inventory $12,000 Accounts payable $12,000 Cost of sales $2,000 Accounts payable $2,000

Question 40

Selling expenses Cash $5,000 Common stock cr:$10,000 Sales cr:40,000 Cost of sales 20,000 Payroll expense 8,000 Selling expenses 3,000 Administrative expenses 5,000 Small tools expense 5,000 Income tax expense (estimated tax payments) 4,000 The amount the company shows as small tools is for the principal manufacturing asset of the company. The company depreciates its fixed assets on a straight line basis with a five year asset life. Fixed assets are assumed to be purchased at the beginning of the year. [JE#]

Answer 40

Factory equipment $5,000 Small tools expense $5,000 Depreciation expense $1,000 Accumulated depreciation $1,000 注意上表並沒有將購買計入，所以應當連同設備購入一起記賬

Question 41

When reconciling the bank accounts for the year, the company discovered that it had received a $500 bad check from a customer. The check was re-deposited and paid in January of Year 2. JE#

Answer 41

Accounts receivable $500 Cash $500 Under the accrual basis, the bad check would be reported as accounts receivable since it was not paid as of December 31, Year 1.

Question 42

Haste Waste Inc. operates a 4-acre landfill that needs to be capped and closed in 5 years on January 1, Year 6. The total future cost of this activity is estimated to be $710,000.PV 530,555。 The relevant accretion rate is 6% and the asset will be depreciated straight-line over the 5 year period. Please enter your answers to the following questions in the associated cells. Calculate the Year 1 accretion expense (round to the nearest dollar)

Answer 42

Accretion expense is calculated as the balance in the liability account multiplied by the accretion rate. The beginning balance in the liability account is $530,555. Multiplying that by 6% results in a Year 1 expense of $31,833 (rounded to the nearest dollar).

Question 43

Haste Waste Inc. operates a 4-acre landfill that needs to be capped and closed in 5 years on January 1, Year 6. The total future cost of this activity is estimated to be $710,000. The relevant accretion rate is 6% and the asset will be depreciated straight-line over the 5 year period. Please enter your answers to the following questions in the associated cells. What is the December 31, Year 1 journal entry (round all amounts to the nearest dollar)?

Answer 43

dr: Depreciation Expense 106,111 dr: Accretion Expense 31,833 cr: Asset Retirement Obligation (ARO) 31,833 cr: Accumulated Depreciation 106,111 Depreciation expense of $ 106,111 ($530,555 depreciated straight-line over 5 years) will be booked, with an offsetting entry of $106,111 to accumulated depreciation. Accretion expense of $31,833 (calculated earlier) will also be booked, with an offsetting increase to the ARO liability account.

Question 44

the company issues 200 shares of $5 par value CS to T in an acquisition-business combination. MV of the company's CS is $12. Legal and consulting fees incurred in relationship to the purchase are $110. registration and issuance costs for the common stock are $35. what should be recorded in the company's APIC for this business combination?

Answer 44

[1365] dr: legal & consulting expense 110 dr: investment in T 2400 cr: cash 145 cr: CS 1000 cr: APIC 1365

Question 45

May 1, Y1 M company issued property tax assessments for the fiscal year ending June 30, Y2. the first of two equal installments was due on Nov 1, Y1. on Sep 1, Y1 D company purchased a 4-year-old factory in M company subject to an allowance for accrued taxes. D did not record the entire year's property tax obligation but instead records tax expenses at the end of each month by adjusting prepaid property taxes or property payable, as appropriate. the recording of the Nov 1, Y1, payment by D has been allocated between an increase in prepared property taxes and a decrease in property taxes payable in which of the following percentage? A. 33.333% 66.667% B.66.667% 33.333%

Answer 45

[A] payable of 4 months: Jul, Aug, Sep, Oct

Question 46

when using the acquisition method to account for a business combination, the acquirer(parent) would correctly report all of the following in its financial statements, except for: A. Eliminating any intercompany revenue and expense items between the parent and the subsidiary that would impact the income statement during the reporting period. B. Reporting the parent's retained earnings (only) on the balance sheet. C. Capitalizing the cost related to the acquisition of the subsidiary on the balance sheet. D. recognizing the noncontrolling interest share of the subsidiary's net income on the income statement.

Answer 46

[C] this is not a proper financial statement for a business combination. any costs pertaining to the business combination would be expensed and be reflected on the income statement in the year the acquisition is made.

Question 47

preparing government-wide finanial statements for the year fund balance of $500 ・capital outlay 250, long-term debt proceeds 225 ・current year depreciation of 60 and a capital asset base of 1200 ・principal payments on debt of 40 ・interest payments on debt through Oct 1 f 30 ・principal payment of 7.5 incurred through Den 31 but paid on Jan 2 ・sale tax revenues of 30 associated with Dec 31, Y1 sales remitted to the state in Feb and paid to the Township in Mar the government-wide change in net position would be displayed as:

Answer 47

527.5=500+250+40-225+30-7.5-60

Question 48

which of the following costs should not be included in research and development? A. facility cost B. personnel costs C. administrative costs D. indirect costs

Answer 48

[C]

Question 49

if the US dollar depreciates against the euro, a company that purchased goods to be settled in euros will show a loss which affects: A. net income and OCI B. net income C. net income and comprehensive income D. OCI and comprehensive income

Answer 49

[C] the loss from the US dollar depreciating will be included in income from continuing operations, which will flow down to net income. because net income(along with other comprehensive income) is composed of comprehensive income, both will be affected.

Question 50

which of the following would not be reported on a defined benefit pension plan's statement of changes in accumulated plan benefits? A. the effect of benefits paid to beneficiaries on the plan's actuarial present value of plan benefits. B. the effect of appreciations of the plan's investments on the plan's actuarial present value of plan benefits. C. the effect of plan amendments on the plan's actuarial present value of plan benefits. D. the effect of changes in the actuarial assumptions on the plan's actuarial present value of plan benefits.

Answer 50

[B] the statement of changes in accumulated plan benefits shows the impact of every factor that caused a change in a plan's actual present value of plan benefits, including 1. changes in an actuarial assumption 2. the effect of plan amendments 3. the amount of benefits paid to beneficiaries on the statement of changes in accumulated plan benefits.

Question 51

use the dollar-value LIFO method to measure its inventory. during Y1 and Y2, the company added LIFO inventory layers at a base-year cost of 125 and 175, respectively. assuming that the Y1 ending inventory has a base-year cost of $610. what is the Y2 ending inventory on a dollar-value basis if the computed price index for Y1 and Y2 was 1.3 and 1.2, respectively?

Answer 51

[857.5] 1/1 Y1 485 Y1 added 125×1.3=162.5 12/31/Y1 610 Y2 added 175×1.2=210 12/31/Y2 857.5＝485+162.5+210

Question 52

which of the following is a financial statement required of both defined benefit pension plans and defined contribution pension plans? A. statement of changes in net assets available for benefits B. statement of accumulated plan benefits

Answer 52

[A]

Question 53

in a business combination, each of the following types of costs is expensed as incurred except for: A. stock registration and issuance costs such as SEC filing fees. B. Fees paid to investment bankers C. indirect costs such as temporary occupancy costs. D. fees paid to attrorneys

Answer 53

[A] stock registration and issuance costs are treated as a direct reduction of the value of the stock on the balance sheet. the cost reduce APIC

Question 54

if sold $100 of inventory for $100 of cash, which of the following ratio would decrease? A. net profit margin B. working capital turnover C. return on equity D. return on assets

Answer 54

[A] net profit margin=net income÷ net sales 如果按原價出售， net income不會因此增加，但net sales 會變多，分母增加導致整體減少

Question 55

net profit margin=

Answer 55

net income÷ net sales

Question 56

working capital turnover =

Answer 56

sales ÷ average working capital (current asset-current liabilities)

Question 57

return on equity

Answer 57

[net income-preferred dividends]÷average total equity

Question 58

return on asset

Answer 58

net income ÷ average total assets

Question 59

the city of accountability Junction has applied GASB 34 reporting standards to its current year financials. Readers of the financial statements should expect to find the following financial reports relative to the city's performance in relation to the budget: A. presentation of budget versus actual data on a cash basis in the required supplementary information for all funds with a legally adopted budget. B. A presentation of the budget and actual data for all governmental fund types with variances of actual performance computed from both the original budget and the final adjusted budget, C. presentation of budget versus actual amounts for the General Fund and each major Special revenue fund with a leggally adopted budget presented in either the required supplementary information or within the basic financial statements. D. a presentation of a government-wide budget in comparison to government-wide financial statemnts.

Answer 59

[C] budget comparison schedules should be presented as required supplementary information or in the basic financial statements for the general fund and for each major special revenue fund that has a legally adopted annual budget.

Question 60

Party Supply started to use a public warehouse so that its products would be closer to its customer's locations. $150 of the total inventory was held in the public warehouse on December 31, Y 1/ the cost to ship the goods from the main warehouse to the public warehouse was 20. the rent paid on the public warehouse for Dec Y1 was 10. 以上操作會對inventory產生什麼影響？

Answer 60

[20] The amount of goods stored in the public warehouse is already included in the inventory total. Shipping costs between the warehouses is considered to be an inventory cost. The rent on the warehouse is a period expense and is not part of inventory.

Question 61

the value of the inventory of these items with an original cost of 50,000 was on hand on Dec 31 Y1. in early Jan Y2, party Supply sold these items for 10,000 and also paid 6,000 to have the inventory shipped to the buyer. inventory should be?

Answer 61

(-46,000) Inventory is reduced to the lower of cost or market and any probable loss sustained is recorded in the period in which the loss occurred. The amount of the loss is measured as the difference between the cost of $50,000 and the realizable value net of selling costs of $4,000.

Question 62

financial statement classification ・capital outlay expenditures are reported by the general fund

Answer 62

character Governmental fund expenditures are classified by character and include "Current" expenditures which impact the current period, "Capital Outlay" expenditures that impact current and future periods, "Debt Service" expenditures that impact current and prior periods and "Intergovernmental" expenditures representing transfers. Capital outlay expenditures in the general fund would be classified as capital outlay, a classification by character.

Question 63

financial statement classification debt service expenditures are reported by the debt service fund

Answer 63

character Governmental fund expenditures are classified by character and include "Current" expenditures which impact the current period, "Capital Outlay" expenditures that impact current and future periods, "Debt Service" expenditures that impact current and prior periods and "Intergovernmental" expenditures representing transfers. Capital outlay expenditures in the general fund would be classified as capital outlay, a classification by character.

Question 64

financial statement classification public safety expenditure are reported by the general fund

Answer 64

fundtion Current operating expenditures of a governmental fund are classified functionally in such line items as "general government", "public safety", "culture and recreation", etc. Public safety expenditures for the operating expenditures of the police and fire departments (for example) would be displayed in a functional classification titled "public safety."

Question 65

financial statement classification the special revenue fund transferred funds to the debt service fund

Answer 65

other financial sources Transfers between governmental funds are classified as "other financing sources and uses."

Question 66

financial statement classification salaries and wages expenses are reported in the enterprise fund

Answer 66

object Proprietary fund expenses are typically classified by "object", a classification that reflects the general ledger account title that describes the types of items purchased (e.g. personnel costs, materials and supplies, depreciation, etc.). Salaries and wages expenses in a proprietary fund would be classified by object and would likely appear in a line item titled "salaries and wages."

Question 67

financial statement classification occupational licenses applicable to Y2 are billed and collected in Y1.

Answer 67

the transaction is not appropriate for classification in any operating statement of city

Question 68

when should a long-lived asset be tested for recoverability? A. when events or changes in circumstances indicate that its carrying amount may not be recoverable. B. when the asset's carrying amount is less than its fair value. C. when external financial statements are being prepared. D. when the asset's fair value has decreased and the decrease is judged to be permanent.

Answer 68

[A] the carrying amount of fixed assets should be tested for recoverability whenever events or changes in circumstances indicate the carrying amount may not be recoverable

Question 69

the city applied for and was awarded a grant to fund a housing assistance program for individuals who are economically disadvantaged. which of the following revenue recognition requirements would exclusively be applied to the city's grant accounting and reporting in its governmental funds? A. contingency requirements B. reimbursement requirements C. recipient characteristic requirements D. time requirements

Answer 69

[A] contingency requirements are unique to voluntary non-exchange transactions, the city voluntarily sought out the grant to fund housing assistance and must meet the compliance requirements of the grant before revenue is recognized. example:usage of funding, serving target population

Question 70

[what should be reported as the total additions in the pension plan's statement of changes in net assets available for benefits? dividends and interest received 92 contributions received from employers and employees 340 administrative expenses 45.4 investments purchased 155 increase in FV of investments at year-end 36.75

Answer 70

468.75=92+340+36.75

Question 71

a local governmental unit could have funds using which of the following accounting bases? accrual? modified accrual?

Answer 71

both

Question 72

during the year, a city's electric utility, which is operated as an enterprise fund, rendered billings for electricity supplied to the general fund, which of the following accounts should be debited by the general fund? A. expenditure B. other financing used operating transfers out.

Answer 72

[A] 普通transferbingbuhui導致expenditure上升，但是政府從不相関的business enterprise獲得產品或服務時會被定義爲quasi-external transactions。routine service charges for utilities are one example of quasi-external transactions. DR: expenditure CR: due to the electricity utility enterprise fund

Question 73

which of the following is an incorrect statement regarding a company's use of hedging? A. hedging is used by companies primarily to manage interest rate risk B. an effective hedge occurs when the change in the value of the derivative offsets the change in the value of the hedged item. C. derivatives are used to implement a hedge transaction, D. it is used as a mechanism to reduce earning volatility.

Answer 73

[A] while hedging is used by companies to manage interest rate risk, it is also used for other purposes including managing foreign exchange risk, managing the variability in expected cash flows, and for speculative purposes.

Question 74

road and bridge asset reported using the modified approach 1.consolidated with business-type activities in the government-wide financial statements 2. required supplementary information

Answer 74

[2] Infrastructure reporting under the modified approach will be displayed as required supplementary information.

Question 75

a company leases truck ad properly classifies the leases as finance leases, the leases have a 10-year term, and the lease calculation was done three years ago when interest rates were lower. which of the following is the appropriate accounting treatment, if any, for the application of the fair value option to lease transactions? A. recognized the change for fair value accounting with an unrealized loss in the income statement. B. recognize the change to FV accounting with a cumulative adjustment to beginning retained earnings. C. Recognize the change to fair value accounting with an unrealized loss in accumulated other comprehensive income. D. Leases are not eligible for the FV option.

Answer 75

[D] entities may choose to measure certain assets and liabilities at FV, the FV option applies to financial assets and liabilities. excluded from the fair value option are investments in subsidiaries, pension benefit assets/liabilities and assets and liabilities recognized under leases. therefore, FV measurement is not an option for these capital leases.

Question 76

[what was the total reciprocal interfund activity for Curtain during May?] ・billing by the internal service fund to a department financed by the general fund for services rendered in the amount of 5,000 ・transafer of $200,000 from the general fund to establish a new enterprise fund. ・routine transfer of $50,000 from the general fund to the debt service fund.

Answer 76

[5,000] reciprocal interfund activity includes interfund and interfund services provided and used, billing by the internal service fund to a department financed by the general fund for services rendered is the only transaction meeting this definition. nonreciprocal transfers include interfund transfers (which are displayed as either other financing sources or uses on the governmental fund financial statements or purely as transfers in propriety fund financial statements) and interfund reimbursements(which are not shown on the face of the financial statements).

Question 77

when translating a foreign financial statement, where would the gains and losses from remeasurement and translation be reported? remeasurement: OCI / net income translation: OCI / net income

Answer 77

remeasurement: OCI translation: net income

Question 78

which is true in regards to consolidation? A. consolidation should not be performed when control of the subsidiary does not rest with its owners. B. the equity method can be used as a substitute for consolidation upon election by the owners.

Answer 78

[A] D. the equity method is not a substitute for consolidation and a company cannot elect wicth the method it wishes to use.

Question 79

H offered a contest in which the winner would receive 1,000,000 payable over 2 years. on Dec 31, Y1, H announced the winner of the contest and signed a note payable to the winner for 1,000,000, payable in 50,000 installments every Jan 1. also on Dec 31, Y1, H purchased an annuity for 418,250 to provide the 950,000 prize monies remaining after the first 50,000 installments, which was paid on Jan 2, Y2. in its Dec 31, Y1, balance sheet, what amount should H reports note payable-contest winner, net of the current portion? A. 900,000 B. 950,000 C. 418,250 D. 368,250

Answer 79

[C] noninterest bearing notes payable are reported at the present value of future cash flows. the present value of the noncurrent future cash flows totaling 950,000 equals 418250(creating a discount on notes payable of 531750). the present value of the current portion of the liability is 50000

Question 80

all of the following gains/losses resulting from fair value changes will impact net income except: A. Gain or loss of a hedge for a forecast sale when the sale hits the income statement. B. Gain or loss for a fixed asset purchase at the time the asset is purchased.

Answer 80

[B] the gain or loss of a cash flow hedge will remain in accumulated other comprehensive income until the company begins to depreciate the asset. at the time the asset is purchased, there is no depreciation and any fair value changes will not impact net income. choice A.when the sale hits the income statement, fair value changes related to the cash flow hedge will be taken out of accumulated other comprehensive income and moved into current earnings(impacting net income).

Question 81

the city maintains an investment pool to invest idle cash. the city extends the service to benefit its own funds as well as other governments. the invested assets would be accounted for as follows: ・city-owned funds: investment trust fund/ custodial fund/ internal service fund/assets of investing fund ・funds from other governments: investment trust fund/ custodial fund/ internal service fund/assets of investing fund

Answer 81

・city-owned funds: assets of investing fund ・funds from other governments: investment trust fund investment pools operated by a government that accounts for the investments of other entities would display those investments in an investment trust fund. the government's own investments, invested in its own investment trust fund, would treat the trust fund as if it were an outside trustee. as a result, the government's own investments would be treated as assets of the investing fund itself.

Question 82

what is the purpose of information presented in notes to the financial statements? A. to provide disclosures required by generally accepted accounting principles/ B. to provide recognition of amounts not included in the totals of the financial statements.

Answer 82

[A] information presented in note to the financial statements have the purpose of providing disclosures required by generally accepted accounting principles.

Question 83

which of the following is reported as interest expense? A. pension cost interest B. imputed interest on the non-interest bearing note.

Answer 83

[B] post-retirement healthcare benefits interest is part of post-retirement benefit expense.

Question 84

tax-extemp organizations that are part of the government qualify for discrete presentation in governmental financial reporting in all of the following circumstances except: A.resource hed by the tax-exempt organizations are for the near-exclusive benefit of the primary government(benefit standard) B. the majority of funding supporting the tax-exempt organization is passed through the primary government(affiliation standard).

Answer 84

[B] governmental accounting identifies three standards(assess, significance, or benefit) that qualify a tax-extempt organization that is related to the government for discrete presentation in governmental financial reporting. there is no alliation standard or requirement that funds be passed through the primary government.

Question 85

a company reported 6million of goodwill in last year's statement of financial position. How should the company account for the reported goodwill in the current year? A. determine whether the FV of the reporting unit is less than the carrying amount and report an impairment loss on goodwill in the income statement. B. determine whether the fair value of the reporting unit is greater than the carrying amount and report the recovery of any previous impairment in the income statement.

Answer 85

[A] B is incorrect. restoration of previously recognized impairment losses is prohibited under U.S GAAP unless the asset is held for disposal. this is not applicable here. as goodwill is not disposable.

Question 86

Jan 17, Y2, an explosion occurred at Sim Co. and cause damage to area buildings. Mar 10, Y2, reasonably possible comprehensive public liability policy has a 250 deductible clause. in Dec 31, Y1, financial statements, which were issued on Mar 25, Y2. how should this item report? A. as a footnote disclosure indicating the possible loss of 1250 B. as an accused liability of 250 C. as a footnote indicating the possible loss of 250

Answer 86

[C] this is a non recognized subsequent event as it occurred after Dec 31, Y1 balance sheet date. because there is a reasonably possible contingent loss of 250, footnote disclosure is required. since insurance appears to be available for the entire loss except the deductible portion, only the possible loss of 250 needs to be included in the footnote.

Question 87

the city plans to present its Budgetable Comparison Schedule as part of the required supplementary information. which of the following is not a true statement regarding this schedule? A. the schedule must include the variance of actual performance from the finance amended budget. B.the schedule must include the originally adopted budget, the final budget and the actual results for the year.

Answer 87

[A] presentation of the computed variance between the final amended budget and actual results is optional and not required.

Question 88

during the current year, K Country levied property taxes of 2,000, of which one present is expected to be uncollectible. ・prior year taxes collected with the 60days of the current year 50 ・prior year taxes collected between 60days and 90days into the current year 120 ・current yeat taxes collected in the current year 1800 ・current year taxes collected within the first 60days of the subsequent year 80 [ what amount of the property tax revenue should report in its government-wide statement of activities?]

Answer 88

[1980] 下面都是誤導信息

Question 89

S has a payable to its parent, P. in which of the following balance sheets should this payable are reported separately? S balance sheet: yes/no P consolidated balance sheet: yes/no

Answer 89

yes-no 在聯合財表上面不需要反應子公司對母公司的payable，但是需反應在子公司的帳面上

Question 90

the current exchange rate is 1.59 dollars per British pound. if a retailer in Great Britain were to quote the exchange rate using the direct method, he would say: A. 1 US dollar is equal to 1.59 British pounds. B. 0.63 British pounds are equal to 1 US dollar

Answer 90

[B] quoting the exchange rate using the direct method involves quoting the domestic price of one unit of another currency. from the perspective of a retailer in Great Britain. the domestic currency is the British pound.

Question 91

T acquired a 70% interest in J. at the date of acquisition, J has a total fair value of 165,000 during Y2, J generated a net income of 28,000 and paid a dividend of 6,000. what is the noncontrolling interest amount reported on the balance sheet at the end of Y2?

Answer 91

[56,100] 165,000×0.3=49,500 Beg 495,000 +NCI income 8400=28million ×0.3 -NCI dividend 1,800=6M ×0.3 End 56,100

Question 92

which of the following transaction is an expenditure of a governmental unit's general fund? A.operating subsidy transfer from the general fund to an enterprise fund. B. routine employer contributions from the genral fund to a pension trust fund.

Answer 92

[B]

Question 93

the current liability section of the balance sheet? 1.mortgage-note payable;$16 due within 12 months 355 2. short-term debt that the company is refinancing with long-term debt 175 3. deferred tax liability arising from depreciation 25

Answer 93

[16]