FAR1

Question 1

Which of the following is used to notify investors of a current event or major development?

Answer 1

FROM 8-K

Question 2

Which of the following is the proper treatment of the cost of equipment used in research and development activities that will have alternative future uses?

Answer 2

Equipment that will have alternate future uses would be capitalized and depreciated just like regular business assets.

Question 3

If an asset’s carrying amount is $100,000 and its fair value less costs to sell is determined to be $90,000, what is the impairment loss to be recognized?

Answer 3

10,000 (impairment loss is $100,000 (carrying amount) – $90,000 (fair value less costs to sell) = $10,000)

Question 4

The direct method involves listing

Answer 4

cash receipts and payments, including cash payments to suppliers, as part of operating activities.

Question 5

What is the primary purpose of adjusting the notes to financial statements to include newly identified contingent liabilities?

Answer 5

to ensure transparency and full disclosure

Question 6

Gains are reported at their

Answer 6

Net amounts

Question 7

Gains on assets are not apart of

Answer 7

Discontinued operations

Question 8

discontinued operations are only reported for the

Answer 8

disposal of component of an entity

Question 9

The single-step income statement will include in total revenues all sales of

Answer 9

goods, services, and rentals.

Question 10

Purchase discounts are not included in revenue, but instead

Answer 10

reduce cost of goods sold

Question 11

The recovery of accounts written off does not

Answer 11

hit the revenue account.

Question 12

Comprehensive income includes all the changes to equity during a period except

Answer 12

owner investments and distributions to owner. E.g. dividends paid to stockowners

Question 13

Transaction gains and losses go to the income statement, whereas translation gains and losses go to

Answer 13

OCI