Financial Statements

Question 1

Info

Answer 1

Started on 25 August 2014 @12.00 AM
Total questions 109
To do at a time 40, 40, 29
Practice session 90

Question 2

Which of the following is an accepted valuation technique for fair value estimates?

Answer 2

the cost approach, the market approach, and the income approach.

Question 3

How should an unusual event not meeting the current criteria for an extraordinary item be disclosed in the financial statements?

Answer 3

items unusual in nature or infrequent in occurrence are to be disclosed separately in the operating section of the income statement and also may be supplemented by a footnote.
Note that such items should not be shown net of income taxes.

Question 4

Comprehensive Income, applies to which of the following entities?

Answer 4

to enterprises that develop a full set of financial statements which report cash flows, results of operations, and financial position.

Question 5

Is Accumulated depreciation of equipment is non monetary?

Answer 5

Yes,
nonmonetary items include assets and liabilities whose amounts may change over time in terms of a monetary unit (e.g., the U.S. dollar). Examples of nonmonetary assets and liabilities included inventory, property, plant, equipment, and obligations under warranties. Accumulated depreciation is a nonmonetary item because it relates to equipment.

Question 6

The fair value option - hint.

Answer 6

The fair value option may be elected on an instrument-by-instrument basis for available-for-sale securities.

Question 7

Does current vulnerability due to a possible recession needs disclosure.

Answer 7

No

Question 8

Payment of benefit.

Answer 8

A liability for the cost should be recorded when the liability has been incurred.

Question 9

the market that has the greatest volume and level of activity is the

Answer 9

The principal market.

Question 10

The market that maximizes the price received for the asset.

Answer 10

Most advantageous market.

Question 11

The most relevant market.

Answer 11

ASC Topic 820 does not use the terminology relevant market.

Question 12

The independent market.

Answer 12

ASC Topic 820 does not use the term independent market.

Question 13

formula for gross profit

Answer 13

gross profit is calculated as net sales less cost of goods sold

Question 14

Interest expense is

Answer 14

Financial expense or other expense.

Question 15

10 Q to be filed by large accelerator filer

Answer 15

large accelerated filers must file Form 10-Q 40 days after fiscal quarter end.

Question 16

SEC’s regulation S-X describes

Answer 16

The form and content of financial statements to be filed with the SEC.

Question 17

Which of the following is an appropriate market approach for determining fair value measurements?

Answer 17

Using relevant information from recent transactions.

Question 18

The fair value option election applies to all of the following items except for

Answer 18

Pensions.

Question 19

The fair value for an asset or liability is measured as

Answer 19

The price that would be received when selling an asset or paid when transferring a liability in an orderly transaction between market participants.

Question 20

According to ASC Topic 820, which level has the lowest priority for valuation purposes?

Answer 20

Level 3

Question 21

ASC Topic 825 for the fair value option election applies to all of the following items except for

Answer 21

the fair value option does not apply to leases.

Question 22

the cumulative effect of changing to a new accounting principle should be included in net income of

Answer 22

A change in accounting principle is accounted for through retrospective application to all prior periods, unless it is impracticable to do so.

Question 23

ASC Topic 255 requires that the current cost for inventories be measured as the

Answer 23

current cost for inventories be measured at the lower of current cost or recoverable amount at the measurement date.

Question 24

Which of the following statements is true regarding the fair value option for valuing financial assets and liabilities?

Answer 24

The fair value option must be applied to all interests in the same entity.

Question 25

Form 10-Q.

Answer 25

Need to memorize

Question 26

Form 8-K.

Answer 26

Need to memorize

Question 27

Form 10-K.

Answer 27

Need to memorize

Question 28

Form S-1.

Answer 28

Need to memorize

Question 29

Which of the following facts concerning inventories should be disclosed in the summary of significant accounting policies?

Answer 29

Composition is not but pricing should

inventory pricing would be considered a significant accounting policy.

Question 30

In accordance with ASC Topic 255, the Consumer Price Index for All Urban Consumers is used to compute information on a

Answer 30

“constant dollar” basis. The index is used to restate financial statement elements to dollars which have the same purchasing power.

Question 31

Which of the following is an appropriate income approach for developing fair value measurements?

Answer 31

Using present value techniques to discount cash flows.

Question 32

Users of prospective financial information can include

Answer 32

Recall the users of prospective financial statements.
General users with whom the responsible party is not negotiating directly.
The responsible party.
Third parties with whom the responsible party is negotiating directly.

Question 33

According to ASC Topic 820, the fair value of an asset should be based upon

Answer 33

The price that would be received to sell the asset.

Question 34

Smith Company reports under IFRS. A note payable is classified as current in Smith’s statement of financial position. Under what conditions can the note payable be classified as noncurrent instead of current?

Answer 34

in order to reclassify a liability from current to noncurrent, an agreement to refinance the liability as long-term must be executed before the statement of financial position date.

Question 35

Which of the following should be disclosed in a summary of significant accounting policies?

Answer 35

Criteria for determining which investments are treated as cash equivalents.

Question 36

Which of the following accounting bases may be used to prepare financial statements in conformity with a comprehensive basis of accounting other than generally accepted accounting principles?

Answer 36

. Basis of accounting used by an entity to file its income tax return.
II. Cash receipts and disbursements basis of accounting.

Question 37

The cumulative effect of an accounting change should generally be given retrospective application for a

Answer 37

Change in accounting principle Change in accounting entity

Yes Yes

Question 38

What is a reclassification adjustment as used when reporting comprehensive income?

Answer 38

A reclassification adjustment is an adjustment made to avoid double counting in comprehensive income items that are displayed as part of net income for a period that also had been displayed as part of other comprehensive income in that period or earlier periods.

Question 39

Which of the following should be disclosed in the summary of significant accounting policies?

Answer 39

Basis of consolidation.

Question 40

Which of the following facts concerning plant assets should be disclosed in the summary of significant accounting policies?

Answer 40

Composition Depreciation expense amount

Yes Yes

Yes No

Question 41

Giaconda, Inc. acquires an asset for which it will measure the fair value by discounting future cash flows of the asset. Which of the following terms best describes this fair value measurement approach?

Answer 41

Income.

There are three fair value valuation techniques.

Question 42

ASC Topic 255 requires that the current cost for inventories be measured as the

Answer 42

Lower of current cost or recoverable amount.

Question 43

What is principal market?

Answer 43

The market that has the greatest volume and level of activity.