Select Financial Statement Accounts

Question 1

What is the floor and the ceiling for replacement cost?

Answer 1

NRV less normal profit margin is the floor; NRV is the ceiling. Market CANNOT exceed the ceiling or be lower than the floor.

Question 2

When prices are rising using FIFO, COGS is the ___ and provides the _____ net
income

Answer 2

lowest and highest

Question 3

Costs are the same under a perpetual and periodic inventory system for what method?

Answer 3

FIFO

Question 4

If market yield rate is higher than stated rate, the note is issued at a ____

Answer 4

discount; opposite for premium

Question 5

Lower of Cost or Market is used for what inventory methods?

Answer 5

LIFO and Retail Method

Question 6

Significant Accounting Policies include -

Answer 6

Depreciation methods, consolidation basis, interperiod tax allocation, inventory pricing, and revenue recognition methods.

Question 7

Book Value per Share Formula

Answer 7

Total Stockholder’s Equity/# of Shares Outstanding

Question 8

When stated interest rate > market rate, bonds are sold at a ___

Answer 8

Premium (i.e., 12% sold to yield 10%)

Question 9

When stated interest rate < market rate, bonds are sold at a ____

Answer 9

Discount (i.e. 8% sold to yield 10%)