Course Introduction
Advanced Accounting Final Exam
Questions
Advanced Accounting delves into complex financial reporting topics, including consolidation of financial statements, business combinations, partnerships, foreign currency transactions, and translation of foreign entity financials. The course explores the accounting treatment and disclosure requirements for mergers, acquisitions, intercompany transactions, noncontrolling interests, and variable interest entities. Additional emphasis is placed on emerging issues, international accounting standards, accounting for governmental and not-for-profit entities, and ethical considerations related to advanced accounting topics. Through real-world case studies and practical assignments, students develop the skills necessary to interpret, analyze, and prepare advanced financial reports for a variety of organizational structures and stakeholder needs.
Recommended Textbook
Fundamentals of Advanced Accounting 7th Edition by Joe Ben Hoyle
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12 Chapters
1194 Verified Questions
1194 Flashcards
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Page 2
Chapter 1: The Equity Method of Accounting for Investments
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121 Verified Questions
121 Flashcards
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Sample Questions
Q1) How much income did Mehan report from Cook during 2018?
A)$90,000.
B)$110,000.
C)$67,500.
D)$87,500.
E)$78,750.
Answer: D
Q2) At what amount will Inkblot be reflected in Trycker's December 31,2017 balance sheet?
A)$2,400,000.
B)$2,280,000.
C)$2,480,000.
D)$2,800,000.
E)$7,000,000.
Answer: D
Q3) What amount of gross profit on 2018 intra-entity sales should Steven defer at December 31,2018?
Answer: [($75,000 - $54,000)× .10 × .40] = $840
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3
Chapter 2: Consolidation of Financial Information
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Sample Questions
Q1) At the date of acquisition,by how much does Riley's additional paid-in capital increase or decrease?
A)$ 0.
B)$440,000 increase.
C)$450,000 increase.
D)$640,000 increase.
E)$650,000 decrease.
Answer: B
Q2) Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $47 fair value for all of the outstanding stock of Vicker.What is the consolidated balance for Land as a result of this acquisition transaction?
A)$460,000.
B)$510,000.
C)$500,000.
D)$520,000.
E)$490,000.
Answer: D
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Chapter 3: Consolidations - Subsequent to the Date of Acquisition
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Sample Questions
Q1) What is the balance in Cale's investment in subsidiary account at the end of 2017?
A)$1,099,000.
B)$1,020,000.
C)$1,096,200.
D)$1,098,000.
E)$1,144,400.
Answer: A
Q2) All of the following are acceptable methods to account for a majority-owned investment in subsidiary except
A)The equity method.
B)The initial value method.
C)The partial equity method.
D)The fair-value method.
E)Book value method.
Answer: D
Q3) What was consolidated net income for the year ended December 31,2018?
Answer: 11ea86f8_4aa6_8616_8084_993cdf66b9a1_TB4173_00
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Page 5
Chapter 4: Consolidated Financial Statements and Outside Ownership
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Sample Questions
Q1) In consolidation at January 1,2019,what adjustment is necessary for Hogan's Buildings account?
A)$2,000 increase.
B)$2,000 decrease.
C)$1,800 increase.
D)$1,800 decrease.
E)No change.
Q2) When a subsidiary is acquired sometime after the first day of the fiscal year,which of the following statements is true?
A)Income from subsidiary is not recognized until there is an entire year of consolidated operations.
B)Income from subsidiary is recognized from date of acquisition to year-end.
C)Excess cost over acquisition value is recognized at the beginning of the fiscal year.
D)No goodwill can be recognized.
E)Income from subsidiary is recognized for the entire year.
Q3) Why is it important to know if the parent paid a premium to acquire control of a subsidiary?
Q4) Determine the amount of goodwill to be recognized in this acquisition.
Page 6
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Chapter 5: Consolidated Financial Statements Intra-Entity
Asset Transactions
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Sample Questions
Q1) At what amount should the equipment (net of depreciation)be included in the consolidated balance sheet dated December 31,2017?
A)$105,000.
B)$100,000.
C)$ 95,000.
D)$ 80,000.
E)$ 85,000.
Q2) Compute the gain or loss reported on Stark's books prior to consolidation from the intra-entity transfer of land in 2017.
A)$80,000 gain.
B)$80,000 loss.
C)$ 5,000 gain.
D)$ 5,000 loss.
E)$85,000 loss.
Q3) Throughout 2018,Cleveland Co.sold inventory to Leeward Co. ,its subsidiary.From a consolidated financial statement point of view,when will the gross profit on this transfer be recognized?
Q4) Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2017.
Page 7
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Chapter 6: Variable Interest Entities, Intra-Entity Debt,
Consolidated Cash Flows, and Other Issues
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Sample Questions
Q1) Rojas Co.owned 7,000 shares (70%)of the outstanding 10%,$100 par,preferred stock and 60% of the outstanding common stock of Brett Co.Assuming there are no excess amortizations or intra-entity transactions,and Brett reports net income of $780,000,what is the noncontrolling interest in the subsidiary's income?
A)$234,000.
B)$273,000.
C)$302,000.
D)$312,000.
E)$284,000.
Q2) Where do intra-entity transfers of inventory appear in a consolidated statement of cash flows?
A)They do not appear in the consolidated statement of cash flows.
B)Supplemental schedule of noncash investing and financing activities.
C)Cash flows from operating activities.
D)Cash flows from investing activities.
E)Cash flows from financing activities.
Q3) Parent Corporation recently acquired some of its subsidiary's outstanding bonds at an amount which required the recognition of a loss.In what ways could the loss be allocated? Which allocation would you recommend? Why?
Page 8
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Chapter 7: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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Sample Questions
Q1) All of the following hedges are used for future purchase/sale transactions except
A)Forward contracts used as a fair value hedge of a firm commitment.
B)Options used as a fair value hedge of a firm commitment.
C)Option contract cash flow hedge of a forecasted transaction.
D)Forward contract cash flow hedges of a forecasted transaction.
E)Forward contracts used to hedge a foreign currency denominated liability.
Q2) Compute the U.S.dollars received on February 1,2019.
A)$138,000.
B)$136,500.
C)$145,500.
D)$141,000
E)$142,500.
Q3) What are the two separate transactions that require recording under the two-transaction perspective?
Q4) Assuming this is a cash flow hedge;prepare journal entries for this sales transaction and forward contract.
Q5) How is the fair value of a Forward Contract determined by U.S.GAAP?
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Q6) Where can you find exchange rates between the U.S.dollar and most foreign currencies?
Chapter 8: Translation of Foreign Currency Financial
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Sample Questions
Q1) A net asset balance sheet exposure exists and the foreign currency appreciates.Which of the following statements is true?
A)There is no translation adjustment.
B)There is a transaction loss.
C)There is a transaction gain.
D)There is a negative translation adjustment.
E)There is a positive translation adjustment.
Q2) In accounting,the term translation refers to
A)The calculation of gains or losses from hedging transactions.
B)The calculation of exchange rate gains or losses on individual transactions in foreign currencies.
C)The procedure required to identify a company's functional currency.
D)The calculation of gains or losses from all transactions for the year.
E)A procedure to prepare a foreign subsidiary's financial statements for consolidation.
Q3) Prepare a statement of retained earnings for this subsidiary in stickles and then translate the amounts into U.S.dollars.
Q4) Prepare a statement of cash flows for this subsidiary in stickles and then translate the amounts into U.S.dollars.
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Page 10
Chapter 9: Partnerships: Formation and Operation
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Sample Questions
Q1) Max,Jones and Waters shared profits and losses 20%,40%,and 40% respectively and their partnership capital balance is $10,000,$30,000 and $50,000 respectively.Max has decided to withdraw from the partnership.An appraisal of the business and its property estimates the fair value to be $200,000.Land with a book value of $30,000 has a fair value of $45,000.Max has agreed to receive $20,000 in exchange for her partnership interest after revaluation.At what amount should land be recorded on the partnership books?
A)$ 20,000.
B)$ 30,000.
C)$ 45,000.
D)$ 50,000.
E)$200,000.
Q2) What is the total partnership capital after Roberts retires receiving $160,000 and using the goodwill method?
A)$290,000.
B)$176,000.
C)$ 80,000.
D)$120,000.
E)$230,000.
Q3) Record the journal entry to allocate the salary of Noris.
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Chapter 10: Partnerships: Termination and Liquidation
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Sample Questions
Q1) What is a safe cash payment?
Q2) If the assets could be sold,for $228,000 and there are no liquidation expenses what is the amount that Tillman would receive from the liquidation?
A)$36,000.
B)$ 0.
C)$ 2,500.
D)$38,250.
E)$67,250.
Q3) Record the journal entry for payment of outstanding liabilities to the creditors.
Q4) For what amount would noncash assets need to be sold to generate enough cash in order that at least one partner would receive some cash upon liquidation?
A)$185,000
B)$170,000
C)$165,000
D)$ 95,000
E)$ 90,000
Q5) How much of the existing cash balance could be distributed safely to partners at this time?
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Chapter 11: Accounting for State and Local Governments,
part I
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Sample Questions
Q1) On January 1,2018,Wakefield City purchased office supplies for $40,000.During the year,$35,000 of these supplies were used.
Required:
Record the journal entries for these transactions using the purchases method.(Disregard the encumbrance entries. )
Q2) Simple City has recorded the purchase order of two trucks for a total of $100,000. Prepare the journal entries to reflect that the two trucks have been received with an invoice amount of $105,000.This invoice has been approved but not yet paid.Identify the fund in which the entries are recorded.
Q3) A county enacted a special tax levy and the money must be used to buy unused farmland for environmental preservation.What kind of fund should be used to record the revenues generated by the tax?
Q4) What are the two sets of financial statements mandated by GASB for state and local governments? For each set,what are the names of the individual statements that must be produced?
Q5) Under modified accrual accounting,when are expenditures recorded?
Q6) What is the purpose of fund financial statements?
Page 13
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Chapter 12: Accounting for State and Local Governments, part II
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Sample Questions
Q1) Prepare a Statement of Net Position at December 31,2018.
Q2) Which of the following statements regarding Management's Discussion and Analysis is true?
A)MD&A is required only for Proprietary Fund Financial Statements.
B)MD&A is reported in the statistical section of the annual report.
C)MD&A is required for comprehensive annual financial reports.
D)MD&A for state and local government financial statements must include an analysis of potential,untapped revenue sources.
E)MD&A is an optional inclusion for state and local government financial statements.
Q3) Assuming the landfill is recorded within the General fund,how would the landfill information be represented in the governmental fund financial statements at December 31,2018?
Q4) Prepare the journal entry/entries for the two transactions for the purposes of preparing the governmental fund financial statements.
Q5) What are the three broad sections of a state or local government's CAFR?
Q6) What is meant by the term fiscally independent?
Q7) What three criteria must be met to identify a governmental unit as a primary government?
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