Course Introduction
Financial Accounting
Test Preparation
Financial Accounting introduces students to the fundamental principles and practices involved in the preparation, analysis, and interpretation of financial statements. The course covers key topics such as the accounting cycle, recording financial transactions, adjusting entries, and the preparation of balance sheets, income statements, and cash flow statements in accordance with generally accepted accounting principles (GAAP). Emphasis is placed on the role of financial information in decision-making for investors, creditors, and management, providing a foundation for further study in accounting and finance.
Recommended Textbook
Intermediate Accounting 8th Edition by J.
David Spiceland
Available Study Resources on Quizplus
21 Chapters
3157 Verified Questions
3157 Flashcards
Source URL: https://quizplus.com/study-set/3919
Page 2
Chapter 1: Environment and Theoretical Structure of Financial Accounting
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/78168
Sample Questions
Q1) Which of the following is not a concern expressed by the SEC regarding IFRS adoption by the U.S.?
A)Need for the U.S.to have strong influence on the standard-setting process and ensure that standards meet U.S.needs.
B)The language barriers associated with cooperation among many countries in developing IFRS.
C)The high costs to companies of converting to IFRS.
D)The fact that many laws,regulations and private contracts reference U.S.GAAP.
Answer: B
Q2) How does GAAP define fair value?
Answer: Fair value is defined as the price that would be received to sell assets or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Q3) The revenue/expense approach emphasizes determining the appropriate amounts of revenue and expense in each reporting period.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Review of the Accounting Process
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/78167
Sample Questions
Q1) In its first year of operations Acme Corp.had income before tax of $400,000.Acme made income tax payments totaling $150,000 during the year and has an income tax rate of 40%.What is the balance in income tax payable at the end of the year?
A)$160,000 credit.
B)$150,000 credit.
C)$ 10,000 credit.
D)$ 10,000 debit.
Answer: C
Q2) Mary Parker Co.invested $15,000 in ABC Corporation and received capital stock in exchange.Mary Parker Co.'s journal entry to record this transaction would include a: A)Debit to investments.
B)Credit to retained earnings.
C)Credit to capital stock.
D)Debit to expense.
Answer: A
Q3) Property taxes payable
Answer: 11ea906f_564c_1dfb_a7a0_094b7289fa2f_TB2444_00
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: The Balance Sheet and Financial Disclosures
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/78166
Sample Questions
Q1) HHF's long-term debt to equity ratio equity is:
A)133.3%.
B)75%.
C)180%.
D)0%.
Answer: B
Q2) An exception that is so serious that even a qualified opinion is not justified would result in:
A)A disclaimer.
B)An unqualified opinion.
C)An adverse opinion.
D)A consistency exception.
Answer: C
Q3) What would Symphony report as total assets?
A)$2,338.
B)$2,323.
C)$2,318.
D)$2,303.
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter
the Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/78165
Sample Questions
Q1) Required: Prepare a 2016 multiple-step income statement for Rollins Inc.with earnings per share disclosure.
Q2) Required: Prepare a 2016 multiple-step income statement for Kroeger Inc.with earnings per share disclosure.
Q3) List at least four operating activities that would be reported in the statement of cash flows for Walmart.Assume the use of the direct method.
Q4) In a recent press release,Estee Lauder Co.reported "a fiscal fourth-quarter loss due to a restructuring charge but said it expects to see earnings growth in its fiscal second through fourth quarters." The New York skin care and cosmetics company reported a net loss of $25.4 million,or 13 cents a share,for the quarter ended June 30,compared with net income of $20.4 million,or six cents a share,a year earlier.Excluding the restructuring charge of $76.9 million,or 32 cents a share,the company said profit would have been $51.5 million,or 19 cents a share.Discuss how Estee Lauder's press release relates to its earnings quality.
Q5) Required: Prepare a multiple-step income statement with earnings per share disclosure.
Q6) Explain,using an example,how a company can use earnings management and justify it by conservatism.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Income Measurement
Available Study Resources on Quizplus for this Chatper
347 Verified Questions
347 Flashcards
Source URL: https://quizplus.com/quiz/78164
Sample Questions
Q1) Which of the following is not true about accounting for revenue from franchise arrangements?
A)Franchise arrangements often include a performance obligation for a license as well as for delivery of goods and services.
B)Franchise arrangements typically include one or more performance obligations for which revenue is recognized at a point in time.
C)Franchise arrangements typically include one or more performance obligations for which revenue is recognized over a period of time.
D)Franchise arrangements typically include one performance obligation because the goods and services included in the arrangement are not separately identifiable.
Q2) When the right of return exists and a seller cannot make reliable estimates of future returns,the installment sales method can be used.
A)True
B)False
Q3) Using the information provided above,use the DuPont framework to briefly summarize the operating performance of McDonald's relative to its benchmark competitors.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Time Value of Money Concepts
Available Study Resources on Quizplus for this Chatper
109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/78163
Sample Questions
Q1) Mustard's Inc.sold the rights to use one of its patented processes that will result in cash receipts of $2,500 at the end of each of the next four years and a lump sum receipt of $4,000 at the end of the fifth year.The total present value of these payments if interest is at 9% is:
A)$10,699.
B)$11,468.
C)$12,100.
D)$14,000.
Q2) Incognito Company is contemplating the purchase of a machine that provides it with net after-tax cash savings of $80,000 per year for five years.Interest is 8%.Assume the cash savings occur at the end of each year.
Required: Calculate the present value of the cash savings.
Q3) Shane wants to invest money in a 6% CD account that compounds semiannually.Shane would like the account to have a balance of $100,000 four years from now.How much must Shane deposit to accomplish his goal?
A)$88,849.
B)$78,941.
C)$25,336.
D)$22,510.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Cash and Receivables
Available Study Resources on Quizplus for this Chatper
160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/78162
Sample Questions
Q1) Using a T-account for the allowance for doubtful accounts,identify the changes in the account during fiscal year 2013.
Q2) Recognizing sales returns when merchandise is returned could result in an overstatement of income in the period of the related sale.
A)True
B)False
Q3) Explain the transactions that typically would affect the discount on notes receivable account.
Q4) In a bank reconciliation,adjustments to the book balance could include adding or subtracting company errors.
A)True
B)False
Q5) How could a company with receivables like HP be able to manage earnings in applying generally accepted accounting principles?
Q6) If Winchester is using the balance sheet approach to determining loan losses and the Allowance account balance,what percentage did it use in 2016?
Q7) Describe some key elements of an internal control system for cash.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Inventories: Measurement
Available Study Resources on Quizplus for this Chatper
129 Verified Questions
129 Flashcards
Source URL: https://quizplus.com/quiz/78161
Sample Questions
Q1) FIFO periodic and FIFO perpetual always produce the same dollar amounts for cost of goods sold.
A)True
B)False
Q2) GG Inc.uses LIFO.GG disclosed that if FIFO had been used,inventory at the end of 2016 would have been $15 million higher than the difference between LIFO and FIFO at the end of 2015.Assuming GG has a 40% income tax rate:
A)Its reported cost of goods sold for 2016 would have been $9 million higher if it had used FIFO rather than LIFO for its financial statements.
B)Its reported cost of goods sold for 2016 would have been $15 million higher if it had used FIFO rather than LIFO for its financial statements.
C)Its reported net income for 2016 would have been $9 million higher if it had used FIFO rather than LIFO for its financial statements.
D)Its reported net income for 2016 would have been $15 million higher if it had used FIFO rather than LIFO for its financial statements.
Q3) Briefly explain when there would be a tax benefit from electing LIFO rather than FIFO.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Inventories: Additional Issues
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/78160
Sample Questions
Q1) When using the gross profit method to estimate ending inventory,it is not necessary to know:
A)Beginning inventory.
B)Net purchases.
C)Cost of goods sold.
D)Net sales.
Q2) In the year 2016,the internal auditors of Goofy Co.discovered that goods costing $25 million that were purchased in December of 2015 were recorded for $20 million.The goods were properly measured in the December 31,2015,ending physical inventory.
Required:
Prepare the journal entry needed in 2016 to correct the error.Also,briefly describe any other measures Goofy would take in connection with correcting the error.(Ignore income taxes. )
Q3) In applying the lower of cost and net realizable value rule,the inventory of surgical supplies would be valued at:
A)$100.
B)$90.
C)$85.
D)$75.
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Property, plant, and Equipment and Intangible
Assets: Acquisition and Disposition
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/78159
Sample Questions
Q1) When is interest capitalized? Briefly describe how the amount to be capitalized is computed.
Q2) The asset retirement obligation (rounded)that should be reported on MMC's balance sheet one year after the extraction activities begin is:
A)$0.
B)$14.7 million.
C)$15.7 million.
D)$19.3 million.
Q3) Assets acquired in a lump-sum purchase are valued based on:
A)Their assessed valuation.
B)Their relative fair values.
C)The present value of their future cash flows.
D)Their cost plus the difference between their cost and fair values.
Q4) The successful efforts method of accounting for oil and gas exploration costs allows costs incurred in searching for oil and gas within a large geographical area to be capitalized.
A)True
B)False
Q5) How are assets valued when they are acquired by issuing stock?
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Property, plant, and Equipment and Intangible
Assets: Utilization and Impairment
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/78158
Sample Questions
Q1) Briefly explain the disclosures that are required relative to depreciable assets.
Q2) Depreciation for 2016,using double-declining balance,would be:
A)$40,000.
B)$10,000.
C)$36,000.
D)$ 9,000.
Q3) Statutory depletion is the maximum amount of depletion that may be reported in financial statements prepared according to GAAP.
A)True
B)False
Q4) Once selected for existing assets,a company must consistently use the same method of depreciation for all subsequent fixed asset acquisitions.
A)True
B)False
Q5) Activity-based methods of depreciation are appropriate for assets whose service life is a function of use rather than time.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Investments
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/78157
Sample Questions
Q1) Newjohn Company owns stock in several affiliated companies.Investments in some of these affiliates are accounted for as securities available for sale while some are accounted for using the equity method.
Required:
(1. )What factors determine which method should be used?
(2. )What events are recorded when the equity method is used?
(3. )What events are recorded when the securities are accounted for as available for sale?
Q2) IFRS No.9 is a standard that indicates accounting for investments when the investor does not have significant influence over the investee.
Required:
Explain how equity investments are accounted for under IFRS No.9.What alternative accounting approaches are available,what determines whether an investment qualifies for each approach,and what are the key features of each approach with respect to accounting for unrealized gains and losses?
Q3) Assuming a constant tax rate of 40%,what was the pre-tax accumulated unrealized gain or loss on available-for-sale securities at 7/1/2015?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Current Liabilities and Contingencies
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/78156
Sample Questions
Q1) Which of the following is not a liability?
A)An unused line of credit.
B)Estimated income taxes.
C)Sales tax collected from customers.
D)Advances from customers.
Q2) On April 31,2016,Elkhorn Associates borrowed $10 million cash from Colonial Bank and issued a 5-month,noninterest-bearing note,priced to yield an effective interest rate of 10%.The stated discount rate on this loan is:
A)More than the effective interest rate.
B)Less than the effective interest rate.
C)Equal to the effective interest rate.
D)Unrelated to the effective interest rate.
Q3) Which of the following is a contingency that would most likely require accrual?
A)Potential claims on extended warranties.
B)Customer premium offers.
C)Potential liability on a product where none have yet been sold.
D)Sales tax payable.
Q4) Some liabilities are not contractual obligations and may not be payable in cash.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Bonds and Long-Term Notes
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/78155
Sample Questions
Q1) Assuming that Auerbach issued the bonds for $255,369,000,what interest expense would it recognize in its 2016 income statement?
A)$0.
B)$3,830,535.
C)$5,107,380.
D)$7,661,070.
Q2) Crawford Inc.has bonds outstanding during a year in which the general (risk-free)rate of interest has risen.Crawford elected the fair value option for the bonds upon issuance.What will the company report for the bonds in its income statement for the year?
A)Interest expense and a gain.
B)Interest expense and a loss.
C)A gain and no interest expense.
D)Interest expense and no gain or loss.
Q3) The method used to pay interest depends on whether the bonds are:
A)Registered or coupon.
B)Mortgaged or unmortgaged.
C)Indentured or debentured.
D)Callable or redeemable.
Q4) How are bonds and notes the same? How do they differ?
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Leases
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/78154
Sample Questions
Q1) Differentiate between guaranteed and unguaranteed residual value of leased property.Does the difference affect the lessor's accounting for the lease?
Q2) Under the new ASU,what amount of interest revenue from the lease should SmithCo report in its December 31,2016,income statement?
A)$12,000.
B)$ 4,000.
C)$ 3,400.
D)$ 5,000.
Q3) Under the new ASU,what amount did SmithCo record in its income statement for the reporting year ending December 31,2016,in connection with the lease?
A)$ 3,400.
B)$14,000.
C)$17,400.
D)$20,800.
Q4) How do U.S.GAAP and International Financial Reporting Standards (IFRS)differ with respect to the interest rate used to discount minimum lease payments?
Q5) What is meant by the term "minimum lease payments"?
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Accounting for Income Taxes
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/181039
Sample Questions
Q1) Estimated employee compensation expenses earned during the current period but expected to be paid in the next period causes:
A)An increase in a deferred tax asset.
B)A decrease in a deferred tax asset.
C)An increase in a deferred tax liability.
D)A decrease in a deferred tax liability.
Q2) During the current year,Stern Company had pretax accounting income of $45 million.Stern's only temporary difference for the year was rent received for the following year in the amount of $15 million.Stern's taxable income for the year would be:
A)$30 million.
B)$60 million.
C)$50 million.
D)$45 million.
Q3) What would Puritan report as net income for 2017?
A)$620,000.
B)$420,000.
C)$270,000.
D)$460,000.
Q4) What is a valuation allowance for deferred tax assets and when is it used?
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Pensions and Other Postretirement Benefits
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/78152
Sample Questions
Q1) What is the theoretical and practical trade-off when measuring the pension liability using the projected benefit obligation compared to the accumulated benefit obligation?
Q2) What are the possible components of pension expense? Which of these elements would exist in every defined benefit plan?
Q3) Which of the following is not a potential component of pension expense?
A)Return on plan assets.
B)Prior service cost.
C)Retiree benefits paid.
D)Gains and losses.
Q4) The income statement of Starboard Industries includes $12 million for the amortization of a loss resulting from the company's actuary changing an estimate used in calculating the obligation for the pension plan.Does Starboard Industries prepare its financial statements according to U.S.GAAP or IFRS?
Q5) If a pension plan is underfunded,the company has a net loss-OCI.
A)True
B)False
Q6) Discuss the key quantitative elements of accounting for a defined benefit pension plan.
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Shareholders Equity
Available Study Resources on Quizplus for this Chatper
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/78151
Sample
Questions
Q1) Coy,Inc. ,initially issued 200,000 shares of $1 par value stock for $1,000,000 in 2014.In 2015,the company repurchased 20,000 shares for $200,000.In 2016,10,000 of the repurchased shares were resold for $160,000.In its balance sheet dated December 31,2016,Coy,Inc.'s treasury stock account shows a balance of:
A)$ 0.
B)$ 40,000.
C)$100,000.
D)$200,000.
Q2) Corporations are formed in accordance with:
A)The Model Business Corporation Act.
B)Federal statutes.
C)The laws of individual states.
D)Federal trade commission regulations.
Q3) Assuming that Composition had Dividends Payable of $17,450 thousand at December 31,2014,compute the balance in that account at December 31,2016.
Q4) Some preferred stock is cumulative while other preferred stock is noncumulative.What does this mean?
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Share-Based Compensation and Earnings Per Share
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/78150
Sample Questions
Q1) When calculating diluted earnings per share,stock options:
A)Are included if they are antidilutive.
B)Should be ignored.
C)Are included if they are dilutive.
D)Increase the numerator while not affecting the denominator.
Q2) Which of the following does not represent potential shares?
A)Convertible preferred stock.
B)Convertible bonds.
C)Stock rights.
D)Participating preferred stock.
Q3) If the options have a vesting period of five years,what would be the balance in "Paid-in Capital-Stock Options" three years after the grant date?
A)A credit of $4.8 million.
B)A credit of $16.2 million.
C)A debit of $4.8 million.
D)A debit of $16.2 million.
Q4) When the income statement includes discontinued operations,which amounts require per share presentation?
Q5) What is the "if converted method"?
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Accounting Changes
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/78149
Sample Questions
Q1) A company failed to record unrealized gains of $20 million on its available for sale security investments.Its tax rate is 30%.As a result of this error,comprehensive income would be:
A)Understated by $14 million.
B)Understated by $6 million.
C)Understated by $20 million
D)Unaffected.
Q2) Which of the following is not a change in accounting principle that usually is accounted for by retrospectively revising prior financial statements?
A)Change from FIFO to the average method of inventory costing.
B)Change from SYD to DDB depreciation.
C)Change from the average method of inventory costing to FIFO.
D)Change from the LIFO to the FIFO method of inventory costing.
Q3) Error corrections require restatement of all the affected prior year financial statements reported in comparative financial statements.
A)True
B)False
Q4) Describe in detail the way companies report most voluntary changes in accounting principle.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/78148
Sample Questions
Q1) In determining cash flows from operating activities (indirect method),adjustments to net income should not include:
A)An addition for depreciation expense.
B)An addition for bond discount amortization.
C)An addition for a gain on sale of equipment.
D)An addition for patent amortization.
Q2) Is depreciation a source of cash? Explain.
Q3) Kinney reported cost of goods sold of $168,114,150 in its fiscal 2015 income statement.Compute its net inventory purchases during the year.
Q4) What activities are included in the statement of cash flows under the section titled "Cash flows from financing activities"?
Q5) Payments to acquire bonds of other corporations should be classified on a statement of cash flows as:
A)A lending activity.
B)An operating activity.
C)A financing activity.
D)An investing activity.
Q6) Did accounts receivable increase or decrease during 2016? Explain.
To view all questions and flashcards with answers, click on the resource link above. Page 23