Financial Reporting and Analysis
Exam Bank
Course Introduction
Financial Reporting and Analysis is a foundational course that introduces students to the principles and practices of preparing, presenting, and interpreting financial statements. The course covers key topics such as income statements, balance sheets, cash flow statements, and statements of shareholders' equity, focusing on both their construction and their use in decision-making. Students learn how to analyze financial data, evaluate a company's performance, and assess financial health using ratio analysis and other techniques. Emphasis is placed on understanding the regulatory environment, the role of accounting standards, and ethical considerations in financial reporting. By the end of the course, students will have developed skills necessary to critically evaluate financial reports and make informed business and investment decisions.
Recommended Textbook
Fundamentals of Advanced Accounting 7th Edition by Joe Ben Hoyle
Available Study Resources on Quizplus
12 Chapters
1194 Verified Questions
1194 Flashcards
Source URL: https://quizplus.com/study-set/3581
Page 2
Chapter 1: The Equity Method of Accounting for Investments
Available Study Resources on Quizplus for this Chatper
121 Verified Questions
121 Flashcards
Source URL: https://quizplus.com/quiz/71118
Sample Questions
Q1) Club Co.appropriately uses the equity method to account for its investment in Chip Corp.As of the end of 2018,Chip's common stock had suffered a significant decline in fair value,which is expected to recover over the next several months.How should Club account for the decline in value?
A)Club should switch to the fair-value method.
B)No accounting because the decline in fair value is temporary.
C)Club should decrease the balance in the investment account to the current value and recognize a loss on the income statement.
D)Club should not record its share of Chip's 2018 earnings until the decline in the fair value of the stock has been recovered.
E)Club should decrease the balance in the investment account to the current value and recognize an unrealized loss on the balance sheet.
Answer: B
Q2) What amount of equity income would Steven have recognized in 2018 from its ownership interest in Nicole?
Answer: [($120,000 × .4)- $12,000 - $840 + $1,500] = $36,660
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Consolidation of Financial Information
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/71114
Sample Questions
Q1) Chapel Hill Company had common stock of $350,000 and retained earnings of $490,000.Blue Town Inc.had common stock of $700,000 and retained earnings of $980,000.On January 1,2018,Blue Town issued 34,000 shares of common stock with a $12 par value and a $35 fair value for all of Chapel Hill Company's outstanding common stock.This combination was accounted for using the acquisition method.Immediately after the combination,what was the amount of total consolidated net assets?
A)$2,520,000.
B)$1,190,000.
C)$1,680,000.
D)$2,870,000.
E)$2,030,000.
Answer: D
Q2) Compute the investment to be recorded at the date of acquisition.
A)$1,750.
B)$1,755.
C)$1,725.
D)$1,760.
E)$1,765.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Consolidations - Subsequent to the Date of Acquisition
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/71113
Sample Questions
Q1) Compare the differences in accounting treatment for goodwill between U.S.GAAP and IFRS.
Answer: Both U.S.GAAP and IFRS require goodwill recognition in business combinations in which the fair value of the consideration paid is more than the net fair value of the assets and liabilities assumed.Following acquisition,an assessment for goodwill impairment is required at least annually under both sets of standards.If there are indicators that reflect a possible impairment,the assessment is required to be performed more often.Both standards provide that once goodwill impairments are recognized,they will no longer be recoverable.There are differences,however,with respect to the way goodwill impairment is tested for and recognized.Specifically,goodwill allocation,impairment testing,and the determination of impairment loss are different under U.S.GAAP and IFRS.
Q2) Compute the December 31,2020,consolidated land.
A)$220,000.
B)$180,000.
C)$670,000.
D)$630,000.
E)$450,000.
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Consolidated Financial Statements and Outside Ownership
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/71112
Sample Questions
Q1) When consolidating a subsidiary that was acquired on a date other than the first day of the fiscal year,which of the following statements is true of the subsidiary with respect to the presentation of consolidated financial statement information?
A)Pre-acquisition earnings are deducted from consolidated revenues and expenses.
B)Pre-acquisition earnings are added to consolidated revenues and expenses.
C)Pre-acquisition earnings are deducted from the beginning consolidated stockholders' equity.
D)Pre-acquisition earnings are added to the beginning consolidated stockholders' equity.
E)Pre-acquisition earnings are ignored in the consolidated income statement.
Q2) Pennant Corp.owns 70% of the common stock of Scarvens Co.Scarvens' revenues for 2020 totaled $200,000.
Required:
What amount of Scarvens' revenues would be included in the consolidated revenues under the acquisition method of accounting for business combinations?
Q3) What is the noncontrolling interest balance as of December 31,2020?
Q4) Prepare a schedule to determine goodwill,and the amortization and allocation amounts.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Consolidated Financial Statements Intra-Entity
Asset Transactions
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/71111
Sample Questions
Q1) What amount of gain should be reported by Smeder Company relating to the equipment for 2017 prior to making consolidating entries?
A)$36,000.
B)$34,000.
C)$12,000.
D)$10,000.
E)$ 0.
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) Varton Corp.acquired all of the voting common stock of Caleb Co.on January 1,2018.Varton owned some land with a book value of $84,000 that was sold to Caleb for its fair value of $120,000.How should this transfer be accounted for by the consolidated entity?
Q4) How is the gain on an intra-entity transfer of a depreciable asset recognized?
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Variable Interest Entities, Intra-Entity Debt,
Consolidated Cash Flows, and Other Issues
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/71110
Sample Questions
Q1) On January 1,2019,Cocker reacquired 8,000 of the outstanding shares of its own common stock for $34 per share.None of these shares belonged to Popper.How would this transaction have affected the additional paid-in capital of the parent company?
A)$0.
B)Decrease it by $32,900.
C)Decrease it by $45,700.
D)Decrease it by $23,100.
E)Decrease it by $50,500.
Q2) What would Knight Co.report as consolidated diluted earnings per share (rounded)?
A)$4.00.
B)$)4.71
C)$8.71.
D)$5.89.
E)$6.37.
Q3) What are the primary sources of information that are used for preparation of a consolidated statement of cash flows?
Q4) Prepare all consolidation entries for 2018.
Q5) Prepare Panton's journal entry to recognize the impact of this transaction.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
Available Study Resources on Quizplus for this Chatper
99 Verified Questions
99 Flashcards
Source URL: https://quizplus.com/quiz/71109
Sample Questions
Q1) What amount of foreign exchange gain or loss should be recorded on January 30?
A)$1,516 gain.
B)$1,516 loss.
C)$575 loss.
D)$500 loss.
E)$500 gain.
Q2) What was the net impact on Mattie's 2018 income as a result of this fair value hedge of a firm commitment?
A)$1,800.00 decrease.
B)$1,760.60 decrease.
C)$2,240.40 decrease.
D)$1,660.40 increase.
E)$2,240.60 increase.
Q3) How does a foreign currency forward contract differ from a foreign currency option?
Q4) What is the purpose of a hedge of foreign exchange risk?
Q5) What amount will Coyote Corp.report in its 2018 balance sheet for Accounts receivable?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Q6) What happens when a U.S.company purchases goods denominated in a foreign currency and the foreign currency appreciates?
Chapter 8: Translation of Foreign Currency Financial
Available Study Resources on Quizplus for this Chatper
96 Verified Questions
96 Flashcards
Source URL: https://quizplus.com/quiz/71108
Sample Questions
Q1) When using the current rate method,the translation adjustment from translating a foreign subsidiary's financial statements should be shown as
A)An asset or liability (depending on the balance)in the consolidated balance sheet.
B)A revenue or expense (depending on the balance)in the consolidated income statement.
C)A component of stockholders' equity in the consolidated balance sheet.
D)A component of cash flows from financing activities in the consolidated statement of cash flows.
E)An element of the notes which accompany the consolidated financial statements.
Q2) Assume the functional currency is the Euro;compute the U.S.income statement amount for depreciation expense for 2018.
A)$8,190.
B)$8,370.
C)$8,820.
D)$9,090.
E)$8,550.
Q3) Prepare a balance sheet for this subsidiary in stickles and then translate the amounts into U.S.dollars.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Partnerships: Formation and Operation
Available Study Resources on Quizplus for this Chatper
89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/71107
Sample Questions
Q1) What was the remainder portion of net income allocated to Nolan for 2018?
A)$45,440.
B)$58,040.
C)$70,040.
D)$72,000.
E)$82,040.
Q2) The partnership contract for Hanes and Jones LLP provides that Hanes is to receive a bonus of 20% of net income (after the bonus)and that the remaining net income is to be divided equally.If the partnership income before the bonus for the year is $57,600,Hanes' share of this pre-bonus income is:
A)$28,800.
B)$33,600.
C)$34,560.
D)$35,520.
E)$38,400.
Q3) Determine the amount of net income allocated to each partner for 2018.(Round all calculations to the nearest whole dollar).
Q4) Under what circumstances does a partner's balance in his or her capital account have practical consequences for the partner?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Partnerships: Termination and Liquidation
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/71117
Sample
Questions
Q1) What financial report would be prepared for a partnership that has begun liquidation but has not yet completed the process? What is the purpose of this report?
Q2) What accounting transactions are not recorded by an accountant during partnership liquidation?
A)The conversion of partnership assets into cash.
B)The allocation of gains and losses from sales of assets.
C)The payment of liabilities and expenses.
D)The initiation of legal action by creditors of the partnership.
E)Write-off of remaining unpaid debts.
Q3) Which one of the following statements is true for a predistribution plan?
A)The first available $16,000 would go to Newman.
B)The first available $20,000 would go to Dancey.
C)The first available $8,000 would go to Jahn.
D)The first available $8,000 would go to Newman.
E)The first available $4,000 would go to Jahn.
Q4) What events or circumstances might force the termination of a partnership and liquidation of its assets?
Q5) What should occur when a solvent partner has a deficit balance?
Q6) What is a safe cash payment?
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Accounting for State and Local Governments,
part I
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/71116
Sample Questions
Q1) Which group of government financial statements reports all revenues and all costs as well as all assets and liabilities of the governmental entity?
A)GAAP-based Financial Statements
B)Fund financial Statements.
C)Governmental fund financial statements.
D)Government-wide financial statements.
E)General fund financial statements.
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) Prepare the journal entry and identify the fund to record Simple City's purchase order of two trucks for $100,000.Identify the fund in which the entry is recorded.
Q4) What is the purpose of fund financial statements?
Q5) When should property taxes be recognized under modified accrual accounting?
Q6) What are the four fiduciary fund types?
Q7) What is the definition of the term fund?
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Accounting for State and Local Governments, part II
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/71115
Sample Questions
Q1) What information is required in the financial section of a state or local government's CAFR?
Q2) Which item is not included on the government-wide Statement of Activities?
A)Revenues.
B)Expenses.
C)Assets.
D)Operating grants.
E)Capital contributions.
Q3) Which statement is false regarding the government-wide Statement of Net Position?
A)Noncurrent liabilities are presented separately from current liabilities.
B)Assets are reported excluding capital assets.
C)Capital assets are reported net of depreciation.
D)Investments are reported at fair value rather than historical cost.
E)Discretely presented component units are grouped and shown on the right of the total.
Q4) What three criteria must be met before a governmental unit can elect to not capitalize and therefore report a work of art or historical treasure as an asset?
Q5) Prepare a Statement of Net Position at December 31,2018.
To view all questions and flashcards with answers, click on the resource link above. Page 14