Graduate Financial Accounting Test
Bank
Course Introduction
Graduate Financial Accounting provides an in-depth exploration of the principles, concepts, and standards that govern the preparation and interpretation of financial statements in corporate settings. The course examines advanced topics such as revenue recognition, accounting for mergers and acquisitions, consolidated financial statements, international accounting standards, and the application of financial accounting theory to complex business transactions. Through case studies, problem-solving exercises, and analysis of real-world financial reports, students develop critical skills in evaluating accounting information for decision-making, compliance, and strategic planning in a global business environment.
Recommended Textbook
Advanced Accounting Global 12th Edition by
Floyd A. Beams
Available Study Resources on Quizplus
23 Chapters
894 Verified Questions
894 Flashcards
Source URL: https://quizplus.com/study-set/3524
Page 2
Chapter 1: Business Combinations
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/69981
Sample Questions
Q1) Durer Inc. acquired Sea Corporation in a business combination and Sea Corp went out of existence. Sea Corp developed a patent listed as an asset on Sea Corp's books at the patent office filing cost. In recording the combination,
A) fair value is not assigned to the patent because the research and development costs have been expensed by Sea Corp.
B) Sea Corp's prior expenses to develop the patent are recorded as an asset by Durer at purchase.
C) the patent is recorded as an asset at fair market value.
D) the patent's market value increases goodwill.
Answer: C
Q2) With respect to goodwill, an impairment
A) will be amortized over the remaining useful life.
B) is a two-step process which first compares book value to fair value at the business reporting unit level.
C) is a one-step process considering the entire firm.
D) occurs when asset values are adjusted to fair value in a purchase.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Stock Investments - Investor Accounting and Reporting
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/69976
Sample Questions
Q1) Jacana Corporation paid $200,000 for a 25% interest in Lilypad Corporation's common stock on January 1, 2013, but was not able to exercise significant influence over Lilypad. During 2014, Jacana reported income of $120,000, excluding its income from Lilypad, and paid dividends of $50,000. Lilypad reported net income of $40,000 during 2014 and paid dividends of $20,000. Jacana should report net income for 2014 in the amount of
A) $115,000.
B) $120,000.
C) $125,000.
D) $130,000.
Answer: C
Q2) The income from an equity method investee is reported on one line of the investor company's income statement except when
A) the cost method is used.
B) the investee has extraordinary items.
C) the investor company is amortizing cost-book value differentials.
D) the investor company changes from the cost to the equity method.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: An Introduction to Consolidated Financial Statements
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/69975
Sample Questions
Q1) On June 1, 2014, Puell Company acquired 100% of the stock of Sorrell Inc. On this date, Puell had Retained Earnings of $100,000 and Sorrell had Retained Earnings of $50,000. On December 31, 2014, Puell had Retained Earnings of $120,000 and Sorrell had Retained Earnings of $60,000. The amount of Retained Earnings that appeared in the December 31, 2014 consolidated balance sheet was
A) $120,000.
B) $130,000.
C) $170,000.
D) $180,000.
Answer: A
Q2) A subsidiary can be excluded from consolidation if
A) control does not rest with the majority owner.
B) the subsidiary is in legal reorganization.
C) the subsidiary is operating under severe foreign-exchange restrictions.
D) All of the above are correct.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Consolidated Techniques and Procedures
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/69974
Sample Questions
Q1) Which one of the following will increase consolidated retained earnings?
A) An increase in the value of goodwill associated with a subsidiary subsequent to the parent's date of acquisition
B) The amortization of a $10,000 excess in the fair value of a note payable over its recorded book value
C) The depreciation of a $10,000 excess in the fair value of equipment over its recorded book value
D) The sale of inventory by a subsidiary that had a $10,000 excess in fair value over recorded book value on the parent's date of acquisition
Q2) A parent corporation owns 55% of the outstanding voting common stock of one domestic subsidiary. The parent has control over the subsidiary. Which of the following statements is correct?
A) The parent corporation must prepare consolidated financial statements for the economic entity.
B) The parent corporation must use the fair value method.
C) The parent company may use the equity method but the subsidiary cannot be consolidated.
D) The parent company can use the equity method or the fair value/cost method.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Intercompany Profit Transactions Inventories
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69973
Sample Questions
Q1) Phast Corporation owns a 80% interest in Stechno Company, acquired several years ago at a cost equal to book value and fair value. Stechno sells merchandise to Phast for the first time in 2014, and some is unsold at December 31, 2014. In computing income from the investee for 2014 under the equity method, Phast uses which equation?
A) 80% of Stechno's income less 100% of the unrealized profit in Phast's ending inventory
B) 80% of Stechno's income plus 100% of the unrealized profit in Phast's ending inventory
C) 80% of Stechno's income less 80% of the unrealized profit in Phast's ending inventory
D) 80% of Stechno's income plus 80% of the unrealized profit in Phast's ending inventory
Q2) If the sale referred to above was a downstream sale, by what amount must Inventory on the consolidated balance sheet be reduced to reflect the correct balance as of the end of 2014?
A) $3,000
B) $10,000
C) $14,000
D) $20,000
To view all questions and flashcards with answers, click on the resource link above.
7
Chapter 6: Intercompany Profit Transactions Plant Assets
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/69972
Sample Questions
Q1) In the eliminating/adjusting entries on consolidation working papers for 2014, the Truck account was
A) debited for $3,000.
B) credited for $3,000.
C) debited for $15,000.
D) credited for $15,000.
Q2) Plock Corporation, the 75% owner of Seraphim Company, reported net income of $400,000 in 2013, prior to recording any income from Seraphim. Seraphim reported net income for that same year of $80,000 on their stand-alone statements. During 2013, an intercompany sale of a vehicle resulted in a gain of $4,000, and the vehicle was assumed to have a four-year remaining useful life. The vehicle has no salvage value. Straight-line depreciation is used.
Required:
1. Assuming that the vehicle transfer was downstream, calculate Plock's consolidated net income for 2013, and controlling share of consolidated net income for 2013.
2. Assuming that the vehicle transfer was upstream, calculate Plock's consolidated net income for 2013, and controlling share of consolidated net income for 2013.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Intercompany Profit Transactions Bonds
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69971
Sample Questions
Q1) If an affiliate purchases bonds in the open market, the book value of the intercompany bond liability at the time of purchase is
A) always assigned to the parent company because it has control.
B) the par value of the bonds less the unamortized discount or plus the unamortized premium.
C) par value.
D) the par value of the bonds plus the unamortized discount or less the unamortized premium.
Q2) There are several theories for allocating constructive gains or losses between purchasing and issuing affiliates. The Agency Theory
A) does so based on the par value of the bonds purchased.
B) assigns the entire constructive gain or loss to the parent based on their control of the decision to purchase the bonds.
C) assigns the entire constructive gain or loss to the subsidiary based on the need to have the noncontrolling interest share in the retirement of the debt.
D) assigns the entire constructive gain or loss to whichever company issued the bonds.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Consolidations - Changes in Ownership
Interests
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/69970
Sample Questions
Q1) Which of the following is correct? The direct sale of additional shares of stock at book value per share to only the parent company from a subsidiary
A) decreases the parent's interest and decreases the noncontrolling shareholders' interest.
B) decreases the parent's interest and increases the noncontrolling shareholders' interest.
C) increases the parent's interest and increases the noncontrolling shareholders' interest.
D) increases the parent's interest and decreases the noncontrolling shareholders' interest.
Q2) Assume that Penguin sold the additional 3,000 shares to outside interests for $150,000 on January 2, 2014. Giant's percentage ownership immediately after the sale of additional stock would be
A) 66-2/3%.
B) 75%.
C) 80%.
D) 83-1/3%.
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Indirect and Mutual Holdings
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/69969
Sample Questions
Q1) The net income reported for Pahm Corporation for the current year is
A) $504,800.
B) $516,800.
C) $545,200.
D) $557,200.
Q2) The amount of noncontrolling interest share for the current year is
A) $69,000.
B) $85,000.
C) $95,000.
D) $99,000.
Q3) When mutually-held stock involves subsidiaries holding the stock of each other, the ________ method is not used.
A) equity
B) cost
C) conventional
D) treasury stock
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Subsidiary Preferred Stock, Consolidated
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/69991
Sample Questions
Q1) Palm owns a 70% interest in Sable, a domestic subsidiary. Sable is not part of Palm's affiliated group. Palm will pay taxes on
A) none of the dividends it receives from Sable.
B) 20% of the dividends it receives from Sable.
C) 66% of the dividends it receives from Sable.
D) 80% of the dividends it receives from Sable.
Q2) How much should the Parminter's Investment in Sanchez-Common Stock, change during 2014?
A) $5,000
B) $20,000
C) $25,000
D) $30,000
Q3) For the year ending December 31, 2014, the amount of Pamplin's income from Sage (associated with the common stock investment in Sage) is
A) $32,400.
B) $36,000.
C) $60,000.
D) $90,000.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Consolidation Theories, Push-Down Accounting, and Corporate Joint Ventures
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/69990
Sample Questions
Q1) Under the parent company theory, what amount of goodwill was reported on the consolidated balance sheet at December 31, 2014?
A) $148,000
B) $153,000
C) $154,400
D) $160,000
Q2) Noncontrolling interest share was reported in the 2014 consolidated income statement at
A) $5,000.
B) $6,000.
C) $8,000.
D) $10,000.
Q3) Under parent company theory, noncontrolling interest is classified on the consolidated balance sheet as ________. Under entity theory, noncontrolling interest is classified on the consolidated balance sheet as ________.
A) stockholders' equity; stockholders' equity
B) stockholders' equity; liability
C) liability; a liability
D) liability; stockholders' equity
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Derivatives and Foreign Currency: Concepts and Common Transactions
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69989
Sample Questions
Q1) A U.S. importer that purchased merchandise from a South Korean firm would be exposed to a net exchange gain on the unpaid balance if the
A) dollar weakened relative to the Korean won and the won was the denominated currency.
B) dollar weakened relative to the Korean won and the dollar was the denominated currency.
C) dollar strengthened relative to the Korean won and the won was the denominated currency.
D) dollar strengthened relative to the Korean won and the dollar was the denominated currency.
Q2) A direct quote for the U.S. dollar is given at $1.45 per 1 foreign currency unit (fcu). The respective indirect quote for the U.S. dollar would be reported as
A) 1.45 fcu = $1.00.
B) 1.45 fcu = $.6897.
C) .6897 fcu = $1.00.
D) 1.00 fcu = $1.45.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Accounting for Derivatives and Hedging Activities
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69988
Sample Questions
Q1) If a financial instrument is classified as a cash flow hedge, then
A) its gains or losses are reported in the income statement if a fiscal year-end occurs before the settlement date.
B) it is classified as a held-to-maturity asset.
C) it does not require a notional amount.
D) its gains or losses are reported in the balance sheet if a fiscal year-end occurs before the settlement date.
Q2) What is the fair value of the forward contract at March 1?
A) $-0-
B) $1,654.97 asset
C) $1,654.97 liability
D) $1,680 asset
Q3) A forward contract used as a cash flow hedge will be recorded as an asset if
A) the holder is expecting to receive a payment as a result of the contract.
B) the holder is accounting for the hedged instrument as a fair value hedge.
C) the holder is hedging the net investment in a foreign entity.
D) the holder is using the alternate accounting method and deferring all gains or losses from the hedge.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Foreign Currency Financial Statements
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/69987
Sample Questions
Q1) Accounts representing an allowance for uncollectible accounts are converted into U.S. dollars at
A) historical rates when the U.S. dollar is the functional currency.
B) current rates only when the U.S. dollar is the functional currency.
C) historical rates regardless of the functional currency.
D) current rates regardless of the functional currency.
Q2) At the time of a business acquisition,
A) identifiable assets and liabilities are allocated the portion of the translation or remeasurement adjustment that existed on the date of acquisition.
B) a foreign entity's assets and liabilities are translated into U.S. dollars using the current exchange rate in effect on that date.
C) the difference between investment fair value and translated net assets acquired is treated as a remeasurement gain or loss on the income statement.
D) the difference between investment fair value and translated net assets acquired is recorded as a cumulative translation adjustment on the balance sheet.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Segment and Interim Financial Reporting
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69986
Sample Questions
Q1) An enterprise has eight reporting segments. Five segments show an operating profit and three segments show an operating loss. In determining which segments are classified as reporting segments under the operating profits test, which of the following statements is correct?
A) The test value for all segments is 10% of consolidated net profit.
B) The test value for profitable segments is 10% or more of those segments reporting a profit, and the test value for loss segments is 10% or more of those segments reporting a loss.
C) The test value for loss segments is 10% of the greater of (a) the absolute value of the sum of those segments reporting losses, or (b) 10% of consolidated net profit.
D) The test value for all segments is 10% of the greater of (a) the absolute value of the sum of those segments reporting profits, or (b) the absolute value of the sum of those segments reporting losses.
Q2) What is the threshold for reporting a major customer?
A) 5 percent of revenues
B) 5 percent of profits
C) 10 percent of revenues
D) 10 percent of profits
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 16: Partnerships - Formation, Operations, and Changes in Ownership Interests
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69985
Sample Questions
Q1) What is the total amount for the allocation of interest, salary, and bonus, and how much over-allocation is present?
A) $180,000 and $0
B) $240,000 and $60,000
C) $249,000 and $0
D) $249,000 and $69,000
Q2) By how much will the capital accounts of Lemon, Mango, and Nobb increase, respectively, due to the revaluation of the assets and the recognition of goodwill?
A) The capital accounts will increase by $50,000 each.
B) The capital accounts will increase by $60,000 each.
C) $36,000, $54,000, and $90,000
D) $40,000, $50,000, and $60,000
Q3) If the average capital for Bertram and Ernest from the above information is $224,000 and $238,000, respectively, what will be the total amount of profit allocated to salary and interest distributions?
A) $ 93,800
B) $146,200
C) $218,200
D) $240,000
18
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Partnership Liquidation
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69984
Sample Questions
Q1) Using a safe payments schedule, how much cash should Melvin receive in the first distribution?
A) $ 81,000
B) $165,000
C) $168,600
D) $202,500
Q2) If all partners are included in the first installment of an installment liquidation, then in future installments
A) cash will be distributed according to the residual profit and loss sharing ratios.
B) cash should not be distributed until all non-cash assets are converted into cash.
C) vulnerability rankings for each partner should be prepared.
D) a cash distribution plan must be prepared so that partners will know when they will be included in cash distributions.
Q3) A cash distribution plan for the Sammi, Tammy, and Udd partnership was as follows:
To view all questions and flashcards with answers, click on the resource link above.
19
Chapter 18: Corporate Liquidations and Reorganizations
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/69983
Sample Questions
Q1) What is an advantage of filing a Chapter 11 petition?
A) The continuation of interest accrual on liabilities
B) Restrictions imposed by the bankruptcy court on day-to-day transactions
C) It is less costly than filing Chapter 7.
D) The opportunity to cancel unfavorable contracts
Q2) In a Chapter 7 bankruptcy case, what is the first-to-last ranking order of priority for payment? (Use the following list of claim types.) I. stockholder claims
II) unsecured priority claims
III) secured claims
IV) unsecured nonpriority claims
A) I, II, IV, and III
B) III, II, IV, and I
C) III, I, IV, and II
D) II, IV, III, and I
Q3) Ohio Corporation is being liquidated under Chapter 7 of the Bankruptcy Act. The trustee has determined that the unsecured claims will receive $.05 on the dollar. Lender Bank holds a $100,000 mortgage note receivable from Ohio that is secured by equipment with a $120,000 book value and a $90,000 fair value, and a second mortgage on the same equipment amounting to $50,000.
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 19: An Introduction to Accounting for State and Local Governmental Units
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/69982
Sample Questions
Q1) Government-wide financial statements include a
A) balance sheet, an income statement, and a statement of cash flows.
B) statement of net assets, a statement of activities, and a statement of cash flows.
C) statement of net position and a statement of activities.
D) statement of activities and a statement of cash flows.
Q2) The following are transactions for the city of Clinton.
a. Borrowed $100,000 by issuing a one-year, 5% note, three months before year-end.
b. Accrued interest at year end, but did not pay the interest at year end.
c. Charges for services rendered of $2,500 were billed and collected immediately.
d. Incurred salary costs of $5,000, unpaid.
Required:
Analyze the above transactions by using the accounting equation for a governmental fund.
To view all questions and flashcards with answers, click on the resource link above.
21
Chapter 20: Accounting for State and Local Governmental Units
- Governmental Funds
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/69980
Sample Questions
Q1) Old West City had the following transactions in fiscal 2014. Assume that all expenditures were properly appropriated in the fiscal 2014 budget.
1. A six-month loan was made to the special revenue fund from the general fund amounting to $28,000.
2. A purchase order for landscaping maintenance services was issued in the amount of $43,000.
3. A $10,000 nonreciprocal transfer was made to the debt service fund to pay interest amounts outstanding.
4. The final invoice for landscaping maintenance was received in the amount of $39,000, and it was scheduled to be paid in 30 days.
5. The city enters into a capital lease of fixed assets for the general government. The present value of the minimum lease payments equals $70,000.
Required:
Prepare the journal entries for the General Fund.
To view all questions and flashcards with answers, click on the resource link above.
22
Chapter 21: Accounting for State and Local Governmental Units
- Proprietary and Fiduciary Funds
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/69979
Sample Questions
Q1) Interest payments on loans outstanding that do not relate to acquiring, constructing or improving capital assets are classified as ________ on the cash flow statement for an Enterprise Fund.
A) Cash Flows from Operating Activities
B) Cash Flows from Noncapital Financing Activities
C) Cash Flows from Capital and Related Financing Activities
D) Cash Flows from Investing Activities
Q2) What is a significant difference for agency funds when compared to governmental funds?
A) An agency fund has a separate ledger.
B) An agency fund does not report revenues.
C) Agency funds are not associated with any governmental unit.
D) An agency fund will not balance because there is no fund balance account.
Q3) The trust fund for a school library is required to prepare financial statements that include
A) Balance Sheet and Income Statement.
B) Statement of Revenues, Expenses and Changes in Fiduciary Net Assets.
C) Statement of Fund Balance and Statement of Changes in Fund Balance.
D) Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position.
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Accounting for Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/69978
Sample Questions
Q1) An alumnus made a donation of adjoining land to a not-for-profit, nongovernmental university. The donor made no specifications regarding the time period or use of the land. The university would record the gift as
A) an endowment asset.
B) temporarily restricted revenue.
C) unrestricted revenue.
D) permanently restricted support.
Q2) For nonprofit, nongovernmental organizations, unconditional promises to give that include promises of payments due in future periods (next year or later) are reported as
A) unrestricted revenues.
B) unrestricted support.
C) deferred revenues until payment is received.
D) restricted support.
Q3) Voluntary health and welfare organizations
A) may not have paid executives or staff.
B) are governed by separate GASB statements.
C) use fund accounting, following the rules for proprietary fund reporting.
D) are supported by, and provide voluntary services to, the public.
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Estates and Trusts
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/69977
Sample Questions
Q1) Which of the following phrases is frequently used to refer to estate or trust accounting?
A) Non-profit accounting
B) Testamentary accounting
C) Fiduciary accounting
D) All of the above phrases are used to refer to estate or trust accounting.
Q2) Under the Uniform Probate Code, the term "personal representative" refers to which of the following?
A) An executor, but not an administrator
B) An administrator, but not an executor
C) Neither an executor nor an administrator
D) Either an executor or an administrator
Q3) Under the Uniform Probate Code, the personal representative must inform the heirs and devisees of his or her appointment and provide other selected information within how many days of the appointment?
A) 10 days
B) 20 days
C) 30 days
D) 60 days
To view all questions and flashcards with answers, click on the resource link above.
Page 25