Chapter 4: A: Consolidated Financial Statements and Outside Ownership
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Sample Questions
Q1) Determine the amount of the noncontrolling interest as of the date of the acquisition.
Q2) Compute the noncontrolling interest in Demers at December 31, 2020.
A) $126,000.
B) $106,000.
C) $109,200.
D) $149,600.
E) $148,200.
Q3) Compute Pell's income from Demers for the year ended December 31, 2021.
A) $50,400.
B) $56,000.
C) $98,400.
D) $97,000.
E) $104,000.
Q4) Using the acquisition method, determine the amount of goodwill associated with Caldwell's purchase of Club.
Q5) What is pre-acquisition income?
Q6) Why is it important to know if the parent paid a premium to acquire control of a subsidiary?
Page 10
Q7) Determine the amount of goodwill to be recognized in this acquisition.
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Chapter 5: Consolidated Financial Statements Intra-Entity
Asset Transactions
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Q1) Hambly Corp.owned 80% of the voting common stock of Stroban Co.During 2018, Stroban sold a parcel of land to Hambly.The land had a book value of $82,000 and was sold to Hambly for $145,000.Stroban's reported net income for 2018 was $119,000.Required:
Assuming there are no other intra-entity transactions nor excess amortizations, What was the net income attributable to the noncontrolling interest of Stroban?
Q2) Which of the following will be included in a consolidation entry for 2018?
A) Debit retained earnings for $5,000.
B) Credit retained earnings for $5,000.
C) Debit investment in subsidiary for $5,000.
D) Credit investment in subsidiary for $5,000.
E) Credit land for $5,000.
Q3) Assume the same information, except Shannon sold inventory to Patti.Compute consolidated sales.
A) $10,000,000.
B) $10,126,000.
C) $10,140,000.
D) $10,200,000.
E) $10,260,000.
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Chapter 5: A: Consolidated Financial Statements
Intra-Entity Asset Transactions
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Q1) For consolidation purposes, what net debit or credit will be made for the year 2017 relating to the accumulated depreciation for the equipment transfer?
A) Debit accumulated depreciation, $46,000.
B) Debit accumulated depreciation, $48,000.
C) Credit accumulated depreciation, $48,000.
D) Credit accumulated depreciation, $46,000.
E) Debit accumulated depreciation, $2,000.
Q2) Assuming there are no excess amortizations or other intra-entity transactions, compute income from Stiller on Leo's books for 2018.
A) $140,000.
B) $ 97,000.
C) $125,000.
D) $100,000.
E) $112,000.
Q3) Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2017.
Q4) How does a gain on an intra-entity transfer of equipment affect the calculation of a noncontrolling interest?
Page 12
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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) Stevens Company has had bonds payable of $10,000 outstanding for several years.On January 1, 2018, when there was an unamortized discount of $2,000 and a remaining life of 5 years, its 80% owned subsidiary, Matthews Company, purchased the bonds in the open market for $11,000.The bonds pay 6% interest annually on December 31.The companies use the straight-line method to amortize interest revenue and expense.Compute the consolidated gain or loss on a consolidated income statement for 2018.
A) $1,000 gain.
B) $1,000 loss.
C) $2,000 loss.
D) $3,000 loss.
E) $3,000 gain.
Q2) What would Knight Co.report as consolidated basic earnings per share (rounded)?
A) $6.37
B) $6.40
C) $7.00
D) $5.68
E) $6.00
Q3) What was Kuried's balance in the Investment in Thomas Inc.account as of December 31, 2018?
Page 13
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Chapter
Consolidated Cash Flows, and Other Issues
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Q1) Using the indirect method, where does the decrease in accounts payable appear in a consolidated statement of cash flows?
A) $7,000 increase to net income as an operating activity.
B) $7,000 decrease to net income as an operating activity.
C) $5,600 increase to net income as an operating activity.
D) $5,600 decrease to net income as an operating activity.
E) $7,000 increase as a financing activity.
Q2) Prepare Panton's journal entry to recognize the impact of this transaction.
Q3) The consolidation entry at date of acquisition will include (referring to Smith):
A) Debit Common stock $500,000 and debit Preferred stock $120,000.
B) Debit Common stock $400,000 and debit Additional paid-in capital $160,000.
C) Debit Common stock $500,000 and debit Preferred stock $300,000.
D) Debit Common stock $500,000, debit Preferred stock $120,000, and debit Additional paid-in capital $200,000.
E) Debit Common stock $400,000, debit Preferred stock $300,000, debit Additional paid-in capital $200,000, and debit Retained earnings $500,000.
Q4) What is the amount of goodwill resulting from this acquisition?
Q5) Prepare Panton's journal entry to recognize the impact of this transaction.
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Chapter 7: Consolidated Financial Statements - Ownership
Patterns and Income Taxes
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Q1) What are the essential criteria for including a subsidiary within an affiliated group?
Q2) D Corp.had investments, direct and indirect, in several subsidiaries: -E Co.is a domestic firm in which D Corp.owned a 90% interest
-F Co.is a domestic firm in which D Corp.owned 60% and E Co.owned 30%
-G Co.is a domestic firm wholly owned by E Co.
-H Co.is a foreign subsidiary in which D Corp.owned a 90% interest
-I Co.is a domestic firm in which D Corp.owned 50% and G Co.owned 25%
Which of these subsidiaries may be included in a consolidated income tax return?
A) E, F, G, H, and I.
B) E, G, H, and I.
C) E and F.
D) E, F, G, and H.
E) E, F, and G.
Q3) The accrual-based net income of East Co.is calculated to be
A) $401,100.
B) $510,000.
C) $551,000.
D) $573,000.
E) $615,000.
Page 15
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Chapter 7: A: Consolidated Financial Statements -
Ownership Patterns and Income Taxes
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Sample Questions
Q1) When indirect control is present, which of the following statements is true?
A) At least one company within the consolidated entity holds a parent and a subsidiary relationship.
B) The parent company owns a percent of subsidiary and subsidiary owns a percent of the parent.
C) Consolidated financial statements are required for only one subsidiary.
D) Recognition of income for an indirectly owned subsidiary is ignored.
E) Only dividend income is recognized for an indirectly owned subsidiary.
Q2) Compute the income tax liability of White for 2018.
A) $93,600.
B) $91,350.
C) $94,500.
D) $90,900.
E) $90,000.
Q3) Required:
Determine the accrual-based net income of Mace Co for the year 2018.
Q4) X Co.owned 80% of Y Corp., and Y Corp.owned 15% of X Co.Under the treasury stock approach, how would the dividends paid by X Co.to Y Corp.be handled on a consolidation worksheet?
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Q5) What are the benefits or advantages of filing a consolidated income tax return?
Chapter 8: Segment and Interim Reporting
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Q1) Why are publicly traded companies in the U.S.required to publish quarterly financial statements?
Q2) Which of the following is not correct regarding inventory procedures reported in an interim financial statement?
A) LIFO liquidations a company expects to be replaced by year-end should be recorded in cost of goods sold, quantified at expected replacement cost rather than original LIFO cost.
B) Lower-of-cost-or-net realizable value adjustments are not made for the interim period if they are expected to reverse by the end of the year.
C) Variances in a standard costing system are reported at the end of the interim period unless they are expected to be absorbed by year-end.
D) FIFO is remeasured using the LIFO method in an interim financial statement.
E) LIFO liquidations not expected to be replaced by the end of the year are reflected in cost of goods sold at original LIFO cost.
Q3) What is the purpose of the U.S.GAAP seventy-five percent requirement for industry segment disclosure?
Q4) What is meant by the term: disaggregated financial information?
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Chapter 8: A: Segment and Interim Reporting
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Q1) Which of the segments are separately reportable?
A) DVDs only.
B) DVDs and MP3s.
C) DVDs and VCRs.
D) VCRs and MP3s.
E) DVDs, VCRs, and MP3s.
Q2) What is the appropriate treatment in an interim financial report for a LIFO liquidation?
A) The LIFO liquidation is always ignored for interim reporting.
B) The LIFO liquidation should always be reflected in gross profit on an interim income statement.
C) The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim balance sheet and the interim income statement.
D) The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim income statement but not the interim balance sheet.
E) The LIFO liquidation should only be reflected in gross profit on an interim income statement if it is determined that it will not be replaced by year-end.
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Chapter 9: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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Q1) Compute the fair value of the foreign currency option at February 1, 2019.
A) $6,000.
B) $4,500.
C) $3,000.
D) $7,500.
E) $1,500.
Q2) What is the amount of Adjustment to Accumulated Other Comprehensive Income for 2019 from these transactions?
A) $1,000.
B) $1,600.
C) $1,800.
D) $2,000.
E) $2,600.
Q3) How is the fair value of a Forward Contract determined by U.S.GAAP?
Q4) Yelton Co.just sold inventory for 80,000 euros, which Yelton will collect in sixty days.Briefly describe a hedging transaction Yelton could engage in to reduce its risk of unfavorable exchange rates.
Q5) How does a foreign currency forward contract differ from a foreign currency option?
Q6) What is meant by the spot rate?
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Chapter 9: A: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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Q1) How much foreign exchange gain or loss should be included in Shannon's 2018 income statement?
A) $1,000 gain.
B) $1,000 loss.
C) $2,000 gain.
D) $2,000 loss.
E) $8,000 loss.
Q2) All of the following data points are needed to determine the fair value of a forward contract (at any point), EXCEPT
A) The forward rate when the forward contract was entered into.
B) The current forward rate for a contract that matures on the same date as the forward contract entered into.
C) The forward rate for a contract that has the same duration as the forward contract entered into.
D) A discount rate which is typically the company's incremental borrowing rate.
E) A future rate which is typically the company's incremental borrowing rate.
Q3) Assuming this is a cash flow hedge; prepare journal entries for this sales transaction and forward contract.
Q4) How is the fair value of a Forward Contract determined by U.S.GAAP?
Page 20
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Chapter 10: Translation of Foreign Currency Financial Statements
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Q1) Under the temporal method, retained earnings would be remeasured at what rate?
A) Beginning of the year rate.
B) Average rate.
C) Current rate.
D) Historical rate.
E) Composite amount.
Q2) What amount would have been reported for cost of goods sold on Porter's consolidated income statement at December 31, 2018?
A) $24,000.
B) $26,400.
C) $22,800.
D) $27,600.
E) $28,800.
Q3) What exchange rate would be used to translate the asset and liability account balances of a foreign subsidiary when the local currency is the functional currency? What justification can be given for using this exchange rate?
Q4) Contrast the purpose of remeasurement with the purpose of translation.
Q5) Prepare a statement of retained earnings for this subsidiary in stickles and then translate the amounts into U.S.dollars.
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Chapter 10: A: Translation of Foreign Currency Financial Statements
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Q1) Under the current rate method, property, plant & equipment would be translated at what rate?
A) Beginning of the year rate.
B) Average rate.
C) Current rate.
D) Historical rate.
E) Composite amount.
Q2) How can a parent corporation determine the functional currency for a foreign subsidiary that conducts business in more than one country?
Q3) Under the current rate method, common stock would be translated at what rate?
A) Beginning of the year rate.
B) Average rate.
C) Current rate.
D) Historical rate.
E) Composite amount.
Q4) Required:
Assume that Boerkian was a foreign subsidiary of a U.S.multinational company and the local currency of the subsidiary (stickle) is the functional currency.On the December 31, 2018 balance sheet, what was the translated value of the Land account?
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Chapter 11: Worldwide Accounting Diversity and International Accounting Standards
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Q1) In the conversion from U.S.GAAP financial statements to IFRS financial statements, what is the amount of adjustment needed to adjust for the difference in accounting for a provision for loss contingency?
A) $0
B) $50,000
C) $100,000
D) $150,000
E) $200,000
Q2) Prepare the journal entry for the 2017 depreciation expense for Dowa, Ltd.based on IFRS accounting principles.
Q3) Which of the following is not an example of IFRS simplified for SMEs?
A) All borrowing costs are expensed as incurred.
B) All development costs are expensed as incurred.
C) Goodwill is amortized over its useful life.
D) There is a choice between using the cost model and the revaluation model for property, plant, and equipment.
E) Actuarial gains and losses for defined benefit plans are recognized immediately.
Q4) What is the significance of the "Norwalk Agreement?"
Page 23
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Chapter 11: A: Worldwide Accounting Diversity and International Accounting Standards
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Q1) Which of the following is not true about IFRS?
A) The IASB does not have the ability to enforce proper usage of IFRS.
B) IFRS is available to any organization or nation that wishes to use those standards.
C) IFRS is a comprehensive set of financial reporting standards.
D) IFRS includes only pronouncements issued by the IASB.
E) IFRS are considered as generally accepted accounting principles.
Q2) Which of the following is not an authoritative pronouncement of International Financial Reporting Standards (IFRSs)?
A) International Financial Reporting Standards issued by the IASB
B) International Accounting Standards issued by the IASC and adopted by the IASB
C) Interpretations issued by the International Financial Reporting Interpretations Committee (IFRICs)
D) International Accounting Principles
E) Interpretations issued by the Standing Interpretations Committee (SICs) and adopted by the IASB
Q3) State the two major types of legal systems used around the world and briefly describe their differences.
Q4) What is the IOSCO?
Page 24
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Chapter 12: Financial Reporting and the Securities and Exchange Commission
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Q1) What Federal agency has Congressional authority to amend, modify, repeal, or reject auditing standards?
Q2) What information is required in proxy statements? (1) Five-year summary of operations.
(2) Five-year summary of industry segments.
(3) Listing of company directors and executive officers.
(4) Management discussion and analysis (MD&A).
A) 1, 2 and 3.
B) 2, 3 and 4.
C) 1, 3 and 4.
D) 1, 2 and 4.
E) 1, 2, 3, and 4.
Q3) Name five securities offerings exempt from registration with the SEC.
Q4) Which one of the following forms is used when no other form is prescribed?
A) S-4.
B) S-3.
C) S-11.
D) S-8.
E) S-1.
Q5) Name the two broad categories of filings with the SEC.
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Chapter 12: A: Financial Reporting and the Securities and Exchange Commission
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Q1) The SEC has usually restricted its role in establishing accounting principles to
A) Specifying the information that should be included in interim financial statements.
B) Developing definitions of key accounting terms.
C) Developing accounting standards for particular industries.
D) Determining required disclosures.
E) The promulgation and issuance of SASs (Securities Accounting Standards).
Q2) What is private placement of securities?
A) A procedure that allows a company to register securities and then sell them over a period of two years without reregistering.
B) A procedure that allows the sale of securities to no more than 35 sophisticated knowledgeable investors, with no general solicitation allowed.
C) A method of filing Form 10-K with the SEC.
D) The registration of mutual funds that engage in investing and trading securities.
E) A sale of securities to no more than 50 accredited investors, with no general solicitation allowed.
Q3) What is a wraparound filing?
Q4) What is a primary focus of the Sarbanes-Oxley Act of 2002?
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Chapter 13: Accounting for Legal Reorganizations and Liquidations
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Q1) Prepare a schedule to show the amount of total liabilities with priority.
Q2) In a statement of financial affairs, assets are classified
A) According to whether they are pledged as collateral in favor of particular creditors.
B) As current or noncurrent.
C) As monetary or nonmonetary.
D) As operating or non-operating.
E) As direct or indirect.
Q3) Which statement is false regarding a plan for reorganization?
A) The plan is the heart of everyChapter 7 bankruptcy.
B) The provisions of the plan specify the treatment of all creditors and equity holders upon approval by the Court.
C) The plan shapes the financial structure of the entity that emerges.
D) The plan may contain numerous provisions as solutions to financial difficulties.
E) The plan may contain provisions for changes in the management of the company.
Q4) Prepare a schedule to show the amount of total assets available to pay liabilities with priority and unsecured creditors.
Q5) What is the difference between a liquidation and a reorganization?
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Chapter 13: A: Accounting for Legal Reorganizations and Liquidations
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Q1) How much will be paid to the holder of the note payable secured by the land and building?
(Round your payout percentage to the nearest whole number.)
Q2) Prepare a schedule to show the amount of total liabilities with priority.
Q3) Which of the following conditions or events does not signal an entity's inability to pay its debts as they become due?
A) Recurring operating losses.
B) Drops in the closing stock prices on a recognized stock exchange.
C) Working capital deficiencies.
D) Loan defaults.
E) Negative cash flows from operating activities.
Q4) What is the role of the trustee in the liquidation of a company?
Q5) What is the difference between a liquidation and a reorganization?
Q6) What is the purpose ofChapter 7 of the Bankruptcy Reform Act?
Q7) Prepare a schedule to show the amount of total liabilities with priority.
Q8) What is meant by a "fully secured liability"?
Q9) To what does the termChapter 7 bankruptcy refer?
Q10) What is the meaning of the phrase debtor in possession? Page 28
Q11) How much will Hampton's creditor of an unsecured accounts payable of $4,000 receive?
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Chapter 14: Partnerships: Formation and Operation
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Q1) Determine the amount of net income allocated to each partner for 2018.(Round all calculations to the nearest whole dollar).
Q2) What was the balance in Eaton's Capital account at the end of the first year?
A) $120,900.
B) $118,300.
C) $126,100.
D) $ 80,600.
E) $111,500.
Q3) What was Thurman's total share of net income for the second year?
A) $17,160 income.
B) $ 4,160 income.
C) $19,760 income.
D) $17,290 income.
E) $28,080 income.
Q4) What was the balance in Young's Capital account at the end of the first year?
A) $120,900.
B) $118,300.
C) $126,100.
D) $ 80,600.
E) $111,500.
Page 30
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Chapter 14: A: Partnerships: Formation and Operation
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Q1) What was Thurman's total share of net income for the second year?
A) $17,160 income.
B) $ 4,160 income.
C) $19,760 income.
D) $17,290 income.
E) $28,080 income.
Q2) Record the journal entry to allocate the salary of Noris.
Q3) What was the balance in Young's Capital account at the end of the first year?
A) $120,900.
B) $118,300.
C) $126,100.
D) $ 80,600.
E) $111,500.
Q4) Under what circumstances does a partner's balance in his or her capital account have practical consequences for the partner?
Q5) Brown and Green are forming a business as partners.If they do not create a formal written partnership agreement, what risks are they exposing themselves to?
Q6) Record the journal entry for the admission of Noris.Goodwill is not to be recorded.
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Chapter 15: Partnerships: Termination and Liquidation
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Q1) Which of the following statements is true concerning the distribution of safe payments?
A) The distribution of safe payments assumes that any capital deficit balances will prove to be a total loss to the partnership.
B) Safe payments are equal to the recorded capital account balances of those partners with capital account balances in excess of $0.
C) The distribution of safe payments may only be made after all liabilities have been paid.
D) In computing safe payments, partners with positive capital account balances are assumed to absorb an equal share of any deficit balance(s).
E) There are no safe payments until the liquidation is complete.
Q2) What is a safe cash payment?
Q3) Develop a predistribution plan for this partnership, assuming $12,000 of liquidation expenses are expected to be paid.
Q4) Prepare the journal entry for Donald, Chief & Berry LLP on August 1, 2018, to recognize proceeds from the sale of Other Assets.
Q5) Prepare the schedule to compute the cash payments to the partners.
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Chapter 15: A: Partnerships: Termination and Liquidation
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Q1) What should occur when a solvent partner has a deficit balance?
Q2) How much of the existing cash balance could be distributed safely to partners at this time?
Q3) 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?
Q4) If the building is sold for $50,000 and there are no liquidation expenses what amount should Harry receive in the final settlement?
A) $ 5,000.
B) $ 9,000.
C) $18,000.
D) $28,000.
E) $55,000.
Q5) Prepare a schedule to calculate the safe payments to be made to the partners at the end of March.
Q6) Record the journal entry for the sale of the noncash assets.
Q7) Prepare the journal entry for Donald, Chief & Berry LLP on August 1, 2018, to recognize proceeds from the sale of Other Assets.
Q8) What is a safe cash payment?
Page 33
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Chapter 16: Accounting for State and Local Governments,
Part I
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Q1) The Town of Anthrop has recorded the receipt of a $60,000 grant restricted for transporting all senior citizens to polling locations on Election Day in November of 2018.The town now spends $60,000 to transport the citizens on Election Day.
Required:
Prepare the journal entry (or entries), and identify the fund for recording, to record that the town spends $60,000 of the grant it received to transport senior citizens on Election Day.
Q2) Annual budgets must be recorded within:
A) The general fund and special revenue funds.
B) Capital projects funds and debt service funds.
C) Enterprise funds and internal service funds.
D) The general fund and pension trust Fund.
E) Agency funds and the general fund.
Q3) What is the definition of the term fund?
Q4) For a government, what kinds of operations are accounted for using a proprietary fund? Give three examples.
Q5) For what is a special revenue fund used to account?
Page 34
Q6) Under modified accrual accounting, when are expenditures recorded?
Q7) What is the purpose of fund financial statements?
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Chapter 16: A: Accounting for State and Local Governments,
Part I
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Q1) Governmental funds are
A) Funds used to account for the activities of a government that are carried out primarily to provide services to citizens.
B) Funds used to account for a government's ongoing organizations and activities that are similar to those operated by for-profit organizations.
C) Funds used to account for monies held by the government in a trustee or agency capacity.
D) Funds used to account for all financial resources except those required to be accounted for in another fund.
E) Funds used to account for resources that are restricted or committed for a specific purpose other than debt payments or capital projects.
Q2) 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?
Q3) When should property taxes be recognized under modified accrual accounting?
Q4) What is the primary difference between monies accounted for in the general fund and monies accounted for in the special revenue fund?
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Chapter 17: Accounting for State and Local Governments,
Part II
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42 Verified Questions
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Source URL: https://quizplus.com/quiz/66023
Sample Questions
Q1) Which of the following is true regarding Management's Discussion and Analysis (MD&A)?
A) MD&A should provide an objective analysis of the financial activities based on currently known facts, decisions, or conditions.
B) MD&A should disclose total assets and liabilities for all substantial component units.
C) Management should provide a cash flow projection for at least three consecutive fiscal years in MD&A.
D) MD&A is optional for city governments.
E) MD&A is the final element of the introductory section of the comprehensive annual financial report (CAFR).
Q2) What are the three broad sections of a state or local government's CAFR?
Q3) What information is required in the introductory section of a state or local government's CAFR?
Q4) 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?
Q5) What is meant by the term fiscally independent?
Page 36
Q6) What is meant by the term legally independent?
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Chapter 17: A: Accounting for State and Local Governments,
Part II
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47 Verified Questions
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Sample Questions
Q1) 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?
Q2) If the landfill is judged to be a governmental fund, what liability is reported on the fund financial statements at the end of 2018?
A) $ 0.
B) $300,000.
C) $375,000.
D) $600,000.
E) $675,000.
Q3) 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.
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Page 37
Chapter 18: Accounting for Not-For-Profit Entities
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72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/66024
Sample Questions
Q1) What is the appropriate account to credit when estimating a portion of health care entity's receivables that will prove to be uncollectible?
A) Bad Debt Expense.
B) Allowance for Uncollectible Accounts.
C) Patient Service Revenues.
D) Accounts Receivable.
E) Contractual Adjustments.
Q2) Which entry would be the correct entry on the not-for-profit entity's books to record a donor's gift when the donor retains power over the assets? DEBIT CREDIT
A) Expense-charitable contribution Cash
B) Refundable advance to charity Cash
C) Cash Liability to beneficiary
D) Cash Refundable advance
E) Cash Contribution revenue
Q3) What is the main source of financial support for most voluntary health and welfare entities?
Q4) What criteria must be met before a not-for-profit entity can recognize contributed services as a means of support?
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Chapter 18: A: Accounting for Not-For-Profit Entities
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72 Verified Questions
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Sample Questions
Q1) Which entry would be the correct entry on the not-for-profit entity's books to record a donor's gift when the money is simply passing through the not-for-profit entity, it creates no direct benefit, and control of the assets has been relinquished by the donor? DEBIT CREDIT
A) Expense-charitable contribution Cash
B) Refundable advance to charity Cash
C) Cash Liability to beneficiary
D) Cash Refundable advance
E) Cash Contribution revenue
Q2) Unconditional transfers of cash or other resources to an entity in a voluntary nonreciprocal transaction is the GAAP definition of
A) Miscellaneous revenues.
B) Contributions.
C) Unconditional promises to give.
D) Exchange transactions.
E) Pledges.
Q3) What should Dura Foundation report as supporting service expenses?
Q4) What are third party payors? Why are their interests important in accounting for health care entities?
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Chapter 19: Accounting for Estates and Trusts
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81 Verified Questions
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Sample Questions
Q1) Prepare the journal entry to record the sales of the stocks and bonds for $120,000
Q2) What is the remaining principal to be divided equally between the son and the daughter?
A) $10,000 cash
B) $15,000 cash
C) 400 shares of Wal-Mart stock and $10,000 cash
D) 400 shares of Wal-Mart stock and $15,000 cash
E) 1,000 shares of Wal-Mart stock and $5,000 cash
Q3) What is the difference between an executor and an administrator?
Q4) .Assuming at the time of death the estate included 1,000 shares of Wal-Mart Stores stock and $6,000 cash in the savings account, what would the brother have received from the settlement of the estate?
A) $ 0.
B) $ 5,000.
C) $ 6,000.
D) $10,000.
E) $11,000.
Q5) The shares of Apple were sold for $145,600.Prepare the journal entry to record the transaction.
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Chapter 19: A: Accounting for Estates and Trusts
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81 Verified Questions
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Q1) What choices does an executor of an estate have in determining the values of assets included in the estate for tax purposes?
Q2) Prepare the journal entry to record ordinary repairs to the rental property of $5,000.
Q3) .Assuming at the time of death the estate included 1,000 shares of Wal-Mart Stores stock and $6,000 cash in the savings account, what would the brother have received from the settlement of the estate?
A) $ 0.
B) $ 5,000.
C) $ 6,000.
D) $10,000.
E) $11,000.
Q4) Prepare the journal entry to record the payment of the estate's liabilities for debts incurred prior to the decedent's death.
Q5) What are the three goals of probate laws?
Q6) The shares of Apple were sold for $145,600.Prepare the journal entry to record the transaction.
Q7) Debts of $52,000 were discovered. Prepare the journal entry to record the transaction.
Page 41
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