Special Topics in Accounting Exam Materials
Course Introduction
This course explores advanced and emerging topics in accounting, offering students the opportunity to study areas not typically covered in the standard accounting curriculum. Subjects may vary each term and can include issues such as international accounting standards, forensic accounting, environmental and social accounting, accounting for non-profit organizations, and the implications of recent regulatory changes. Emphasis is placed on contemporary challenges, practical applications, and the critical evaluation of current trends affecting the accounting profession. Through case studies, research projects, and discussion, students develop the skills to analyze and adapt to the evolving landscape of the accounting field.
Recommended Textbook
Advanced Financial Accounting 12th Edition by Theodore E. Christensen
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21 Chapters
1263 Verified Questions
1263 Flashcards
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Page 2
Chapter 1: Intercorporate Acquisitions and Investments in Other Entities
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Sample Questions
Q1) Burrough Corporation paid $80,000 to acquire all of Helyar Company's net assets.Helyar reported assets with a book value of $60,000 and fair value of $98,000 and liabilities with a book value and fair value of $23,000 on the date of combination.Burrough also paid $3,000 to a search firm for finder's fees related to the acquisition.What amount will be recorded as goodwill by Burrough Corporation while recording its investment in Helyar?
A)$0
B)$5,000
C)$8,000
D)$13,000
Answer: B
Q2) Based on the preceding information,what amount of amount of goodwill impairment will be recognized for this division if its fair value is determined to be $245,000?
A)$0
B)$5,000
C)$60,000
D)$55,000
Answer: A
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Chapter 2: Reporting Intercorporate Investments and
Consolidation of Wholly Owned Subsidiaries With No
Differential
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Sample Questions
Q1) What account balances in the subsidiary stockholders' equity accounts should be eliminated in preparing a consolidated balance sheet?
A)Common stock
B)Additional paid-in capital
C)Retained Earnings
D)All of these account balances are eliminated
Answer: D
Q2) Slide Corporation reported net income for the current year of $370,000 and paid cash dividends of $50,000.Power Company holds 40 percent of the outstanding voting stock of Slide.However,another corporation holds the other 60 percent ownership and does not take Power's input into consideration when making financing and operating decisions for Slide.What investment income should Power recognize for the current year?
A)$0
B)$20,000
C)$128,000
D)$148,000
Answer: B
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Chapter 3: The Reporting Entity and the Consolidation of
Less-Than-Wholly- Owned Subsidiaries With No Differential
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Sample Questions
Q1) Company Pea owns 90 percent of Company Essone which in turn owns 80 percent of Company Esstwo.Company Esstwo owns 100 percent of Company Essthree.Consolidated financial statements should be prepared to report the financial status and results of operations for:
A)Pea.
B)Pea plus Essone.
C)Pea plus Essone plus Esstwo.
D)Pea plus Essone plus Esstwo plus Essthree.
Answer: D
Q2) On January 1,20X9,Peanuts Corporation acquired 80 percent of Schulz Corporation's voting common stock.On that date,Peanuts had equipment with a book value of $50,000 and a fair value of $200,000.Schulz's buildings and equipment had a book value of $300,000 and a fair value of $300,000 at the time of acquisition.What will be the amount at which buildings and equipment will be reported in consolidated statements immediately following the acquisition?
A)$350,000
B)$340,000
C)$280,000
D)$300,000
Answer: A
Page 5
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Chapter 4: Consolidation of Wholly Owned Subsidiaries
Acquired at More Than Book Value
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Sample Questions
Q1) Based on the information provided,what amount of net income will be reported in the consolidated financial statements for the year?
A)$226,000
B)$55,000
C)$230,000
D)$171,000
Q2) Based on the preceding information,at what amount should the land be reported in the consolidated balance sheet prepared immediately after the business combination?
A)$135,000
B)$140,000
C)$150,000
D)$155,000
Q3) Based on the preceding information,what amount of goodwill will be reported if the acquisition price was $195,000?
A)$0
B)$40,000
C)$15,000
D)$35,000
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Chapter 5: Consolidation of Less-Than-Wholly- Owned
Subsidiaries Acquired at More Than Book Value
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49 Flashcards
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Sample Questions
Q1) Based on the preceding information,the amount of goodwill reported is:
A)$0.
B)$10,000.
C)$15,000.
D)$20,000.
Q2) Based on the information given,what percentage of Syrup Company's shares were acquired by Pancake Company?
A)100 percent
B)60 percent
C)80 percent
D)75 percent
Q3) Based on the preceding information,what balance would Plus report as its investment in Side at January 1,20X9?
A)$251,100
B)$224,100
C)$215,100
D)$234,000
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Page 7
Chapter 6: Intercompany Inventory Transactions
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Sample Questions
Q1) Based on the information given above,what amount of cost of goods sold should be eliminated in the consolidation worksheet for 20X8?
A)$82,000
B)$70,000
C)$95,000
D)$60,000
Q2) The consolidation treatment of profits on inventory transfers that occurred before the business combination depends on whether:
I.the companies were independent at that time.
II.the sale transaction was the result of arm's-length bargaining.
A)I
B)II
C)Both I and II
D)Neither I nor II
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8
Chapter 7: Intercompany Transfers of Services and
Noncurrent Assets
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Sample Questions
Q1) Based on the preceding information,income assigned to the noncontrolling interest in the 20X9 consolidated income statement will be:
A)$12,000.
B)$14,000.
C)$12,500.
D)$48,000.
Q2) Based on the preceding information,the gain on sale of the equipment recorded by Pat for 20X8 is:
A)$150,000
B)$65,000
C)$110,000
D)$40,000
Q3) Based on the preceding information,the amount to be reported as consolidated net income for 20X8 will be:
A)$190,000.
B)$170,000.
C)$175,000.
D)$150,000.
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Chapter 8: Intercompany Indebtedness
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Sample Questions
Q1) Based on the information given above,what amount of premium on bonds payable will be eliminated in the preparation of the 20X8 year-end consolidated financial statements?
A)$4,276
B)$4,923
C)$6,108
D)$7,033
Q2) Based on the information given above,what amount of interest income will be eliminated in the preparation of the December 31,20X9 consolidated financial statements?
A)$8,184
B)$16,296
C)$12,704
D)$18,988
Q3) Based on the information given above,what amount of gain or loss on bond retirement was recorded during the consolidation process?
A)No gain or loss
B)$35,000 loss
C)$35,000 gain
D)$15,000 loss
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Chapter 9: Consolidation Ownership Issues
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Q1) Based on the information provided,what amount will be reported as consolidated net income for 20X9 under the treasury stock method?
A)$150,000
B)$100,000
C)$75,000
D)$175,000
Q2) Based on the preceding information,in the journal entry recorded by Plate for sale of shares:
A)Cash will be credited for $60,000.
B)Investment in Silver Stock will be credited for $51,000.
C)Investment in Silver Stock will be credited for $60,000.
D)Additional Paid-in Capital will be credited for $45,000.
Q3) Based on the information provided,what amount of consolidated net income will A Company report for 20X9?
A)$175,000
B)$285,000
C)$356,250
D)$400,000
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11
Chapter 10: Additional Consolidation Reporting Issues
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Sample Questions
Q1) Based on the preceding information,what is the amount of earnings available to common shareholders reported in the consolidated financial statements for the year?
A)$101,800
B)$104,500
C)$112,300
D)$115,000
Q2) Dividends paid to noncontrolling shareholders:
I.are reported as a cash outflow in the consolidated cash flow statement.
II.represent funds that are no longer available to the consolidated entity.
III.are reported in the consolidated retained earnings statement.
A)Observation I alone is true.
B)Observation III alone is true.
C)Observations I and II are true.
D)Observations I,II,and III are true.
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Chapter 11: Multinational Accounting: Foreign Currency
Transactions and Financial Instruments
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Sample Questions
Q1) Which of the following observations is true of futures contracts?
A)They are contracted through a dealer,usually a bank.
B)They are customized to meet contracting company's terms and needs.
C)Future contracts typically do not require a margin deposit.
D)Future contracts are traded on an exchange and acquired through an exchange broker.
Q2) Based on the preceding information,what was the overall foreign currency gain or loss on the accounts payable transaction?
A)$300 loss
B)$200 loss
C)$100 gain
D)$200 gain
Q3) Based on the preceding information,what is Highland's overall net gain or net loss from its foreign currency exposure related to this transaction?
A)$280 loss
B)$302 loss
C)$385 gain
D)$665 gain
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Chapter 12: Multinational Accounting: Issues in Financial
Reporting and Translation of Foreign Entity Statements
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Q1) If the restatement method for a foreign subsidiary involves remeasuring from the recording currency into the functional currency,then translating from functional currency to U.S.dollars,the functional currency of the subsidiary is:
I.the U.S.dollar.
II.the recording currency unit.
III.a third country's currency.
A)I
B)III
C)II
D)Either I or II
Q2) Based on the preceding information,on Leo's consolidated balance sheet at December 31,20X8,what amount should be reported for the goodwill acquired on January 1,20X8?
A)$36,845
B)$39,286
C)$36,905
D)$36,607
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Page 14
Chapter 13: Segment and Interim Reporting
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Sample Questions
Q1) Dragon Company has two reportable segments,A and B.Segment A made $3,000,000 of sales to external customers and $200,000 of sales to other operating segments.Segment B made sales of $5,000,000 to external customers and $1,200,000 of sales to other operating segments.Dragon Company reported $9,600,000 of revenues on its consolidated income statement.What calculation below correctly determines whether Dragon Company's reportable segments satisfy the 75% revenue test?
A)$8,000,000/$9,600,000
B)$8,000,000/$11,000,000
C)$9,400,000/$9,600,000
D)$9,400,000/$11,000,000
Q2) On March 15,20X9,Clarion Company paid property taxes of $60,000 on its factory building for calendar year 20X9.On July 1,20X9,Clarion made $40,000 in unanticipated repairs to its machinery.The repairs will benefit operations for the remainder of the calendar year.What total amount of these expenses should be included in Clarion's quarterly income statement for the three months ended September 30,20X9?
A)$55,000
B)$15,000
C)$35,000
D)$40,000
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Page 15
Chapter 14: Sec Reporting
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Q1) Which of the following acts helps businesses raise funds in public capital markets by minimizing regulatory requirements?
A)Dodd-Frank Wall Street Reform and Consumer Protection Act
B)Foreign Corrupt Practices Act
C)Jumpstart Our Business Startups (JOBS)Act
D)Sarbanes-Oxley Act
Q2) For an accelerated filer,how many years of audited financial statements must be presented in the issuer's annual report?
I.Three years of audited income statements
II.Two years of audited balance sheets
III.Three years of audited statements of cash flows
A)I and II
B)II and III
C)I and III
D)I,II,and III
Q3) Both the FCPA (Foreign Corrupt Practices Act of 1977)and SOX (Sarbanes-Oxley Act of 2002)contain provisions related to internal control.Discuss some significant differences between how the two acts impact internal control practices for publicly held companies.
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Page 16
Chapter 15: Partnerships: Formation,operation,and
Changes in Membership
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Sample Questions
Q1) A partner's tax basis in a partnership is comprised of which of the following items?
I.The partner's tax basis of assets contributed to the partnership.
II.The amount of the partner's liabilities assumed by the other partners.
III.The partner's share of other partners' liabilities assumed by the partnership.
A)I plus II minus III
B)I plus II plus III
C)I minus II plus III
D)I minus II minus III
Q2) Based on the preceding information,what amount of goodwill will be recorded if Daniel invests $450,000 for a one-third interest?
A)$0
B)$10,000
C)$50,000
D)$100,000
Q3) The ABC partnership had net income of $100,000 for 20X9.They allocate profits and losses in the ratio 5:3:2.After closing the 12/31/20X9 books they discovered that $30,000 was spent on a piece of land in December 20X9 and was expensed.What should happen?
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Chapter 16: Partnerships: Liquidation
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Q1) Refer to the above information.If the other assets are sold for $140,000 and all partners are personally insolvent,how much should I receive upon liquidation?
A)$0
B)$2,000
C)$6,600
D)$22,000
Q2) Based on the preceding information,what amount will be paid out to Bill upon liquidation of the partnership?
A)$0
B)$25,000
C)$11,667
D)$2,500
Q3) Refer to the information provided above.How much cash will be distributed to David at the end of the second month?
A)$75,000
B)$60,000
C)$41,250
D)$33,750
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Chapter 17: Governmental Entities: Introduction and General Fund Accounting
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Sample Questions
Q1) The general fund of Sun City was billed $7,000 for using the services of one of its internal service funds.The general fund should account for this transaction as an:
A)interfund transfer.
B)interfund loan.
C)interfund service.
D)interfund reimbursement for services rendered.
Q2) The general fund of Park City acquired computer equipment at a cost of $50,000 on May 18,20X9.To record acquisition of this equipment,the general fund of Park City should debit:
A)expenditures.
B)encumbrances.
C)equipment.
D)vouchers payable.
Q3) Which of the following funds are classified as governmental funds?
A)Internal service and capital projects funds.
B)Internal service and debt service funds.
C)Enterprise and agency funds.
D)The general and special revenue funds.
Q4) Briefly discuss the various types of governmental funds and proprietary funds.
Page 19
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Chapter 18: Governmental Entities: Special Funds and Governmentwide Financial Statements
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Sample Questions
Q1) A special revenue fund should be used in which of the following situations for a state government?
A)For sales taxes that are to be distributed to towns,cities,villages,etc.of the state.
B)For the proceeds of general obligation bonds that are to be used to construct major long-lived fixed assets.
C)For gasoline taxes that are to be used exclusively to repair state roads and bridges.
D)For investments donated by a prominent citizen that are to be invested permanently,with income being used to support homeless people.
Q2) Which of the following items would not be reported on the financial statements of a special revenue fund?
A)Long-term productive assets.
B)Expenditures and revenues.
C)Vouchers payable and unreserved fund balance.
D)Fund balance reserved for encumbrances and expenditures.
Q3) GASB 34 requires a reconciliation schedule for the Statement of Net Assets.What does this schedule document?
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Page 20
Chapter 19: Not-For-Profit Entities
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Q1) According to ASC 958,not-for-profit entities should report investments in the financial statements at:
I.fair market value.
II.lower of cost or market.
A)I only
B)II only
C)Either I or II
D)Neither I nor II
Q2) Based on the preceding information,the journal entry to recognize present value at the time the pledge is received includes:
A)a credit to Pledges Receivable-Temporarily Restricted for $25,000.
B)a debit to Contributions-Temporarily Restricted for $21,062.
C)a debit to Pledges Receivable-Temporarily Restricted for $21,062.
D)a credit to Contributions-Temporarily Restricted for $25,000.
Q3) All restricted funds of private,not-for-profit hospitals account for resources:
A)whose use is restricted by the donor.
B)received and expended in the hospital's primary health care mission.
C)that are only temporarily restricted.
D)received or pledged by donors for use in future periods.
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Page 21
Chapter 20: Corporations in Financial Difficulty
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Q1) In which of the following ways can debt be restructured?
I.Assets can be transferred to the creditor.
II.An equity interest can be granted to the creditor.
III.The terms of the debt can be modified.
A)I and II only
B)I and III only
C)II and III only
D)I,II,and III
Q2) Under a composition agreement,
A)creditors agree to accept less than the face amount of their claims.
B)debtors in financial difficulty transfer assets "without recourse."
C)a creditors' committee is initiated with a plan of settlement proposed by the debtor.
D)the debtor petitions for relief in a bankruptcy court.
Q3) Based on the preceding information,what is the total amount of unsecured claims?
A)$113,000
B)$126,000
C)$93,000
D)$121,000
Q4) Briefly explain the three classes of creditors specified in the Bankruptcy Code.
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Chapter 21: Intercompany Indebtednessfully Adjusted
Equity Method Using Straight-Line Interest Amortization
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Q1) Based on the information given above,what amount of gain or loss on bond retirement will be reported in the 20X8 consolidated financial statements?
A)$17,000
B)$12,800
C)$18,500
D)$22,200
Q2) Based on the information given above,what amount of gain or loss on bond retirement is included in the 20X7 consolidated income statement?
A)$6,600
B)$4,800
C)$6,000
D)$5,400
Q3) Based on the information given above,what price did Peanut pay to purchase the Snoopy bonds?
A)$530,000
B)$516,875
C)$533,750
D)$550,625
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