Special Topics in Accounting Textbook
Exam Questions
Course Introduction
This course explores advanced and emerging issues in the field of accounting, offering students the opportunity to engage with specialized topics that extend beyond traditional accounting curricula. Through case studies, current literature, and expert guest lectures, students examine areas such as contemporary financial reporting challenges, international accounting standards, forensic accounting, and corporate governance developments. The course emphasizes analytical thinking and practical application, preparing students to navigate the evolving landscape of the accounting profession and address complex business scenarios with confidence.
Recommended Textbook
Fundamentals of Advanced Accounting 7th Edition by Joe Ben Hoyle
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12 Chapters
1194 Verified Questions
1194 Flashcards
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Page 2
Chapter 1: The Equity Method of Accounting for Investments
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Sample Questions
Q1) All of the following would require use of the equity method for investments except:
A)Material intra-entity transactions.
B)Investor participation in the policy-making process of the investee.
C)Valuation at fair value.
D)Technological dependency.
E)Interchange of managerial personnel.
Answer: C
Q2) At what amount will Inkblot be reflected in Trycker's December 31,2017 balance sheet?
A)$2,400,000.
B)$2,280,000.
C)$2,480,000.
D)$2,800,000.
E)$7,000,000.
Answer: D
Q3) What amount of gross profit on 2017 intra-entity sales should Steven defer at December 31,2017?
Answer: [($50,000 - $35,000)× .25 × .40] = $1,500
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3
Chapter 2: Consolidation of Financial Information
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Sample Questions
Q1) Compute the consolidated retained earnings at December 31,2018.
A)$2,800.
B)$2,825.
C)$2,850.
D)$3,425.
E)$3,450.
Answer: B
Q2) Determine the balance for Goodwill that would be included in a December 1,2017,consolidation.
Answer: 11ee3f35_34d2_a2a2_a6ca_fb8a80252481_TB4173_00
Q3) Peterman Co.owns 55% of Samson Co.Under what circumstances would Peterman not be required to prepare consolidated financial statements?
Answer: Peterman would not be required to prepare consolidated financial statements if control of Samson is temporary or if,despite majority ownership,Peterman does not have control over Samson.A lack of control might exist if Samson is in a country that imposes restrictions on Peterman's actions.
Q4) How are direct combination costs accounted for in an acquisition transaction?
Answer: In an acquisition,direct combination costs are expensed in the period of the acquisition.
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Chapter 3: Consolidations - Subsequent to the Date of Acquisition
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Sample Questions
Q1) According to GAAP regarding amortization of goodwill,which of the following statements is true?
A)Goodwill recognized in consolidation must be amortized over 20 years.
B)Goodwill recognized in consolidation must be expensed in the period of acquisition.
C)Goodwill recognized in consolidation will not be amortized but subject to an annual test for impairment.
D)Goodwill recognized in consolidation can never be written off.
E)Goodwill recognized in consolidation must be amortized over 40 years.
Answer: C
Q2) If Watkins pays $450,000 in cash for Glen,what acquisition-date fair value allocation,net of amortization,should be attributed to the subsidiary's Equipment in consolidation at December 31,2019?
A)($5,000).
B)$80,000.
C)$75,000.
D)$73,500.
E)($3,500).
Answer: E
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Chapter 4: Consolidated Financial Statements and Outside Ownership
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Sample Questions
Q1) Compute the noncontrolling interest in Demers at December 31,2019.
A)$135,600.
B)$ 80,000.
C)$117,000.
D)$100,000.
E)$110,600.
Q2) Compute Pell's investment account balance in Demers at December 31,2021.
A)$639,000.
B)$643,200.
C)$763,200.
D)$676,000.
E)$620,000.
Q3) What is the dollar amount of fair value over book value differences attributed to Perch at the date of acquisition?
A)$120,000.
B)$150,000.
C)$280,000.
D)$350,000.
E)$370,000.
Q4) 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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Sample Questions
Q1) Flintstone Inc.acquired all of Rubble Co.on January 1,2018.Flintstone decided to use the initial value method to account for this investment.During 2018,Flintstone sold to Rubble for $600,000 inventory with a cost of $500,000.At the end of the year 30% of the goods were still in Rubble's inventory.
Required:
Prepare Consolidation Entry TI for the intra-entity transfer and Consolidation Entry G for the ending inventory adjustment necessary for the consolidation worksheet at 12/31/20.
Q2) In the consolidation worksheet for 2018,assuming Carter uses the initial value method of accounting for its investment in Strickland,which of the following accounts would be debited to defer unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?
A)Retained earnings.
B)Cost of goods sold.
C)Inventory.
D)Investment in Strickland Company.
E)Sales.
Q3) Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2017.
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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) Keenan Company has had bonds payable of $20,000 outstanding for several years.On January 1,2018,there was an unamortized premium of $2,000 with a remaining life of 10 years,Keenan's parent,Ross,Inc. ,purchased the bonds in the open market for $19,000.Keenan is a 90% owned subsidiary of Ross.The bonds pay 8% 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)$3,000 gain.
B)$3,000 loss.
C)$1,000 gain.
D)$1,000 loss.
E)$2,000 gain.
Q2) How is the amount of excess acquisition-date fair value over book value recognized in a consolidated statement of cash flows assuming the indirect method is used?
A)It is ignored.
B)$6,000 subtracted from net income.
C)$4,800 subtracted from net income.
D)$6,000 added to net income.
E)$4,800 added to net income.
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Chapter 7: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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Sample Questions
Q1) What amount will Coyote Corp.report in its 2018 income statement for Sales?
Q2) Compute the fair value of the foreign currency option at December 31,2018.
A)$6,000.
B)$4,500.
C)$3,000.
D)$7,500.
E)$1,500.
Q3) Williams,Inc. ,a U.S.company,has a Japanese yen account receivable resulting from an export sale on March 1 to a customer in Japan.The exporter signed a forward contract on March 1 to sell yen and designated it as a cash flow hedge of a recognized receivable.The spot rate was $.0094,and the forward rate was $.0095.Which of the following did the U.S.exporter report in net income?
A)Discount revenue.
B)Premium revenue.
C)Discount expense.
D)Premium expense.
E)Both discount revenue and premium expense.
Q4) What factors create a foreign exchange gain?
Page 9
Q5) What is the purpose of a hedge of foreign exchange risk?
Q6) What is meant by the spot rate?
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Page 10
Chapter 8: Translation of Foreign Currency Financial
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Sample Questions
Q1) A net asset balance sheet exposure exists and the foreign currency appreciates.Which of the following statements is true?
A)There is no translation adjustment.
B)There is a transaction loss.
C)There is a transaction gain.
D)There is a negative translation adjustment.
E)There is a positive translation adjustment.
Q2) A net liability balance sheet exposure exists and the foreign currency appreciates.Which of the following statements is true?
A)There is no translation adjustment.
B)There is a transaction loss.
C)There is a transaction gain.
D)There is a negative translation adjustment.
E)There is a positive translation adjustment.
Q3) Assume Boerkian was a foreign subsidiary of a U.S.multinational company and the U.S.dollar was the functional currency of the subsidiary.Prepare a schedule of changes in the net monetary assets of Boerkian for the year 2018 and properly label the resulting gain or loss.
Q4) Contrast the purpose of remeasurement with the purpose of translation.
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Chapter 9: Partnerships: Formation and Operation
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Sample Questions
Q1) How is accounting for a partnership different from accounting for a corporation?
Q2) Eden contributed $124,000 in cash to the business to receive a 20% interest in the partnership.Goodwill was to be recorded.The four original partners shared all profits and losses equally.After Eden made his investment,what were the individual capital balances?
Q3) Determine the balance in both capital accounts at the end of 2017.
Q4) What are the remaining partners' capital balances after Dean's interest is dissolved,assuming the bonus method is applied?
Q5) What was Cleary's total share of net income for 2017?
A)$63,000.
B)$53,000.
C)$58,000.
D)$29,000.
E)$51,000.
Q6) Record the journal entry to allocate the salary of Noris.
Q7) Determine the amount of net income allocated to each partner for 2018.(Round all calculations to the nearest whole dollar).
Q8) Determine the amount of net income allocated to each partner for 2017.
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Q9) For what events or conditions should the Articles of Partnership make provision?
Chapter 10: Partnerships: Termination and Liquidation
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Sample Questions
Q1) What is the role of the accountant during the liquidation process?
Q2) Before liquidating any assets,the partners determined the amount of cash available for safe payments.How should the amount of safe cash payments be distributed?
A)In a ratio of 2:4:4 among all the partners.
B)$18,333 to Henry and $16,667 to Jacobs.
C)In a ratio of 1:2 between Henry and Jacobs.
D)$15,000 to Henry and $10,000 to Jacobs.
E)$21,667 to Henry and $3,333 to Jacobs.
Q3) The Albert,Boynton,and Creamer partnership was in the process of liquidating its assets and going out of business.Albert,Boynton,and Creamer had capital account balances of $80,000,$120,000,and $200,000,respectively,and shared profits and losses in the ratio of 1:3:2.Equipment that had cost $90,000 and had a book value of $60,000 was sold for $24,000 cash.
Required:
Prepare the appropriate journal entry to record the sale of the equipment,distributing any gain or loss directly to the partners.
Q4) Prepare a schedule to calculate the safe payments to be made to the partners at the end of March.
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Page 13
Chapter 11: Accounting for State and Local Governments,
part I
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Sample Questions
Q1) Fiduciary 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) Which of the following is a fiduciary fund?
A)Pension trust fund.
B)Debt service fund.
C)Permanent fund.
D)Enterprise fund.
E)Capital projects fund.
Q3) What is the definition of the term fund?
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Chapter 12: Accounting for State and Local Governments, part II
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Sample Questions
Q1) What information is required in the financial section of a state or local government's CAFR?
Q2) How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?
Q3) The modified approach to accounting for infrastructure assets may be utilized by a state or local government if:
i.The government accumulates information about all infrastructure assets within either a network or subsystem of a network.
ii.The government capitalizes infrastructure assets.
iii.The government expenses costs of maintaining the infrastructure assets.
iv.The government chooses to depreciate its infrastructure assets.
A)i and ii.
B)i,ii,and iv.
C)ii and iii.
D)i,ii,and iii.
E)i,ii,iii,and iv.
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?
Page 15
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