FAR1

Question 1

Which of the following is used to notify investors of a current event or major development?

Answer 1

FROM 8-K

Question 2

Which of the following is the proper treatment of the cost of equipment used in research and development activities that will have alternative future uses?

Answer 2

Equipment that will have alternate future uses would be capitalized and depreciated just like regular business assets.

Question 3

If an asset’s carrying amount is $100,000 and its fair value less costs to sell is determined to be $90,000, what is the impairment loss to be recognized?

Answer 3

10,000 (impairment loss is $100,000 (carrying amount) – $90,000 (fair value less costs to sell) = $10,000)

Question 4

The direct method involves listing

Answer 4

cash receipts and payments, including cash payments to suppliers, as part of operating activities.

Question 5

What is the primary purpose of adjusting the notes to financial statements to include newly identified contingent liabilities?

Answer 5

to ensure transparency and full disclosure