Overall Review

Question 1

Accumulated Other Comprehensive Income is Reported in what statement?

Answer 1

Is a Balance Sheet account and is reported in Statement of Financial Position

Question 2

Materiality and relevance are both defined by:

Answer 2

What influences or makes a difference to a decision maker

Question 3

For sales commission payable at the end of a month:

Answer 3

Take net sales x Commission percentage. When they receive a salary advance you adjust the commission earned up to that dollar amount. The final amount to accrue is the fixed salary amount to get total accrual amount.

Question 4

When going from cash basis to accrual basis of accounting, you and add and subtract the following:

Answer 4

Add Increases in current assets
Subtract Decreases in current assets
Add Decreases in current liabilities
Subtract increases in current liabilities

Question 5

Under IFRS, intangible assets

Answer 5

Internally generated goodwill cannot be recognized as an asset

Question 6

Goodwill is:

Answer 6

is the excess of the purchase price over the fair market value of the net assets acquired

Question 7

The discount resulting from the determination of a note payable’s present value should be reported on the balance sheet as (an):

Answer 7

Direct reduction from the face amount of the note.

Question 8

Warranty expenses where costs are estimated to be a percentage of sales

Answer 8

Take the Warranty sales x estimated percentage. Then subtract out actual costs incurred to get the total warranty expense for the year

Question 9

Calculate Accrued Salaries Payable

Answer 9

Beginning Balance
Add: Salaries Expenses during the year
Subtract: Salaries paid during the year (gross)

Question 10

Operating Profit by segments is based on:

Answer 10

The measure of profit reported to the “Chief Operating Decision Maker.” Interest Expense, Income taxes, and general corporate expenses are not allocated to the divisions solely for the purposes of segment disclosures; they may be allocated if that is how the segments report to the “Chief Operating Decision Maker.”

Question 11

A common modification used to prepare modified cash basis financial statements is:

Answer 11

Capitalizing inventory

Question 12

In a single period statements, you should not reflect the following as an adjustment to the opening balance of retained earnings:

Answer 12

Effect of a decrease in the estimated useful life of depreciable equipment. This is done prospectively

Question 13

The calculation of the income recognized in the third year of a five-year construction contract accounted for using the percentage-of-completion method includes the ratio of:

Answer 13

Total costs incurred to date to total estimated costs

Question 14

A company that is large accelerated filer must files its Form 10-Q with the United States Securities and Exchange Commission within how many days after the end of the period?

Answer 14

40 days.

45 days for small corporations

Question 15

Undervalued assets amortization affects both the investment account (an asset) and the investment income account (a revenue), while cash dividends affect the

Answer 15

investment account but not the investment income account.

Question 16

Conceptually, interim financial statements can be described as emphasizing which enhancing qualitative characteristics?

Answer 16

Timeliness by providing financial information based on actual performance to date and estimates prior to year end.

Question 17

Under the IASB framework, ______is the underlying assumption of financial statement preparation and presentation.

Answer 17

Going Concern.

Question 18

Under a royalty agreement with another company, Wand Co. will pay royalties for an assignment of a patent for three years. The royalties paid should be reported as expense:

Answer 18

In the period incurred.

Question 19

According to the FASB conceptual framework, certain assets are reported in financial statements at the amount of cash or its equivalent that would have to be paid if the same or equivalent assets were acquired. What is the name of the reporting concept?

Answer 19

Replacement Cost

Question 20

Deb Co. records all sales using the installment method of accounting. Installment sales contracts call for 36 equal monthly cash payments. According to the FASB’s conceptual framework, the amount of deferred gross profit relating to collections 12 months beyond the balance sheet date should be reported in the:

Answer 20

Current asset section as a contra account.

The amount of deferred gross profit relating to installment AR collections 12 months beyond the balance sheet date should be reported in the current asset section as a contra account.

Question 21

When service contracts are sold,

Answer 21

Deferred revenue increases but service revenue doesn’t increase until services are performed.

Question 22

Form 10K is filed annually. How many days after close for each of the following:

• Large Accelerated
• Accelerated
• All Others

Answer 22

• Large Accelerated - 60 Days
• Accelerated - 75 Days
• All Others - 90 Days

Question 23

Form 10Q is filed quarterly. How many days after close for each of the following:

• Large Accelerated
• Accelerated
• All Others

Answer 23

• Large Accelerated - 40 days
• Accelerated - 40 days
• All Others - 45 days