ACC 421 Final Exam
1) When an item of expense is paid and recorded in advance, it is normally called a(n)
2) If, during an accounting period, an expense item has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve
3) An accrued expense can best be described as an amount
4) Which of the following statements is not an objective of financial reporting?
5) The two primary qualities that make accounting information useful for decision making are
6) One objective of financial reporting is to provide
7) Companies that are listed on a stock exchange are required to submit their financial statements to the
8) The body that has the power to prescribe the accounting practices and standards to be employed by companies that fall under its jurisdiction is the
9) The Financial Accounting Foundation
10) Limitations of the income statement include all of the following except
11) Which of the following is not a generally practiced method of presenting the income statement?
12) The income statement reveals
13) In selecting an accounting method for a newly contracted long-term construction project, the
principal factor to be considered should be
14) Which of the following is not an accurate representation concerning revenue recognition?
15) Dot Point, Inc. is a retailer of washers and dryers and offers a three-year service contract on each appliance sold. Although Dot Point sells the appliances on an installment basis, all service contracts are cash sales at the time of purchase by the buyer. Collections received for service contracts should be recorded as
16) One criticism not normally aimed at a balance sheet prepared using current accounting and reporting standards is
17) The balance sheet contributes to financial reporting by providing a basis for all of the following except
18) The basis for classifying assets as current or noncurrent is conversion to cash within
19) The focus of APB Opinion No. 22 is on the disclosure of accounting policies. This information
is important to financial statement readers in determining
20) If a business entity entered into certain related party transactions, it would be required to
disclose all of the following information except the
21) Events that occur after the December 31, 2008 balance sheet date (but before the balance
sheet is issued) and provide additional evidence about conditions that existed at the balance
sheet date and affect the reliability of accounts receivable should be
22) Companies should disclose all of the following in interim reports except
23) If the financial statements examined by an auditor lead the auditor to issue an opinion that contains an exception that is not of sufficient magnitude to invalidate the statement as a whole, the opinion is said to be
24) The MD&A section of an enterprise’s annual report is to cover the following three items:
25) The payout ratio is calculated by dividing
26) Which of the following ratios measures long-term solvency?
27) Theoretically, in computing the receivables turnover, the numerator should include
28) To arrive at net cash provided by operating activities, it is necessary to report revenues and
expenses on a cash basis. This is done by
29) The first step in the preparation of the statement of cash flows requires the use of information included in which comparative financial statements?
30) The primary purpose of the statement of cash flows is to provide information
31) Riley Company reports its income from investments under the equity method and recognized income of $25,000 from its investment in Wood Co. during the current year, even though no dividends were declared or paid by Wood during the year. On Riley’s statement of cash flows (indirect method), the $25,000 should
32) Which of the following would be classified as a financing activity on a statement of cash flows?
33) In a statement of cash flows, the cash flows from investing activities section should report
34) Which table would show the largest factor for an interest rate of 8% for five periods?
35) Which table would you use to determine how much you would need to have deposited three years ago at 10% compounded annually in order to have $1,000 today?
36) Which of the following transactions would require the use of the present value of an annuity
due concept in order to calculate the present value of the asset obtained or liability owed at the
date of incurrence?