Scott corporation sold a fixed asset used for operations for greater than its carrying amount. Scott should report the transaction in the income statement using the?
Net concept, showing the total gain as a part of continuing operations, not net of income taxes
One of the elements of a financial statement is comprehensive income. Comprehensive income excludes changes in equity, resulting from which of the following?
A. Gain on foreign currency transactions
B. Dividends paid to stockholders
C. Unrealized loss on investments and non current marketable equity securities
D. Loss from discontinued operations
B. Dividends paid to stockholders.
On September 22, Year 4, Yumi Corp purchased merchandise from an unaffiliated foreign company for 10,000 units of the foreign company’s local currency. On that date, the spot rate was 0.55
Yuri paid the bill in full on March 20, Year 5, when the spot rate was .65. The spot rate was 0 70 o. December 31, Year 4. What amount should Yumi report as a foreign currency transaction loss in its income statement for the year ended December 31, Year 4?
A. 0
B. 1,500
C. 500
D. 1000
B. 1500
On September 22, the liability denominated in dollars equals $5,500 (10,000 units x 0.55 spot rate)
On December 31, the liability denominated in dollars equals $7,000 (10,000 units x 0.70 spot rate)
At year end, the foreign currency transaction loss equals $1500 ($7000-$5500)
For a company to obtain a retail business license in a particular state, the company is required to pay the state.The equivalent of three months of sales taxes on its projected retail sales, this amount is fully refundable after five years, provided, the company has filed all required sales tax returns and paid all sales taxes due. Initially the company should report the payment related to this licensing requirement as:
A. A non-current asset
B. A non current liability
C. A current asset
D. An expense
A. A non-current asset
Paying the equivalent of three months sales taxes on projected retail sales and satisfaction of the licensing requirement.That is fully refundable after five years is a noncurrent asset. Because the transaction is expected to result in the realization of cash in the future, the payment is an asset. It is a noncurrent asset because the cash will be realized at a time behind the normal operating cycle or one year.
A companies year and comparative statement of financial position reflects the following changes from prior year: cash increased by $40,000, total liabilities increased by $32,000, and all other assets decreased by $65,000. Which of the following statements is correct?Regarding the current ear change and the company’s stockholder equity?
A. It decreased by $32,000
B. It decreased by $57,000
C. It increased by $105,000
D. It increased by $25,000
B. It decreased by $57,000
Assets= liabilities+ stockholders’ equity. If cash increased by $40,000 and other assets decreased by $65,000, the net change in assets is a decline of $25,000. Liabilities increased $32,000
Setting up the equation to reflect the changes in each category
-$25,000=$32,000+SE
SE= -$57,000
Which of the following best describes the primary objective of financial reporting according to the FASB Conceptual Framework?
A. To provide information useful to management in making operational decisions
B. To provide information useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity
C. To provide information that ensures consistency and comparability across all reporting entities
D. To provide information that minimizes the cost of preparing financial statements
B. To provide information useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources to the entity
Which financial statement reports an entity’s financial position at a specific point in time?
A. Statement of cash flows
B. Statement of comprehensive income
C. Balance sheet
D. Statement of changes in equity
C. Balance Sheet
Under ASC 606, which of the following is NOT one of the five steps in the revenue recognition model?
A. Identify the contract with a customer
B. Determine the transaction price
C. Allocate the transaction price to performance obligations
D. Recognize revenue when cash is collected
D. Recognize revenue when cash is collected
During periods of rising prices, which inventory method results in the highest ending inventory and lowest cost of goods sold?
A. FIFO
B. LIFO
C. Weighted-average
D. Specific identification
A. FIFO
Which of the following costs should be capitalized as part of equipment?
A. Annual maintenance contract
B. Routine repairs to maintain operating condition
C. Cost to install and test the equipment before use
D. Training costs for employees operating the equipment
C. Cost to install and test the equipment before use
An asset is purchased for $120,000 with an estimated residual value of $20,000 and a useful life of 5 years.
Using straight-line depreciation, what is annual depreciation expense?
A. $20,000
B. $24,000
C. $16,000
D. $28,000
A. $20,000
A bond with a face value of $100,000 is issued at 102. How much cash does the issuer receive?
A. $98,000
B. $100,000
C. $102,000
D. $104,000
C. $102,000
Which of the following requires a lessee to classify a lease as a finance lease under ASC 842?
A. Lease term equals 70% of the asset’s economic life
B. Present value of lease payments equals substantially all of the asset’s fair value
C. Lease contains variable lease payments based on usage
D. Lease does not transfer ownership at the end of the lease
B. Present value of lease payments equals substantially all of the asset’s fair value
Which of the following transactions increases retained earnings?
A. Declaration of a cash dividend
B. Issuance of common stock at a premium
C. Net income for the period
D. Purchase of treasury stock
C. Net income for the period
Which of the following is reported as an operating activity under the indirect method?
A. Cash paid to purchase equipment
B. Cash received from issuing bonds
C. Depreciation expense
D. Cash paid to repay long-term debt
C. Depreciation expense
At year-end, a company recorded salaries payable of $18,000. Salaries expense for the year was $142,000. How much cash was paid for salaries during the year?
A. $124,000
B. $142,000
C. $160,000
D. $18,000
A. 124,000
Which fund is used to account for the general operations of a state or local government?
A. General Fund
B. Capital Projects Fund
C. Enterprise Fund
D. Internal Service Fund
A. General Fund
Which of the following funds uses modified accrual accounting and the current financial resources measurement focus?
A. General Fund
B. Enterprise Fund
C. Pension Trust Fund
D. Private-purpose Trust Fund
A. General Fund
Which of the following results in an increase in net assets with donor restrictions for a not-for-profit organization?
A. Contribution received with no donor restrictions
B. Satisfaction of a donor-imposed restriction
C. Contribution restricted for a specific future purpose
D. Transfer from net assets without donor restrictions
C. Contribution restricted for a specific future purpose
A company issues a $100,000, 5-year bond at a discount of $4,000. Using the straight-line method, how much discount is amortized each year?
A. $400
B. $800
C. $4,000
D. $20,000
B. $800
At lease commencement, a lessee records:
A. Lease liability only
B. Right-of-use asset only
C. Lease liability and right-of-use asset
D. Lease expense
C. Lease liability and right-of-use asset
Which of the following intangible assets is amortized?
A. Goodwill
B. Trademark with an indefinite life
C. Copyright
D. Brand recognition
C. Copyright
A long-lived asset held for use is considered impaired when:
A. Carrying amount exceeds fair value
B. Carrying amount exceeds undiscounted future cash flows
C. Fair value exceeds carrying amount
D. Discounted future cash flows exceed carrying amount
B. Carrying amount exceeds undiscounted future cash flows
