Question : 41.Gain contingencies a. should be accrued when probable and the amount : 1241705

 

 

41.Gain contingencies

a. should be accrued when probable and the amount can be reasonably estimated.

b. are reported as revenues on the income statement.

c. should be accrued for anticipated lottery winnings.

d. are almost never accrued and are rarely disclosed.

 

 

42.A company has a decreasing current ratio. Creditors should be concerned

a.with long-term solvency.

b.about the company’s ability to pay current debts as they come due.

c.about the company’s profitability.

d.about whether earnings per share is increasing or decreasing.

 

 

 

43.A pension is

a.a cost such as health insurance paid on behalf of a retired or disabled employee.

b.a contingent inflow of cash anticipated from assets earning interest.

c.required of all employers.

d.usually determined by the employees’ years of service.

 

 

 

44.Alpine, Inc. sells baseball tickets for professional baseball games. Cash receipts for baseball tickets are credited to Unearned Ticket Revenue. During 2015, Alpine collected $30,000 for a September, 2015 baseball game and $42,000 for a March, 2016 baseball game. The September game was played as scheduled, although $2,000 of tickets was refunded to fans that canceled because they had been permanently kicked out of the stadium for disorderly conduct. How much should be reported as Unearned Ticket Revenue at December 31, 2015?

a.$0

b.$42,000

c.$72,000

d.$40,000

 

 

 

45.A measure of the extent to which reported income is conservative is called

a.ERISA.

b.a gain contingency.

c.the conservatism ratio.

d.a line of credit.

 

 

46.Warranties should be accrued if it is

a.probable that an expense will be incurred and the amount is reasonably estimable.

b.possible that an expense will be incurred regardless of whether the amount is estimable or not.

c.possible that an expense will be incurred and the amount is reasonably estimable.

d.remote that any costs will be incurred.

 

 

 

47.In addition to recognizing income tax expense, the accounting necessary to record income taxes requires

a.a credit to income tax payable based on net income times the tax rate.

b.a debit to the income tax expense account for the amount of cash that must be paid for taxes.

c.computations of the amounts to record in the deferred income tax account.

d.all companies to report taxable income on the income statement

 

 

 

48.Two types of differences exist between computing income for tax purposes and computing income for financial accounting purposes. The differences are

a.defined benefit taxes and defined contribution taxes.

b.deferred tax assets and deferred tax liabilities.

c.revenues and expenses.

d.temporary and permanent.

 

 

 

49.The economic essence of one of the following should not be reported in the balance sheet as a current liability. Which one is not reported?

a.  Free sandwich offers printed on hockey ticket stubs

b. Amounts sued for damages associated with injuries from an allegedly defective weed eater

c.  Mail-in rebates from software by software companies

d.  Amounts payable to an employee for a recent expense report

 

 

50.A defined benefit plan differs from a defined contribution plan in that a defined benefit plan

a.has a liability that must be actuarially computed.

b.is required by ERISA.

c.requires a corporation to make a series of payments of a specified amount to a pension fund.

d.requires journal entries, and the defined contribution plan does not.