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Question : 58.The accounting process begins with: A.Analysis of business transactions and source : 1236663

Accounting

 

58.The accounting process begins with:   

A.Analysis of business transactions and source documents.

B.Preparing financial statements and other reports.

C.Summarizing the recorded effect of business transactions.

D.Presentation of financial information to decision-makers.

E.Preparation of the trial balance.

59.All of the following statements regarding a sales invoice are true except:   

A.A sales invoice is a type of source document.

B.A sales invoice is used by sellers to record the sale and for control.

C.A sales invoice is used by buyers to record purchases and monitor purchasing activity.

D.A sales invoice gives rise to an entry in the accounting process.

E.A sales invoice does not provide objective evidence about a transaction.

60.A business’s source documents may include all of the following except:   

A.Sales tickets.

B.Ledgers.

C.Checks.

D.Purchase orders.

E.Bank statements.

61.A business’s source documents:   

A.include the ledger.

B.Provide objective evidence that a transaction has taken place.

C.must be in electronic form.

D.are prepared internally to ensure accuracy.

E.include the chart of accounts.

62.A business’s record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is known as a(n):   

A.Journal.

B.Posting.

C.Trial balance.

D.Account.

E.Chart of accounts.

63.An account used to record the owner’s investments in a business is called a(n):   

A.Withdrawals account.

B.Capital account.

C.Revenue account.

D.Expense account.

E.Liability account.

64.Identify the account used by businesses to record the transfer of assets from a business to its owner for personal use:   

A.A revenue account.

B.The owner’s withdrawals account.

C.The owner’s capital account.

D.An expense account.

E.A liability account.

65.Identify the statement below that is correct.   

A.When a future expense is paid in advance, the payment is normally recorded in a liability account called Prepaid Expense.

B.Promises of future payment by the customer are called accounts receivable.

C.Increases and decreases in cash are always recorded in the owner’s capital account.

D.An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business.

E.Accrued liabilities include accounts receivable.

66.Unearned revenues are generally:   

A.Revenues that have been earned and received in cash.

B.Revenues that have been earned but not yet collected in cash.

C.Liabilities created when a customer pays in advance for products or services before the revenue is earned.

D.Recorded as an asset in the accounting records.

E.Increases to owners’ capital.

67.Prepaid expenses are generally:   

A.Payments made for products and services that do not ever expire.

B.Classified as liabilities on the balance sheet.

C.Decreases in equity.

D.Assets that represent prepayments of future expenses.

E.Promises of payments by customers.

 

 

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July 1, 2023
    

 

 

161. U.S. GAAP and IFRS require firms to recognize as assets identifiable intangibles acquired in external market transactions.  Which of the following is/are true? A. The exchange between an independent buyer and seller provides evidence of the existence of expected future benefits, and the exchange price provides evidence of the fair value of those benefits. B. In external market transactions, identifiable intangibles include patents, trademarks, customer lists, and other economic resources ready for use, as well as in-process technologies with uncertain future benefits. C. In external market transactions, identifiable intangible assets have either finite lives or indefinite lives.D. In external market transactions, firms must amortize intangible assets with finite lives, generally using the straight-line method. E. all of the above

 

162. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is/are not true? A. U.S. GAAP provides fourteen criteria, any one of which qualifies a lease as a capital lease. B. IFRS provides general criteria for identifying the entity enjoying the rewards and incurring the risk.C. Firms cannot currently apply the fair value option to capital leases. D. The FASB and the IASB have undertaken a joint project involving the lessee’s accounting for leases which may result in treating all leases as capital leases.E. all of the above

 

163. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is not true? A. The criteria attempt to identify the entity, whether lessor or lessee, that enjoys the benefits and incurs the risk of the leased asset. B. When the lessor enjoys the benefits and bears the risk, the lease is a capital lease.C. When the lessee enjoys the benefits and bears the risk, the lease is a capital lease. D. IFRS provides more general criteria for identifying the entity enjoying the rewards and incurring the risk. E. Firms cannot currently apply the fair value option to capital leases.

 

164. U.S. GAAP and IFRS account for notes and nonconvertible bonds payable similarly.Which of the following is/are not true? A. Firms initially record long-term notes and bonds at their issue price, the present value of the future contractual cash flows discounted at the market interest rate for the bonds at the time of issue. B. The market interest rate at the time of issue is the rate that discounts the contractual cash flows to the initial issue price.C. If the market interest rate equals the coupon rate for the bonds, the firm will issue the bonds for face value.D. If the market interest rate exceeds the coupon rate, the firm will issue the bonds for more than face value. E. If the coupon rate exceeds the market interest rate, the firm will issue the bonds for more than face value.

 

165. IFRS _____ firms to remeasure property, plant, and equipment upward for increases in fair value under certain conditions. U.S. GAAP _____ such upward remeasurements.  A. permits; permits B. permits; does not permit C. does not permit: does not permit D. does not permit: permits E. none of the above

 

166. Which of the following is not true? A. Firms reclassify gains and losses initially classified in other comprehensive income into net income when a confirming event subsequently occurs. B. Firms close amounts in other comprehensive income for a period to Accumulated Other Comprehensive Income at the end of the period.C. Net income includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business. D. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income. E. The FASB’s and IASB’s conceptual framework contains a conceptual model for classifying items in net income versus in other comprehensive income.

 

167. Both U.S. GAAP and IFRS often refer to ownership of a(n) _____ of the voting stock of another entity as indicating control, unless evidence indicates that the owner cannot exercise control. A. direct investmentB. indirect investmentC. majorityD. minorityE. effective control

 

168. Which of the following is not true? A. Comprehensive income equals the net amount of revenues, expenses, gains, and losses during an accounting period. B. Authoritative guidance classifies revenues and expenses arising from a firm’s core business as components of net income. C. Net income includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business. D. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income. E. The FASB’s and IASB’s conceptual framework contains a conceptual model for classifying items in net income versus in other comprehensive income.

 

169. The FASB and the IASB are reconsidering the role of uncertainty, or probability, in the definition, recognition, and measurement of liabilities. Existing recognition criteria include a probable future sacrifice of resources; one issue involves the minimum probability level to warrant recognition of an uncertain obligation as a liability. U.S. GAAP does not specify a minimum probability level, although the rule-of-thumb in practice is approximately _____ percent.  A. 50B. 60C. 70D. 80E. 90

 

170. Which of the following is not true? A. Acquisition cost for a merchandising firm includes the costs incurred to purchase and transport the inventory prior to sale. B. Acquisition cost for a manufacturing firm includes the direct material, direct labor, and manufacturing overhead cost to produce the inventory. C. If the market values of inventory items decline below acquisition cost prior to sale, firms must reduce their balance sheet carrying values using the lower of cost or market method.D. U.S. GAAP uses a combination of replacement cost and net realizable values to measure market value. E. U.S. GAAP and IFRS permits firms to remeasure inventories upward when market value exceeds acquisition cost.

 

 

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July 1, 2023
    

 

 

161. U.S. GAAP and IFRS require firms to recognize as assets identifiable intangibles acquired in external market transactions.  Which of the following is/are true? A. The exchange between an independent buyer and seller provides evidence of the existence of expected future benefits, and the exchange price provides evidence of the fair value of those benefits. B. In external market transactions, identifiable intangibles include patents, trademarks, customer lists, and other economic resources ready for use, as well as in-process technologies with uncertain future benefits. C. In external market transactions, identifiable intangible assets have either finite lives or indefinite lives.D. In external market transactions, firms must amortize intangible assets with finite lives, generally using the straight-line method. E. all of the above

 

162. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is/are not true? A. U.S. GAAP provides fourteen criteria, any one of which qualifies a lease as a capital lease. B. IFRS provides general criteria for identifying the entity enjoying the rewards and incurring the risk.C. Firms cannot currently apply the fair value option to capital leases. D. The FASB and the IASB have undertaken a joint project involving the lessee’s accounting for leases which may result in treating all leases as capital leases.E. all of the above

 

163. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is not true? A. The criteria attempt to identify the entity, whether lessor or lessee, that enjoys the benefits and incurs the risk of the leased asset. B. When the lessor enjoys the benefits and bears the risk, the lease is a capital lease.C. When the lessee enjoys the benefits and bears the risk, the lease is a capital lease. D. IFRS provides more general criteria for identifying the entity enjoying the rewards and incurring the risk. E. Firms cannot currently apply the fair value option to capital leases.

 

164. U.S. GAAP and IFRS account for notes and nonconvertible bonds payable similarly.Which of the following is/are not true? A. Firms initially record long-term notes and bonds at their issue price, the present value of the future contractual cash flows discounted at the market interest rate for the bonds at the time of issue. B. The market interest rate at the time of issue is the rate that discounts the contractual cash flows to the initial issue price.C. If the market interest rate equals the coupon rate for the bonds, the firm will issue the bonds for face value.D. If the market interest rate exceeds the coupon rate, the firm will issue the bonds for more than face value. E. If the coupon rate exceeds the market interest rate, the firm will issue the bonds for more than face value.

 

165. IFRS _____ firms to remeasure property, plant, and equipment upward for increases in fair value under certain conditions. U.S. GAAP _____ such upward remeasurements.  A. permits; permits B. permits; does not permit C. does not permit: does not permit D. does not permit: permits E. none of the above

 

166. Which of the following is not true? A. Firms reclassify gains and losses initially classified in other comprehensive income into net income when a confirming event subsequently occurs. B. Firms close amounts in other comprehensive income for a period to Accumulated Other Comprehensive Income at the end of the period.C. Net income includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business. D. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income. E. The FASB’s and IASB’s conceptual framework contains a conceptual model for classifying items in net income versus in other comprehensive income.

 

167. Both U.S. GAAP and IFRS often refer to ownership of a(n) _____ of the voting stock of another entity as indicating control, unless evidence indicates that the owner cannot exercise control. A. direct investmentB. indirect investmentC. majorityD. minorityE. effective control

 

168. Which of the following is not true? A. Comprehensive income equals the net amount of revenues, expenses, gains, and losses during an accounting period. B. Authoritative guidance classifies revenues and expenses arising from a firm’s core business as components of net income. C. Net income includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business. D. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income. E. The FASB’s and IASB’s conceptual framework contains a conceptual model for classifying items in net income versus in other comprehensive income.

 

169. The FASB and the IASB are reconsidering the role of uncertainty, or probability, in the definition, recognition, and measurement of liabilities. Existing recognition criteria include a probable future sacrifice of resources; one issue involves the minimum probability level to warrant recognition of an uncertain obligation as a liability. U.S. GAAP does not specify a minimum probability level, although the rule-of-thumb in practice is approximately _____ percent.  A. 50B. 60C. 70D. 80E. 90

 

170. Which of the following is not true? A. Acquisition cost for a merchandising firm includes the costs incurred to purchase and transport the inventory prior to sale. B. Acquisition cost for a manufacturing firm includes the direct material, direct labor, and manufacturing overhead cost to produce the inventory. C. If the market values of inventory items decline below acquisition cost prior to sale, firms must reduce their balance sheet carrying values using the lower of cost or market method.D. U.S. GAAP uses a combination of replacement cost and net realizable values to measure market value. E. U.S. GAAP and IFRS permits firms to remeasure inventories upward when market value exceeds acquisition cost.

 

 

default image
July 1, 2023
    

 

 

161. U.S. GAAP and IFRS require firms to recognize as assets identifiable intangibles acquired in external market transactions.  Which of the following is/are true? A. The exchange between an independent buyer and seller provides evidence of the existence of expected future benefits, and the exchange price provides evidence of the fair value of those benefits. B. In external market transactions, identifiable intangibles include patents, trademarks, customer lists, and other economic resources ready for use, as well as in-process technologies with uncertain future benefits. C. In external market transactions, identifiable intangible assets have either finite lives or indefinite lives.D. In external market transactions, firms must amortize intangible assets with finite lives, generally using the straight-line method. E. all of the above

 

162. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is/are not true? A. U.S. GAAP provides fourteen criteria, any one of which qualifies a lease as a capital lease. B. IFRS provides general criteria for identifying the entity enjoying the rewards and incurring the risk.C. Firms cannot currently apply the fair value option to capital leases. D. The FASB and the IASB have undertaken a joint project involving the lessee’s accounting for leases which may result in treating all leases as capital leases.E. all of the above

 

163. U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is not true? A. The criteria attempt to identify the entity, whether lessor or lessee, that enjoys the benefits and incurs the risk of the leased asset. B. When the lessor enjoys the benefits and bears the risk, the lease is a capital lease.C. When the lessee enjoys the benefits and bears the risk, the lease is a capital lease. D. IFRS provides more general criteria for identifying the entity enjoying the rewards and incurring the risk. E. Firms cannot currently apply the fair value option to capital leases.

 

164. U.S. GAAP and IFRS account for notes and nonconvertible bonds payable similarly.Which of the following is/are not true? A. Firms initially record long-term notes and bonds at their issue price, the present value of the future contractual cash flows discounted at the market interest rate for the bonds at the time of issue. B. The market interest rate at the time of issue is the rate that discounts the contractual cash flows to the initial issue price.C. If the market interest rate equals the coupon rate for the bonds, the firm will issue the bonds for face value.D. If the market interest rate exceeds the coupon rate, the firm will issue the bonds for more than face value. E. If the coupon rate exceeds the market interest rate, the firm will issue the bonds for more than face value.

 

165. IFRS _____ firms to remeasure property, plant, and equipment upward for increases in fair value under certain conditions. U.S. GAAP _____ such upward remeasurements.  A. permits; permits B. permits; does not permit C. does not permit: does not permit D. does not permit: permits E. none of the above

 

166. Which of the following is not true? A. Firms reclassify gains and losses initially classified in other comprehensive income into net income when a confirming event subsequently occurs. B. Firms close amounts in other comprehensive income for a period to Accumulated Other Comprehensive Income at the end of the period.C. Net income includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business. D. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income. E. The FASB’s and IASB’s conceptual framework contains a conceptual model for classifying items in net income versus in other comprehensive income.

 

167. Both U.S. GAAP and IFRS often refer to ownership of a(n) _____ of the voting stock of another entity as indicating control, unless evidence indicates that the owner cannot exercise control. A. direct investmentB. indirect investmentC. majorityD. minorityE. effective control

 

168. Which of the following is not true? A. Comprehensive income equals the net amount of revenues, expenses, gains, and losses during an accounting period. B. Authoritative guidance classifies revenues and expenses arising from a firm’s core business as components of net income. C. Net income includes gains and losses from sales or exchanges of assets or settlements of liabilities related incidentally or peripherally to the firm’s core business. D. Authoritative guidance classifies gains and losses from the remeasurement of certain assets and liabilities as either net income or other comprehensive income. E. The FASB’s and IASB’s conceptual framework contains a conceptual model for classifying items in net income versus in other comprehensive income.

 

169. The FASB and the IASB are reconsidering the role of uncertainty, or probability, in the definition, recognition, and measurement of liabilities. Existing recognition criteria include a probable future sacrifice of resources; one issue involves the minimum probability level to warrant recognition of an uncertain obligation as a liability. U.S. GAAP does not specify a minimum probability level, although the rule-of-thumb in practice is approximately _____ percent.  A. 50B. 60C. 70D. 80E. 90

 

170. Which of the following is not true? A. Acquisition cost for a merchandising firm includes the costs incurred to purchase and transport the inventory prior to sale. B. Acquisition cost for a manufacturing firm includes the direct material, direct labor, and manufacturing overhead cost to produce the inventory. C. If the market values of inventory items decline below acquisition cost prior to sale, firms must reduce their balance sheet carrying values using the lower of cost or market method.D. U.S. GAAP uses a combination of replacement cost and net realizable values to measure market value. E. U.S. GAAP and IFRS permits firms to remeasure inventories upward when market value exceeds acquisition cost.

 

 

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