Question :
151. Income before taxes for financial reporting usually differs from taxable : 1230457
151. Income before taxes for financial reporting usually differs from taxable income reported to tax authorities. Which of the following is/are not true? A. Some of the differences may arise because of permanent differences (items that affect income for financial reporting but never affect taxable income, or vice versa).B. Some of the differences may arise because of temporary differences (items that affect income for financial reporting in a different period than for tax reporting). C. The difference between income tax expense and income tax payable represents the tax effects of temporary differences: either the firm will receive future benefits (deferred tax assets) or it must pay future taxes (deferred tax liabilities).D. U.S. GAAP and IFRS require firms to measure income tax expense based on the taxes assessed on the firm by income tax authorities. E. all of the above
152. Income before taxes for financial reporting usually differs from taxable income reported to tax authorities. Which of the following is/are not true? A. Some of the differences may arise because of permanent differences (items that affect income for financial reporting but never affect taxable income, or vice versa).B. Some of the differences may arise because of temporary differences (items that affect income for financial reporting in a different period than for tax reporting). C. The difference between income tax expense and income tax payable represents the tax effects of permanent differences: either the firm will receive future benefits (deferred tax assets) or it must pay future taxes (deferred tax liabilities).D. U.S. GAAP and IFRS require firms to measure income tax expense based on income for financial reporting (excluding permanent differences) and the income tax authorities impose taxes on taxable income. E. all of the above
153. Firms sometimes acquire bonds or capital stock of other entities for their expected returns (through interest, dividends, and price appreciation) without any intent to exert influence or control over the other entity. Which of the following is/are true? A. U.S. GAAP and IFRS presume that the acquisition of any amount of bonds, and the acquisition of less than 20% of the voting stock of another entity implies an inability to exert significant influence or control. B. Firms may classify such securities as debt securities held to maturity (IFRS uses the term held-to-maturity investments). C. Firms may classify such securities as trading securities (IFRS uses the term financial assets at fair value through profit or loss). D. Firms may classify such securities as securities available for sale (IFRS uses the term available-for-sale financial assets). E. all of the above
154. Firms sometimes acquire bonds or capital stock of other entities for their expected returns (through interest, dividends, and price appreciation) without any intent to exert influence or control over the other entity. Which of the following is/are not true? A. U.S. GAAP and IFRS presume that the acquisition of any amount of bonds, and the acquisition of less than 50% of the voting stock of another entity implies an inability to exert significant influence or control. B. Firms may classify such securities as debt securities held to maturity (IFRS uses the term held-to-maturity investments). C. Firms may classify such securities as trading securities (IFRS uses the term financial assets at fair value through profit or loss). D. Firms may classify such securities as securities available for sale (IFRS uses the term available-for-sale financial assets). E. all of the above
155. Firms sometimes acquire bonds or capital stock of other entities for their expected returns (through interest, dividends, and price appreciation) without any intent to exert influence or control over the other entity. Which of the following is/are not true? A. U.S. GAAP and IFRS presume that the acquisition of any amount of bonds, and the acquisition of less than 20% of the voting stock of another entity implies an inability to exert significant influence or control. B. Firms may classify such securities as debt securities held for short-term profit (IFRS uses the term held-for-maturity investments). C. Firms may classify such securities as trading securities (IFRS uses the term financial assets at fair value through profit or loss). D. Firms may classify such securities as securities available for sale (IFRS uses the term available-for-sale financial assets). E. all of the above
156. Firms often acquire derivative instruments to hedge interest rate, exchange rate, commodity price, and other risks. U.S. GAAP and IFRS classify derivatives into which of the following categories? A. Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, only. B. Cash flow hedges of an existing asset or liability or of a forecasted transaction, only. C. Nonhedging derivative, only.D. Fair value hedges of a recognized asset or liability or of an unrecognized firm commitment, cash flow hedges of an existing asset or liability or of a forecasted transaction, and nonhedging derivative.E. none of the above
157. Firms must designate each derivative as a hedging instrument, or else accounting views the derivative as a nonhedging instrument. Furthermore, firms must designate each hedging instrument as either a fair value hedge or a cash flow hedge. The accounting for fair value hedges A. remeasures both the hedged item and the derivative to fair value each period and recognize any unrealized gains and losses in net income. B. remeasures the derivative to fair value each period and include the unrealized gain or loss in other comprehensive income to the extent that the derivative instrument is effective in neutralizing risk. When the firm settles the hedged item, transfer the previously unrealized gain or loss from other comprehensive income to net income. C. remeasures the derivative to fair value each period and include the unrealized gain or loss in net income. D. all of the aboveE. none of the above
158. Firms must designate each derivative as a hedging instrument, or else accounting views the derivative as a nonhedging instrument. Furthermore, firms must designate each hedging instrument as either a fair value hedge or a cash flow hedge. The accounting for cash flow hedges A. remeasures both the hedged item and the derivative to fair value each period and recognize any unrealized gains and losses in net income. B. remeasures the derivative to fair value each period and include the unrealized gain or loss in other comprehensive income to the extent that the derivative instrument is effective in neutralizing risk. When the firm settles the hedged item, transfer the previously unrealized gain or loss from other comprehensive income to net income. C. remeasures the derivative to fair value each period and include the unrealized gain or loss in net income. D. all of the aboveE. none of the above
159. Firms must designate each derivative as a hedging instrument, or else accounting views the derivative as a nonhedging instrument. Furthermore, firms must designate each hedging instrument as either a fair value hedge or a cash flow hedge. The accounting for nonhedging derivatives A. remeasures both the hedged item and the derivative to fair value each period and recognize any unrealized gains and losses in net income. B. remeasures the derivative to fair value each period and include the unrealized gain or loss in other comprehensive income to the extent that the derivative instrument is effective in neutralizing risk. When the firm settles the hedged item, transfer the previously unrealized gain or loss from other comprehensive income to net income. C. remeasures the derivative to fair value each period and include the unrealized gain or loss in net income. D. all of the aboveE. none of the above
160. Firms sometimes invest in the common stock of other entities in order to exert significant influence or control over the other entity. U.S. GAAP and IFRS assume that firms owning between _____ of the voting stock of another entity can exert significant influence. A. 10% and 40%B. 15% and 45%C. 20% and 50%D. 25% and 55%E. 30% and 60%
