Question : 81. Which of the following not true? A. Firms report accounts receivable they : 1245813

81. Which of the following is not true? A. Firms report accounts receivable they expect to collect within one year at the amount of cash the firms expect to receive. B. Both U.S. GAAP and IFRS require firms with significant uncollectible accounts receivable to estimate the amount of uncollectible accounts related to a particular period’s sales and recognize that amount as bad debt expense in the same period as the related revenues. C. Firms typically use a contra account to accounts receivable, such as Allowance for Uncollectibles, to reflect the amount of accounts receivable they do not expect to collect. D. The entry to recognize estimated uncollectible amounts involves a debit to Bad Debt Expense and a credit to Allowance for Uncollectibles.E. The write-off of a particular customer’s account that becomes uncollectible involves a debit to Accounts Receivable and a credit to Allowance for Uncollectibles .

82. Which of the following is/are 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. all of the above

83. 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. If the market values of inventories increase during a period, IFRS permits firms to recognize the unrealized gain to the extent that the firm had previously recognized an unrealized loss on those inventory items. E. If the market values of inventories increase during a period, U.S. GAAP permits firms to recognize the unrealized gain to the extent that the firm had previously recognized an unrealized loss on those inventory items.

84. U.S. GAAP permits firms to measure the cost of goods sold and the amount of ending inventories for a period using the A. specific identification method.B. first-in, first-out (FIFO) cost-flow assumption.C. weighted-average cost-flow assumption.D. last-in, first-out (LIFO) cost-flow assumption.E. all of the above.

85. Firms initially record property, plant, and equipment, sometimes referred to as fixed assets, at acquisition cost, the cash paid or the fair value of other consideration given in exchange for the asset.  Which of the following is/are true? A. Acquisition cost includes all costs necessary to prepare the asset for its intended use. B. Firms capitalize into the asset’s carrying amount subsequent expenditures that extend the service life or increase the benefits of a fixed asset beyond those initially anticipated. C. Buildings and equipment have a finite life, so firms must depreciate their acquisition cost less estimated salvage over the expected service life. D. Firms may use a straight-line method or accelerated depreciation methods. E. all of the above

86. Firms initially record property, plant, and equipment, sometimes referred to as fixed assets, at acquisition cost, the cash paid or the fair value of other consideration given in exchange for the asset.  Which of the following is not true? A. Acquisition cost includes all costs necessary to prepare the asset for its intended use. B. Firms capitalize into the asset’s carrying amount subsequent expenditures that extend the service life or increase the benefits of a fixed asset beyond those initially anticipated. C. Buildings and equipment have a finite life, so firms must depreciate their acquisition cost less estimated salvage over the expected service life. D. Firms may use a straight-line method or accelerated depreciation methods. E. If new information becomes available that indicates that the expected service life or estimated salvage value differs significantly from that initially anticipated, the firm revises its depreciation claimed in prior years and restates the financial statements.

87. Which of the following is/are true? A. Under U.S. GAAP, firms  must test property, plant, and equipment for possible asset impairment when conditions indicate that a significant decrease in fair value has occurred. B. Under U.S. GAAP, firms initially compare the undiscounted cash flows expected from the asset to the asset’s carrying value. C. Under U.S. GAAP, a fixed asset impairment occurs when the asset’s carrying value exceeds the undiscounted cash flows. D. Under U.S. GAAP, the amount of the recognized impairment loss is the excess of the carrying value over the fair value of the asset. E. all of the above

88. Which of the following is not true? A. Under U.S. GAAP, firms  must test property, plant, and equipment for possible asset impairment when conditions indicate that a significant decrease in fair value has occurred. B. Under U.S. GAAP, firms initially compare the undiscounted cash flows expected from the asset to the asset’s carrying value. C. Under U.S. GAAP, a fixed asset impairment occurs when the asset’s carrying value exceeds the undiscounted cash flows. D. Under U.S. GAAP, the amount of the recognized impairment loss is the excess of the carrying value over the fair value of the asset. E. Under U.S. GAAP,  firms recognize an impairment loss when the carrying value of a fixed asset exceeds its recoverable amount, the higher of (1) the fair value less cost to sell, and (2) value in use.

89. Which of the following is not true? A. For accounting purposes, goodwill arises only when a firm acquires another entity in an external market transaction and pays more for that entity than the fair value of the identifiable assets net of identifiable liabilities. B. Goodwill is the excess of the amount paid for the acquired company over the fair value of identifiable net assets. C. Goodwill, because it includes unidentifiable intangible resources, has an indefinite life. D. Indefinite does not mean infinite, only not knowable.E. Firms amortize goodwill.

90. Which of the following is not true? A. Firms must test goodwill annually for impairment. B. Goodwill is the excess of the amount paid for the acquired company over the fair value of identifiable net assets. C. Goodwill, because it includes unidentifiable intangible resources, has an indefinite life. D. U.S. GAAP requires tests for impairment of goodwill as part of a reporting unit  because a firm cannot separate goodwill from other assets.E. U.S. GAAP requires firms to amortize goodwill over its expected useful life.