acct 252 review for 253

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  1. Property, plant and equipment assets are to be initially recorded at what value?
    A. recoverability value
    B. replacement cost
    C. impairment value
    D. historical cost
    D. historical cost
    (this multiple choice question has been scrambled)
  2. How are property, plant and equipment assets to be subsequently valued?
    A. net realizable value
    B. net book vlaue less impairment loss (if any)
    C. historical cost less impairment loss (if any)
    D. lower of cost or market
    B. net book vlaue less impairment loss (if any)
    (this multiple choice question has been scrambled)
  3. What is meant by "impairment" as it relates to property, plant, and equipment assets?
    A. present value of the expected future net cash flows from the use of the asset.
    B. Carrying amount of an asset is greater than the recoverable amount
    C. undiscounted future cash flows from the use of the asset
    D. carrying value of the asset minus the fair value of the asset
    B. Carrying amount of an asset is greater than the recoverable amount
    (this multiple choice question has been scrambled)
  4. The test to determine if property, plant and equipment assets are impaired includes which of the following?
    a. carrying value of the asset minus the fair value of the asset
    b. carrying value of the asset minus the undiscounted future cash flows from the use of the asset
    c. carrying value of the asset minus the present value of the expected furutre net cash flows from the use of the asset
    d. carrying value of the asset minus the market value of the asset
    • b. carrying value of the asset minus the undiscounted future cash flows
    • from the use of the asset
  5. How do we compute the impairment loss?
    A. carrying value of the asset minus the present value of the expected future net cash flows from the use of the asset
    B. carrying value of the asset minus the fair value of the asset
    C. carrying value of the asset minus the undiscounted future cash flows from the use of the asset
    D. carrying value of the asset minus the market value of the asset
    B. carrying value of the asset minus the fair value of the asset
    (this multiple choice question has been scrambled)
  6. Construction costs, to be capitalized include which of the following items?
    a. materials and labor
    b. materials, labor, and capitalized interest cost
    c. materials, labor, variable overhead, pro-rata share of fixed overhead and capitalized interest cost
    d. materials, labor, overhead, capitalized interest, and repair expense
    • c. materials, labor, variable overhead, pro-rata share of fixed overhead
    • and capitalized interest cost
  7. What are the four steps involved in recording a disposal of an asset?
    a. depreciation up-to-date, debit related cost & credit related accumulated depreciation, and debit or credit gain/loss as appropriate
    b. depreciation up-to-date, remove related cost & accumulated depreciation, and record gain/loss as appropriate
    c. depreciation up-to-date, determine maket value, record a gain/loss based on market value, and remove the asset from the premises
    d. none of the above
    • b. depreciation up-to-date, remove related cost & accumulated
    • depreciation, and record gain/loss as appropriate
  8. The two criteria which determine whether a gain or a loss is recorded in an exchange transaction are?
    A. commerical substance and market value
    B. receipt of cash and market value
    C. receipt of cash and replacement value
    D. commerical substance and receipt of cash
    D. commerical substance and receipt of cash
    (this multiple choice question has been scrambled)
  9. Depreciation expense for similar assets might vary from company to company due to judgments related to?
    a. service lives
    b. salvage value
    c. depreciation method
    d. all of the above
    e. none of the above
    d. all of the above
  10. How should a change in estimated service lives of property, plant, and equipment assets should accounted for?
    A. in current and future periods
    B. in future periods only
    C. retroactively
    D. as a restatement of prior period financial statements
    A. in current and future periods
    (this multiple choice question has been scrambled)
  11. Costs incurred internally to create intangibles are
    A. expensed only if they have a limited life
    B. capitalized if they have an indefinite life
    C. capitalized
    D. expensed as incurred
    D. expensed as incurred
    (this multiple choice question has been scrambled)
  12. Costs incurred to purchase intanglibles are
    A. capitalized
    B. expensed as incurred
    C. expensed onl if they have a limited life
    D. capitalized if they have an indefinite life
    A. capitalized
    (this multiple choice question has been scrambled)
  13. Which of the following intangibles assets should not be amoritzed?
    A. copyrights
    B. indefinite life intangibles
    C. all of these intangibles assets should be amortized.
    D. limited life intangibles
    B. indefinite life intangibles
    (this multiple choice question has been scrambled)
  14. The intangible asset goodwill may be
    A. capitalzied only when created internally
    B. capitalized either when purchased or created internally
    C. capitalized only when purchased
    D. written off directly to retained earnings
    C. capitalized only when purchased
    (this multiple choice question has been scrambled)
  15. Purchased goodwill should
    A. be written off as soon as possible against retained earnings
    B. not be amortized
    C. be written off by systematic changes as a regular operating expense over the period benefited
    D. be written off as soon as possible as an extraordinary item
    B. not be amortized
    (this multiple choice question has been scrambled)
  16. The actual impairment loss on an intangible asset is the difference between the asset's
    A. fair value and the expected future net cash flows
    B. the original cost and its book value
    C. carrying amount and the expected undiscounted future net cash flows
    D. carrying amount and its fair value
    D. carrying amount and its fair value
    (this multiple choice question has been scrambled)
  17. Limited-life intangibles are reported at their
    A. liquidation value
    B. carrying amount unless impaired
    C. acquisition cost
    D. replacement cost
    B. carrying amount unless impaired
    (this multiple choice question has been scrambled)
  18. Liabiliteis are
    a. any accounts having credit balances after closing entries are made
    b. deferred credits that are recognized and measured in conformity with generally accepted accounting principles
    c. obligations to transfer ownership shares to other entities in the future
    d. obligations (arising from past transactions) that will be paid (or settled) in the future
    • d. obligations (arising from past transactions) that will be paid (or
    • settled) in the future
  19. Which of the following is the proper way to report a gain contingency?
    A. as an account receivable with additional disclosure explaining the nature of the contingency
    B. as an accrued amount
    C. as deferred revenue
    D. as a disclosure only if the favorable outcome is probable
    D. as a disclosure only if the favorable outcome is probable
    (this multiple choice question has been scrambled)
  20. Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting priniples?
    a. amount of loss is reasonably estimable and event occurs infrequently
    b. amount of loss is reasonably estimable and occurrence of event is probable
    c. event is unusual in nature and occurrence of event is probable
    d. event is unusual in nature and event occurs infrequently
    • b. amount of loss is reasonably estimable and occurrence of event is
    • probable
  21. Long-Term Debt
    A. have original maturity dates that are less than one year
    B. are always classified as current liabilities
    C. have original maturity dates that are longer than one year
    D. is always valued at maturity value
    C. have original maturity dates that are longer than one year
    (this multiple choice question has been scrambled)
  22. The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the
    A. bond par value
    B. registered bond
    C. bond coupon
    D. bond indenture
    D. bond indenture
    (this multiple choice question has been scrambled)
  23. The interest rate written in the terms of the bond indenture is known as the
    A. discounted rate
    B. stated rate
    C. premium rate
    D. effective rate
    B. stated rate
    (this multiple choice question has been scrambled)
  24. The rate of interest actually earned by bondholders is called the
    A. stated rate
    B. premium rate
    C. effective rate
    D. discount rate
    C. effective rate
    (this multiple choice question has been scrambled)
  25. The amount of principle to be repaid at maturity is
    A. discount
    B. premium
    C. par value
    D. amortization
    C. par value
    (this multiple choice question has been scrambled)
  26. The amount of interest expense to be recorded on a bond is
    A. the carrying value times the stated interest rate
    B. the par value times the effective interest rate
    C. the par value times the stated interest rate
    D. the carrying value times the effective interest rate
    D. the carrying value times the effective interest rate
    (this multiple choice question has been scrambled)
  27. A major advantage of the corporate form of organization
    A. both a & c
    B. limited liability for the owners
    C. both a & b
    D. taxation
    E. easier ability to raise capital
    C. both a & b
    (this multiple choice question has been scrambled)
  28. The term used to describe the type of preferred stock whereby dividends not paid in any year must be paid in the futuer before dividends can be paid to the common shareholders
    A. cumulative
    B. callable
    C. participating
    D. convertible
    A. cumulative
    (this multiple choice question has been scrambled)
  29. The amount per share assigned by the corporate charter to each share of common stock is
    A. stated value
    B. issued shares
    C. outstanding shares
    D. par value
    E. additional paid in capital
    D. par value
    (this multiple choice question has been scrambled)
  30. The amount received from a sale of stock by a c orporation that is in excess of par value or stated value of the stock sold
    A. stated value
    B. issued shares
    C. additional paid-in capital
    D. outstanding shares
    E. par value
    C. additional paid-in capital
    (this multiple choice question has been scrambled)
  31. The number of shares issued (or sold) less the number of shares reacquired but have not been cancelled or retired
    A. stated value
    B. par value
    C. additional paid-in capital
    D. issued shares
    E. outstanding shares
    E. outstanding shares
    (this multiple choice question has been scrambled)
  32. Held-to-maturity securities are (reported at) valued using the
    A. fair value method
    B. equity method
    C. amortized cost method
    D. divesture method
    C. amortized cost method
    (this multiple choice question has been scrambled)
  33. Trading securities are (reported at) valued using the
    A. fair value method
    B. divesture method
    C. equity method
    D. amortized cost method
    A. fair value method
    (this multiple choice question has been scrambled)
  34. available-for-sale securities are (reported at) valued using
    A. amortized cost method
    B. fair value method
    C. equity method
    D. divesture method
    B. fair value method
    (this multiple choice question has been scrambled)
  35. Securities representing more than a 20% ownership interest are (reported at) valued using the
    A. amortized cost method
    B. fair value method
    C. divesture method
    D. equity method
    D. equity method
    (this multiple choice question has been scrambled)
  36. An unrealized holding loss on a company's available-for-sale securities should be reflected in the current financial statements as
    a. an extraordinary item shown as a direct reduction from retained earnings
    b. a current loss resulting from holding securities
    c. a note or parenthetical disclosure only
    d. other comprehensive income and deducted in the equity section of the balance sheet
    • d. other comprehensive income and deducted in the equity section of the
    • balance sheet
  37. Byner Corporation accounts for its investment in the common stock of Yount Company under the equity method. Byner Corporation should ordinarily record a cash dividend received from Yount as
    A. an addition to the carrying value of the investment
    B. dividend income
    C. a reduction of the carrying value of the investment
    D. additional paid in capital
    C. a reduction of the carrying value of the investment
    (this multiple choice question has been scrambled)
  38. Under the equity method of accounting for investments, an investor recognizes its shares of the investee's earnins as
    A. dividend income
    B. an addition to the carrying value of the investment
    C. a reduction of the carrying value of the investment
    D. additional paid in capital
    B. an addition to the carrying value of the investment
    (this multiple choice question has been scrambled)
  39. Ownership is considered to be a controlling interest
    A. 20% to 50% equity ownership
    B. available for sale securities
    C. trading securities
    D. Held to maturity securities
    E. over 50% equity ownership
    E. over 50% equity ownership
    (this multiple choice question has been scrambled)
  40. Ownership is considered to be a significant interest
    A. over 50% equity ownership
    B. available for sale securities
    C. Held to maturity securities
    D. trading securities
    E. 20% to 50% equity ownership
    E. 20% to 50% equity ownership
    (this multiple choice question has been scrambled)
Author:
wsrdpc
ID:
27481
Card Set:
acct 252 review for 253
Updated:
2010-08-29 02:28:52
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acct 252 review for 253
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