acct 252 review for 253

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acct 252 review for 253
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2010-08-28 22:28:52
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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. historical cost
    D. impairment value
    C. historical cost
    (this multiple choice question has been scrambled)
  2. How are property, plant and equipment assets to be subsequently valued?
    A. lower of cost or market
    B. net book vlaue less impairment loss (if any)
    C. historical cost less impairment loss (if any)
    D. net realizable value
    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. undiscounted future cash flows from the use of the asset
    C. Carrying amount of an asset is greater than the recoverable amount
    D. carrying value of the asset minus the fair value of the asset
    C. 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 receipt of cash
    B. commerical substance and market value
    C. receipt of cash and market value
    D. receipt of cash and replacement value
    A. 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. as a restatement of prior period financial statements
    C. in future periods only
    D. retroactively
    A. in current and future periods
    (this multiple choice question has been scrambled)
  11. Costs incurred internally to create intangibles are
    A. capitalized
    B. expensed as incurred
    C. expensed only if they have a limited life
    D. capitalized if they have an indefinite life
    B. expensed as incurred
    (this multiple choice question has been scrambled)
  12. Costs incurred to purchase intanglibles are
    A. capitalized if they have an indefinite life
    B. expensed onl if they have a limited life
    C. capitalized
    D. expensed as incurred
    C. capitalized
    (this multiple choice question has been scrambled)
  13. Which of the following intangibles assets should not be amoritzed?
    A. indefinite life intangibles
    B. all of these intangibles assets should be amortized.
    C. copyrights
    D. limited life intangibles
    A. indefinite life intangibles
    (this multiple choice question has been scrambled)
  14. The intangible asset goodwill may be
    A. written off directly to retained earnings
    B. capitalized only when purchased
    C. capitalized either when purchased or created internally
    D. capitalzied only when created internally
    B. capitalized only when purchased
    (this multiple choice question has been scrambled)
  15. Purchased goodwill should
    A. be written off by systematic changes as a regular operating expense over the period benefited
    B. not be amortized
    C. be written off as soon as possible against retained earnings
    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. carrying amount and the expected undiscounted future net cash flows
    B. the original cost and its book value
    C. fair value and the expected 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. carrying amount unless impaired
    B. replacement cost
    C. acquisition cost
    D. liquidation value
    A. 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 a disclosure only if the favorable outcome is probable
    B. as deferred revenue
    C. as an account receivable with additional disclosure explaining the nature of the contingency
    D. as an accrued amount
    A. 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. are always classified as current liabilities
    B. is always valued at maturity value
    C. have original maturity dates that are longer than one year
    D. have original maturity dates that are less than one year
    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. effective rate
    B. stated rate
    C. premium rate
    D. discounted 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. discount rate
    C. premium rate
    D. effective rate
    D. effective rate
    (this multiple choice question has been scrambled)
  25. The amount of principle to be repaid at maturity is
    A. amortization
    B. premium
    C. par value
    D. discount
    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 carrying value times the effective interest rate
    D. the par value times the stated interest rate
    C. 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. easier ability to raise capital
    B. both a & c
    C. taxation
    D. both a & b
    E. limited liability for the owners
    D. 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. convertible
    C. callable
    D. participating
    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. additional paid in capital
    B. par value
    C. outstanding shares
    D. stated value
    E. issued shares
    B. 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. additional paid-in capital
    C. par value
    D. issued shares
    E. outstanding shares
    B. 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. additional paid-in capital
    B. issued shares
    C. outstanding shares
    D. stated value
    E. par value
    C. outstanding shares
    (this multiple choice question has been scrambled)
  32. Held-to-maturity securities are (reported at) valued using the
    A. divesture method
    B. fair value method
    C. amortized cost method
    D. equity method
    C. amortized cost method
    (this multiple choice question has been scrambled)
  33. Trading securities are (reported at) valued using the
    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)
  34. available-for-sale securities are (reported at) valued using
    A. amortized cost method
    B. fair value method
    C. divesture method
    D. equity 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. equity method
    B. divesture method
    C. fair value method
    D. amortized cost method
    A. 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. dividend income
    B. a reduction of the carrying value of the investment
    C. an addition to the carrying value of the investment
    D. additional paid in capital
    B. 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. a reduction of the carrying value of the investment
    C. an addition to the carrying value of the investment
    D. additional paid in capital
    C. 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. trading securities
    C. available for sale 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. trading securities
    B. over 50% equity ownership
    C. Held to maturity securities
    D. 20% to 50% equity ownership
    E. available for sale securities
    D. 20% to 50% equity ownership
    (this multiple choice question has been scrambled)

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