INTRUCTIONS: This is a voluntary extra credit assignment. Those who elect to do it and turn the assignment in latest on December 15, 2014, will get a maximum of 5 points added to their final score. The score will be prorated based on how many you answered correctly. Submit you answer on a clean sheet of paper. Do not cycle the answer choices on the question paper. Submit your answers latest on the day of the finals.
1.
Which organization is responsible for issuing Emerging Issues Task Force Statements?
A)
FASB
B)
CAP
C)
APB
D)
SEC
2.
An effective capital allocation process
A)
promotes productivity.
B)
encourages innovation.
C)
provides an efficient market for buying and selling securities.
D)
all of these.
3.
The American Institute of Certified Public Accountants (AICPA) continues to be involved in all of the following except
A)
developing and enforcing professional ethics.
B)
developing auditing standards.
C)
providing professional education programs.
D)
all of the above.
4.
What would be an advantage of having all countries adopt and follow the same accounting standards?
A)
Consistency.
B)
Comparability.
C)
Lower preparation costs.
D)
b and c
5.
The accounting principle of expense recognition is best demonstrated by
A)
not recognizing any expense unless some revenue is realized.
B)
associating effort (expense) with accomplishment (revenue).
C)
recognizing prepaid rent received as revenue.
D)
establishing an Appropriation for Contingencies account.
6.
The assumption that a company will not be sold or liquidated in the near future is known as the
A)
economic entity assumption.
B)
monetary unit assumption.
C)
periodicity assumption.
D)
none of these.
7.
Which of the following are the two components of the revenue recognition principle?
A)
Cash is received and the amount is material.
B)
Recognition occurs when and earned realized or realizable.
C)
Production is complete and there is an active market for the product.
D)
Cash is realized or realizable and production is complete.
8.
Under Statement of Financial Accounting Concepts No. 2, free from error is an ingredient of the fundamental quality of
Faithful Representation
Relevance
A)
Yes
Yes
B)
No
Yes
C)
Yes
No
D)
No
No
9.
External events do not include
A)
interaction between an entity and its environment.
B)
a change in the price of a good or service that an entity buys or sells, a flood or earthquake.
C)
improvement in technology by a competitor.
D)
using buildings and machinery in operations.
10.
A journal entry to record a payment on account will include a
A)
debit to accounts receivable.
B)
credit to accounts receivable.
C)
debit to accounts payable.
D)
credit to accounts payable.
11.
A reversing entry should never be made for an adjusting entry that
A)
accrues unrecorded revenue.
B)
adjusts expired costs from an asset account to an expense account.
C)
accrues unrecorded expenses.
D)
adjusts unexpired costs from an expense account to an asset account.
12.
The Supplies account had a balance at the beginning of year 3 of $8,000 (before the reversing entry). Payments for purchases of supplies during year 3 amounted to $50,000 and were recorded as expense. A physical count at the end of year 3 revealed supplies costing $9,500 were on hand. Reversing entries are used by this company. The required adjusting entry at the end of year 3 will include a debit to:
A)
Supplies Expense for $1,500.
B)
Supplies for $1,500.
C)
Supplies Expense for $48,500.
D)
Supplies for $9,500.
13.
Which of the following earnings per share figures must be disclosed on the face of the income statement?
A)
EPS for income before taxes.
B)
The effect on EPS from unusual items.
C)
EPS for gross profit.
D)
EPS for income from continuing operations.
14.
Manning Company has the following items: write-down of inventories, $360,000; loss on disposal of Sports Division, $555,000; and loss due to strike, $339,000. Ignoring income taxes, what
