Question 1

Under GAAP, a provision for a contingent loss is considered to be probable if the probability of its occurrence is ________.

Accepted Answer

A)  slight 
B)  likely to occur 
C)  virtually certain 
D)  reasonably possible 
A)  slight 
B)  likely to occur 
C)  virtually certain 
D)  reasonably possible

Question 2

Which of the following would not be considered when evaluating whether to record a contingent loss for pending litigation?

Accepted Answer

A)  the type of litigation involved 
B)  the ability to make a reasonable estimate of the amount of the loss 
C)  time period in which the underlying cause of action occurred 
D)  the probability of an unfavorable outcome 
A)  the type of litigation involved 
B)  the ability to make a reasonable estimate of the amount of the loss 
C)  time period in which the underlying cause of action occurred 
D)  the probability of an unfavorable outcome

Question 3

A company gives each of its 80 employees (assume they were all employed continuously through 2018 and 2019) 12 days of vacation a year if they are employed at the end of the year. The vacation accumulates and may be taken starting January 1 of the next year. The employees work 8 hours per day. In 2018, they made $17.50 per hour and in 2019 they made $20 per hour. During 2019, they took an average of 8 days of vacation each. The company's policy is to record the liability existing at the end of each year at the wage rate for that year. Under U.S. GAAP, what amount of vacation liability would be reflected on the 2018 and 2019 balance sheets?

Accepted Answer

At the end of 2018, the company will acc

Question 4

Pegasus Corp. signed a three-month, zero-interest-bearing $323,000 note on November 1, 2019 for the purchase of $250,000 of inventory. If Pegasus makes adjusting entries only at the end of the year, the adjusting entry made at December 31, 2019 will include a ________.

Accepted Answer

A)  debit to Note Payable for $24,333 
B)  debit to Interest Expense for $48,667 
C)  credit to Note Payable for $24,333 
D)  credit to Interest Expense for $48,667 
A)  debit to Note Payable for $24,333 
B)  debit to Interest Expense for $48,667 
C)  credit to Note Payable for $24,333 
D)  credit to Interest Expense for $48,667

Question 5

In a service-type warranty, warranty revenue is ________.

Accepted Answer

A)  not recognized 
B)  recognized equally over the warranty period 
C)  recognized only in the last year of the warranty period 
D)  recognized in the year of sale of the associated product 
A)  not recognized 
B)  recognized equally over the warranty period 
C)  recognized only in the last year of the warranty period 
D)  recognized in the year of sale of the associated product

Question 6

What are compensated absences? How does a company account for them?

Accepted Answer

Compensated absences are employer-paid t

Question 7

A liability for a contingent loss will be accrued and reported on the balance sheet if the occurrence of the obligation is at least reasonably possible.

Accepted Answer

A) True 
 B)False

Question 8

Pegasus Corp. signed a three-month, 6% note on November 1, 2019 for the purchase of $260,000 of inventory. If Pegasus makes adjusting entries only at the end of the year, the adjusting entry made at December 31, 2019 will include a ________. (Do not round any intermediary calculations. Round your final answer to the nearest dollar.)

Accepted Answer

A)  debit to Note Payable for $2,600 
B)  debit to Interest Expense for $2,600 
C)  credit to Note Payable for $15,600 
D)  debit to Interest Expense for $3,900 
A)  debit to Note Payable for $2,600 
B)  debit to Interest Expense for $2,600 
C)  credit to Note Payable for $15,600 
D)  debit to Interest Expense for $3,900

Under GAAP, a provision for a contingent loss is considered to be probable if the probability of its occurrence is ________.

Which of the following would not be considered when evaluating whether to record a contingent loss for pending litigation?

Pegasus Corp. signed a three-month, zero-interest-bearing $323,000 note on November 1, 2019 for the purchase of $250,000 of inventory. If Pegasus makes adjusting entries only at the end of the year, the adjusting entry made at December 31, 2019 will include a ________.

In a service-type warranty, warranty revenue is ________.

What are compensated absences? How does a company account for them?

A liability for a contingent loss will be accrued and reported on the balance sheet if the occurrence of the obligation is at least reasonably possible.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

Extenssion: Ol Revenue Recognition Previous Standard

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, Cost Allocation

Long-Term Operating Assets: Departures From Historical Cost

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Leases

Extension: Ol Accounting for Leases Current Standard

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

The Statement of Cash Flows

Filters

Exam 13: Operating Liabilities and Contingencies

Under GAAP, a provision for a contingent loss is considered to be probable if the probability of its occurrence is ________.

Which of the following would not be considered when evaluating whether to record a contingent loss for pending litigation?

Pegasus Corp. signed a three-month, zero-interest-bearing $323,000 note on November 1, 2019 for the purchase of $250,000 of inventory. If Pegasus makes adjusting entries only at the end of the year, the adjusting entry made at December 31, 2019 will include a ________.

In a service-type warranty, warranty revenue is ________.

What are compensated absences? How does a company account for them?

A liability for a contingent loss will be accrued and reported on the balance sheet if the occurrence of the obligation is at least reasonably possible.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

Extenssion: Ol Revenue Recognition Previous Standard

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, Cost Allocation

Long-Term Operating Assets: Departures From Historical Cost

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Leases

Extension: Ol Accounting for Leases Current Standard

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

The Statement of Cash Flows

Filters