Question 1

Using the information provided by Falcon Networks , determine the federal effective tax rate for 2012.

Accepted Answer

A)  33.52% 
B)  35.00% 
C)  42.25% 
D)  45.49% 
A)  33.52% 
B)  35.00% 
C)  42.25% 
D)  45.49% A

Question 2

Analysts concerns with postretirement benefits include all of the following except:

Accepted Answer

A)  Should the underfunded postretirement benefit obligation be added to liabilities in assessing risk? 
B)  How reasonable are the firms' assumptions regarding health care cost increases? 
C)  Is the postretirement benefit fund adequately paying benefits? 
D)  Is the postretirement benefit fund generating returns consistent with the expected rate of return? 
A)  Should the underfunded postretirement benefit obligation be added to liabilities in assessing risk? 
B)  How reasonable are the firms' assumptions regarding health care cost increases? 
C)  Is the postretirement benefit fund adequately paying benefits? 
D)  Is the postretirement benefit fund generating returns consistent with the expected rate of return? C

Question 3

Falcon Networks
Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below:
 
Based on the information provided by Falcon Networks how much cash did income taxes use during 2012?

Accepted Answer

A)  $154.19 million 
B)  $54.17 million 
C)  $208.36 million 
D)  $284.84 million 
A)  $154.19 million 
B)  $54.17 million 
C)  $208.36 million 
D)  $284.84 million A

Question 4

Using the information provided by Falcon Networks determine the combined effective tax rate for 2012.

Accepted Answer

A)  33.52% 
B)  35.00% 
C)  42.25% 
D)  45.49% 
A)  33.52% 
B)  35.00% 
C)  42.25% 
D)  45.49%

Question 5

Which of the following would not be suggestive of a company recognizing sales too early?

Accepted Answer

A)  large and volatile amounts of uncollectible accounts receivable 
B)  excessive warranty expenditures 
C)  large growth in accounts receivable 
D)  unusually large amount of returned goods 
A)  large and volatile amounts of uncollectible accounts receivable 
B)  excessive warranty expenditures 
C)  large growth in accounts receivable 
D)  unusually large amount of returned goods

Question 6

One sign that a company may be recognizing sales too early is that it has unusually large amounts of ______________________________.

Accepted Answer

The answer of One sign that a company may be...

Question 7

Which of the following calculations is used to determine the amount of the liability reported on the balance sheet for underfunding?

Accepted Answer

A)  Plan assets less projected benefit obligation. 
B)  Projected benefit obligation less plan assets. 
C)  Plan assets less accumulated benefit obligation. 
D)  Accumulated benefit obligation less plan assets. 
A)  Plan assets less projected benefit obligation. 
B)  Projected benefit obligation less plan assets. 
C)  Plan assets less accumulated benefit obligation. 
D)  Accumulated benefit obligation less plan assets.

Question 8

A typical defined benefit pension plan formula includes all of the following except :

Accepted Answer

A)  the number of years of employee service 
B)  the fair market value of pension plan assets 
C)  a credit for each year of annual service 
D)  the final salary at retirement date 
A)  the number of years of employee service 
B)  the fair market value of pension plan assets 
C)  a credit for each year of annual service 
D)  the final salary at retirement date

Question 9

All of the following conditions signal that revenue recognition may have been recorded too early except :

Accepted Answer

A)  large and volatile amounts of uncollectible accounts receivable. 
B)  a decrease in the number of days accounts receivable are outstanding. 
C)  unusually large amounts of returned goods. 
D)  excessive warranty expenditures. 
A)  large and volatile amounts of uncollectible accounts receivable. 
B)  a decrease in the number of days accounts receivable are outstanding. 
C)  unusually large amounts of returned goods. 
D)  excessive warranty expenditures.

Question 10

A company that uses LIFO will experience a(n) ______________________________ during a period it sells more units than it purchases.

Accepted Answer

The answer of A company that uses LIFO will experience...

Question 11

A company may try to paint a favorable picture of itself by accelerating the timing of revenues or estimating the collectible amounts too aggressively. In these cases the quality of accounting information declines because it does not represent the company's true economic condition and may not be sustainable. List four conditions that might suggest that a company is recognizing revenues too early?

Accepted Answer

1. Large and volatile amounts of uncolle

Question 12

Recording municipal bond interest received in the general ledger will generate a(n) _________________ difference

Accepted Answer

The answer of Recording municipal bond interest received in the...

Question 13

Companies that engage in long-term contracts can recognize income using either the _____________________________________________ method or the ________________________________________ method.

Accepted Answer

percentage

Question 14

If the portions of the firm's foreign operations in higher-tax-rate countries grew more rapidly than foreign operations in lower-tax-rate countries, the company may seek out more tax effective ways of operating abroad through all of the following means except :

Accepted Answer

A)  Assess whether transfer prices or cost allocations can be adjusted to shift income from high-tax-rate to low-tax-rate jurisdictions. 
B)  Shift from domestic to foreign borrowing to increase deductions for interest against foreign-source income. 
C)  Shift from debt to equity financing of foreign operations to increase interest deductions against foreign-source income. 
D)  Shift some operations, like marketing, to the United States where the average tax rate is lower. 
A)  Assess whether transfer prices or cost allocations can be adjusted to shift income from high-tax-rate to low-tax-rate jurisdictions. 
B)  Shift from domestic to foreign borrowing to increase deductions for interest against foreign-source income. 
C)  Shift from debt to equity financing of foreign operations to increase interest deductions against foreign-source income. 
D)  Shift some operations, like marketing, to the United States where the average tax rate is lower.

Question 15

Which of the following is not a disclosure for derivatives required under SFAS No. 133?

Accepted Answer

A)  Firms must describe their risk management strategy and how particular derivatives help accomplish their hedging objectives. 
B)  For fair value and cash flow hedges, firms must disclose the net gain or loss recognized in earnings resulting from the hedges' ineffectiveness and the line item on the income statement that includes this net gain or loss. 
C)  For cash flow hedges, firms must describe the transactions or events that will result in reclassifying gains and losses from other comprehensive income to net income and the estimated amount of such reclassifications during the next 12 months. 
D)  The specifics of a model that simulates with a 95 percent or other confidence level the minimum, maximum, or average amount of loss that a firm would incur. 
A)  Firms must describe their risk management strategy and how particular derivatives help accomplish their hedging objectives. 
B)  For fair value and cash flow hedges, firms must disclose the net gain or loss recognized in earnings resulting from the hedges' ineffectiveness and the line item on the income statement that includes this net gain or loss. 
C)  For cash flow hedges, firms must describe the transactions or events that will result in reclassifying gains and losses from other comprehensive income to net income and the estimated amount of such reclassifications during the next 12 months. 
D)  The specifics of a model that simulates with a 95 percent or other confidence level the minimum, maximum, or average amount of loss that a firm would incur.

Question 16

The projected benefit obligation measures:

Accepted Answer

A)  the pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels. 
B)  an estimated total benefit at retirement and then computes the level cost that will be sufficient, together with interest expected to accumulate at the assumed rate, to provide the total benefits at retirement. 
C)  the pension obligation on the basis of the plan formula applied to years of service to date and based on future salary levels. 
D)  the shortest possible period for funding to maximize the tax deduction. 
A)  the pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels. 
B)  an estimated total benefit at retirement and then computes the level cost that will be sufficient, together with interest expected to accumulate at the assumed rate, to provide the total benefits at retirement. 
C)  the pension obligation on the basis of the plan formula applied to years of service to date and based on future salary levels. 
D)  the shortest possible period for funding to maximize the tax deduction.

Question 17

Under U.S. GAAP, application of the LIFO and FIFO inventory methods result in differences in the balance sheet, income statement and cash flow statement. Compare and contrast the effect of the two methods on each financial statement and determine the advantages and disadvantages of each method.

Accepted Answer

The answer of Under U.S. GAAP, application of the LIFO...

Question 18

The _____________________________________________ is equal to the actuarial present value of amounts that the employer expects to pay to retired employees, based on the employees' service to date and using expected future salary amounts.

Accepted Answer

projected

Question 19

All of the following are conditions for revenue recognition outlined by SAB 104 except :

Accepted Answer

A)  There is pervasive evidence that an arrangement exists. 
B)  Delivery has occurred or services have been performed. 
C)  The seller's price to the buyer can be variable. 
D)  Collectability is reasonably assured. 
A)  There is pervasive evidence that an arrangement exists. 
B)  Delivery has occurred or services have been performed. 
C)  The seller's price to the buyer can be variable. 
D)  Collectability is reasonably assured.

Question 20

When input prices are increasing, companies that use the LIFO method of accounting for inventory will report:

Accepted Answer

A)  Lower cost of goods sold amounts in comparison to the FIFO method 
B)  Higher sales amounts in comparison to the FIFO method 
C)  Higher ending inventory amounts in comparison to the FIFO method 
D)  Lower gross profit margins in comparison to the FIFO method 
A)  Lower cost of goods sold amounts in comparison to the FIFO method 
B)  Higher sales amounts in comparison to the FIFO method 
C)  Higher ending inventory amounts in comparison to the FIFO method 
D)  Lower gross profit margins in comparison to the FIFO method

Using the information provided by Falcon Networks , determine the federal effective tax rate for 2012.

Analysts concerns with postretirement benefits include all of the following except:

Falcon Networks Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below: Based on the information provided by Falcon Networks how much cash did income taxes use during 2012?

Using the information provided by Falcon Networks determine the combined effective tax rate for 2012.

Which of the following would not be suggestive of a company recognizing sales too early?

One sign that a company may be recognizing sales too early is that it has unusually large amounts of ______________________________.

Which of the following calculations is used to determine the amount of the liability reported on the balance sheet for underfunding?

A typical defined benefit pension plan formula includes all of the following except :

All of the following conditions signal that revenue recognition may have been recorded too early except :

A company that uses LIFO will experience a(n) ______________________________ during a period it sells more units than it purchases.

Recording municipal bond interest received in the general ledger will generate a(n) _________________ difference

Companies that engage in long-term contracts can recognize income using either the _____ method or the method.

If the portions of the firm's foreign operations in higher-tax-rate countries grew more rapidly than foreign operations in lower-tax-rate countries, the company may seek out more tax effective ways of operating abroad through all of the following means except :

Which of the following is not a disclosure for derivatives required under SFAS No. 133?

The projected benefit obligation measures:

Under U.S. GAAP, application of the LIFO and FIFO inventory methods result in differences in the balance sheet, income statement and cash flow statement. Compare and contrast the effect of the two methods on each financial statement and determine the advantages and disadvantages of each method.

The _____________________________________________ is equal to the actuarial present value of amounts that the employer expects to pay to retired employees, based on the employees' service to date and using expected future salary amounts.

All of the following are conditions for revenue recognition outlined by SAB 104 except :

When input prices are increasing, companies that use the LIFO method of accounting for inventory will report:

Overview of Financial Reporting, Financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Recognition

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Financing Activities

Investing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Exam 9: Accounting Quality

Using the information provided by Falcon Networks , determine the federal effective tax rate for 2012.

Analysts concerns with postretirement benefits include all of the following except:

Falcon Networks Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below: Based on the information provided by Falcon Networks how much cash did income taxes use during 2012?

Using the information provided by Falcon Networks determine the combined effective tax rate for 2012.

Which of the following would not be suggestive of a company recognizing sales too early?

One sign that a company may be recognizing sales too early is that it has unusually large amounts of ______________________________.

Which of the following calculations is used to determine the amount of the liability reported on the balance sheet for underfunding?

A typical defined benefit pension plan formula includes all of the following except :

All of the following conditions signal that revenue recognition may have been recorded too early except :

A company that uses LIFO will experience a(n) ______________________________ during a period it sells more units than it purchases.

Recording municipal bond interest received in the general ledger will generate a(n) _________________ difference

Companies that engage in long-term contracts can recognize income using either the _____________________________________________ method or the ________________________________________ method.

If the portions of the firm's foreign operations in higher-tax-rate countries grew more rapidly than foreign operations in lower-tax-rate countries, the company may seek out more tax effective ways of operating abroad through all of the following means except :

Which of the following is not a disclosure for derivatives required under SFAS No. 133?

The projected benefit obligation measures:

Under U.S. GAAP, application of the LIFO and FIFO inventory methods result in differences in the balance sheet, income statement and cash flow statement. Compare and contrast the effect of the two methods on each financial statement and determine the advantages and disadvantages of each method.

The _____________________________________________ is equal to the actuarial present value of amounts that the employer expects to pay to retired employees, based on the employees' service to date and using expected future salary amounts.

All of the following are conditions for revenue recognition outlined by SAB 104 except :

When input prices are increasing, companies that use the LIFO method of accounting for inventory will report:

Overview of Financial Reporting, Financial Statement Analysis, and Valuation

Asset and Liability Valuation and Income Recognition

Income Flows Versus Cash Flows: Understanding the Statement of Cash Flows

Profitability Analysis

Risk Analysis

Financing Activities

Investing Activities

Operating Activities

Forecasting Financial Statements

Risk-Adjusted Expected Rates of Return and the Dividends Valuation Approach

Valuation: Cash-Flow Based Approaches

Valuation: Earnings-Based Approaches

Valuation: Market-Based Approaches

Filters

Companies that engage in long-term contracts can recognize income using either the _____ method or the method.