Question 1

All of the following are benefits of leasing except:

Accepted Answer

A)  They have the ability to shift the tax benefits from depreciation and other deductions from a lessee that has little or no taxable income to a lessor that has substantial taxable income. 
B)  They provide flexibility to change capacity as needed without having to purchase or sell assets. 
C)  They have the ability to reduce the risk of technological obsolescence,relative to outright ownership,by maintaining the flexibility to shift to technologically more advanced assets. 
D)  In an operating lease,the lessee recognizes the signing of the lease as the simultaneous acquisition of a long-term asset and the incurring of a long-term liability for lease payments. 
A)  They have the ability to shift the tax benefits from depreciation and other deductions from a lessee that has little or no taxable income to a lessor that has substantial taxable income. 
B)  They provide flexibility to change capacity as needed without having to purchase or sell assets. 
C)  They have the ability to reduce the risk of technological obsolescence,relative to outright ownership,by maintaining the flexibility to shift to technologically more advanced assets. 
D)  In an operating lease,the lessee recognizes the signing of the lease as the simultaneous acquisition of a long-term asset and the incurring of a long-term liability for lease payments. D

Question 2

Under current U.S.GAAP,unrealized gains and losses from four balance sheet items are reported in accumulated other comprehensive income or loss.Which of the following is not one of the balance sheet items?

Accepted Answer

A)  Derivatives held as cash flow hedges 
B)  Deferred tax assets related to net operating loss carryforwards 
C)  Minimum pension obligations 
D)  Investment securities classified as available for sale 
A)  Derivatives held as cash flow hedges 
B)  Deferred tax assets related to net operating loss carryforwards 
C)  Minimum pension obligations 
D)  Investment securities classified as available for sale B

Question 3

Which is the first date when employees can exercise their stock options?

Accepted Answer

A)  vesting date 
B)  grant date 
C)  exercise date 
D)  liquidating date 
A)  vesting date 
B)  grant date 
C)  exercise date 
D)  liquidating date A

Question 4

All of the following are correct regarding operating leases except:

Accepted Answer

A)  Cash outflow is in the form of rent payments 
B)  The rights to use the property for a specified period of time are conferred to the lessee by the lessor. 
C)  At the end of the lease the lessee returns the property to the lessor 
D)  Depreciation expense can be recorded on the books by the lessee 
A)  Cash outflow is in the form of rent payments 
B)  The rights to use the property for a specified period of time are conferred to the lessee by the lessor. 
C)  At the end of the lease the lessee returns the property to the lessor 
D)  Depreciation expense can be recorded on the books by the lessee

Question 5

A derivative has one or more ____________________,which are a specified interest rate,commodity price,foreign exchange rate,or other variable.

Accepted Answer

The answer of A derivative has one or more ____________________,which...

Question 6

Regarding accounting for troubled debt,which of the following statements is true?

Accepted Answer

A)  The treatment for troubled debt is the same under both U.S.GAAP and IFRS. 
B)  The settlement of troubled debt results in an economic loss to the debtor because the creditor accepts more than the book value of the debt to settle the debt. 
C)  U.S.GAAP uses a "10 percent rule" to determine whether a gain is recognized by the debtor in a troubled debt situation. 
D)  Because IFRS uses the present value approach to determine the magnitude of the settlement for troubled debt,the magnitude of the new book value of the restructured debt will be lower and the gain recognition will be larger under IFRS. 
A)  The treatment for troubled debt is the same under both U.S.GAAP and IFRS. 
B)  The settlement of troubled debt results in an economic loss to the debtor because the creditor accepts more than the book value of the debt to settle the debt. 
C)  U.S.GAAP uses a "10 percent rule" to determine whether a gain is recognized by the debtor in a troubled debt situation. 
D)  Because IFRS uses the present value approach to determine the magnitude of the settlement for troubled debt,the magnitude of the new book value of the restructured debt will be lower and the gain recognition will be larger under IFRS.

Question 7

At January 1,2012,Porter should record an asset and liability with respect to the equipment lease equal to:

Accepted Answer

A)  $258,726 
B)  $239,562 
C)  $275,000 
D)  $0 
A)  $258,726 
B)  $239,562 
C)  $275,000 
D)  $0

Question 8

Under an operating lease agreement the lessee recognizes ______________________________ each period that the leased asset is used.

Accepted Answer

The answer of Under an operating lease agreement the lessee...

Question 9

Under the fair value method of accounting for stock options,firms must value stock options on the date of ____________________.

Accepted Answer

The answer of Under the fair value method of accounting...

Question 10

Which kind of dividend has an interest-bearing promise to pay dividends?

Accepted Answer

A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend 
A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend

Question 11

Where in the financial statements are changes in the fair value of cash flow hedges reported:

Accepted Answer

A)  On the Balance Sheet as part of retained earnings 
B)  On the Income Statement as other gains/losses 
C)  As other comprehensive income and accumulated in other comprehensive income on the Balance Sheet. 
D)  On the Statement of Stockholder's Equity 
A)  On the Balance Sheet as part of retained earnings 
B)  On the Income Statement as other gains/losses 
C)  As other comprehensive income and accumulated in other comprehensive income on the Balance Sheet. 
D)  On the Statement of Stockholder's Equity

Question 12

The first date at which employees can exercise their stock options is termed the _________________________.

Accepted Answer

The answer of The first date at which employees can...

Question 13

Under the fair value method of accounting for stock options,firms must value stock options on the:

Accepted Answer

A)  grant date 
B)  intrinsic date 
C)  measurement date 
D)  fair value date 
A)  grant date 
B)  intrinsic date 
C)  measurement date 
D)  fair value date

Question 14

Many firms use derivative instruments to hedge exposure to changes in the fair value of an asset or liability,or to hedge exposure to variability in expected future cash flows.As an analyst examining the financial reports of a company that uses derivative instruments to hedge,what questions should you ask when thinking about derivatives and accounting quality?

Accepted Answer

Items that

Question 15

Which kind of dividend typically pays dividends with investments in other corporations' stock?

Accepted Answer

A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend 
A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend

Question 16

Gains and losses on cash flow hedges affect earnings ____________________ than those on fair value hedges.

Accepted Answer

The answer of Gains and losses on cash flow hedges...

Question 17

For the year ended December 31,2012,Porter should record depreciation expense for the leased equipment equal to:

Accepted Answer

A)  $55,000 
B)  $39,927 
C)  $47,912 
D)  $0 
A)  $55,000 
B)  $39,927 
C)  $47,912 
D)  $0

Question 18

Which kind of dividend typically pays dividends with additional shares of the corporation's stock?

Accepted Answer

A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend 
A)  property dividend 
B)  stock dividend 
C)  liquidating dividend 
D)  scrip dividend

Question 19

Which of the following is not one of the GAAP classifications for derivatives?

Accepted Answer

A)  Speculative investment 
B)  Fair value hedge 
C)  Asset-liability hedge 
D)  Cash flow hedge 
A)  Speculative investment 
B)  Fair value hedge 
C)  Asset-liability hedge 
D)  Cash flow hedge

Question 20

When firms use derivatives effectively to manage risks,the net gain or loss each period should be relatively ____________________.

Accepted Answer

The answer of When firms use derivatives effectively to manage...

All of the following are benefits of leasing except:

Under current U.S.GAAP,unrealized gains and losses from four balance sheet items are reported in accumulated other comprehensive income or loss.Which of the following is not one of the balance sheet items?

Which is the first date when employees can exercise their stock options?

All of the following are correct regarding operating leases except:

A derivative has one or more ____________________,which are a specified interest rate,commodity price,foreign exchange rate,or other variable.

Regarding accounting for troubled debt,which of the following statements is true?

At January 1,2012,Porter should record an asset and liability with respect to the equipment lease equal to:

Under an operating lease agreement the lessee recognizes ______________________________ each period that the leased asset is used.

Under the fair value method of accounting for stock options,firms must value stock options on the date of ____________________.

Which kind of dividend has an interest-bearing promise to pay dividends?

Where in the financial statements are changes in the fair value of cash flow hedges reported:

The first date at which employees can exercise their stock options is termed the _________________________.

Under the fair value method of accounting for stock options,firms must value stock options on the:

Which kind of dividend typically pays dividends with investments in other corporations' stock?

Gains and losses on cash flow hedges affect earnings ____________________ than those on fair value hedges.

For the year ended December 31,2012,Porter should record depreciation expense for the leased equipment equal to:

Which kind of dividend typically pays dividends with additional shares of the corporation's stock?

Which of the following is not one of the GAAP classifications for derivatives?

When firms use derivatives effectively to manage risks,the net gain or loss each period should be relatively ____________________.

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

Accounting Quality

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

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Exam 7: Financing Activities

All of the following are benefits of leasing except:

Under current U.S.GAAP,unrealized gains and losses from four balance sheet items are reported in accumulated other comprehensive income or loss.Which of the following is not one of the balance sheet items?

Which is the first date when employees can exercise their stock options?

All of the following are correct regarding operating leases except:

A derivative has one or more ____________________,which are a specified interest rate,commodity price,foreign exchange rate,or other variable.

Regarding accounting for troubled debt,which of the following statements is true?

At January 1,2012,Porter should record an asset and liability with respect to the equipment lease equal to:

Under an operating lease agreement the lessee recognizes ______________________________ each period that the leased asset is used.

Under the fair value method of accounting for stock options,firms must value stock options on the date of ____________________.

Which kind of dividend has an interest-bearing promise to pay dividends?

Where in the financial statements are changes in the fair value of cash flow hedges reported:

The first date at which employees can exercise their stock options is termed the _________________________.

Under the fair value method of accounting for stock options,firms must value stock options on the:

Which kind of dividend typically pays dividends with investments in other corporations' stock?

Gains and losses on cash flow hedges affect earnings ____________________ than those on fair value hedges.

For the year ended December 31,2012,Porter should record depreciation expense for the leased equipment equal to:

Which kind of dividend typically pays dividends with additional shares of the corporation's stock?

Which of the following is not one of the GAAP classifications for derivatives?

When firms use derivatives effectively to manage risks,the net gain or loss each period should be relatively ____________________.

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

Accounting Quality

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