Question 1

According to U.S.GAAP,which of the following provides the most reliable measure for fair value measurement?

Accepted Answer

A)  Observable market data serving as inputs into estimates into present value-based measurements such as foreign exchange rates. 
B)  Quoted market prices of identical assets or liabilities in inactive markets 
C)  Observable quoted market prices in active markets for identical assets or liabilities 
D)  Unobservable inputs used by the reporting entity when modeling how the market would determine the fair value of the asset or liability in question 
A)  Observable market data serving as inputs into estimates into present value-based measurements such as foreign exchange rates. 
B)  Quoted market prices of identical assets or liabilities in inactive markets 
C)  Observable quoted market prices in active markets for identical assets or liabilities 
D)  Unobservable inputs used by the reporting entity when modeling how the market would determine the fair value of the asset or liability in question

Question 2

Porter Corporation
On January 1,2012,Porter Corporation signed a five-year non-cancelable lease for certain machinery.The terms of the lease called for:  
-What accounting method should Porter use to account for the equipment lease?

Accepted Answer

A)  Operating Lease method 
B)  Capital Lease method 
C)  Equipment Lease method 
D)  Lessee Accounting method 
A)  Operating Lease method 
B)  Capital Lease method 
C)  Equipment Lease method 
D)  Lessee Accounting method

Question 3

Which of the following does not represent an acceptable method of transferring receivables to increase cash flow?

Accepted Answer

A)  With recourse 
B)  Without recourse 
C)  Factoring 
D)  Tax deferred Method 
A)  With recourse 
B)  Without recourse 
C)  Factoring 
D)  Tax deferred Method

Question 4

Santa Corporation
Santa Corporation manufactures Christmas decorations and supplies throughout the world.The company owns property,plants,and equipment and also enters into operating leases for certain facilities.Assume that Santa's incremental borrowing rate is 8%.The company's tax rate is 40%.Listed below are selected financial data for Santa and a portion of the company's operating lease footnote.
    
-Using the information provided by Santa Corporation,calculate the company's 2012 fixed asset ratio.

Accepted Answer

A)  3.0 
B)  3.65 
C)  3.23 
D)  5.21 
A)  3.0 
B)  3.65 
C)  3.23 
D)  5.21

Question 5

Which is the date when a firm gives a stock option to employees?

Accepted Answer

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

Question 6

Santa Corporation
Santa Corporation manufactures Christmas decorations and supplies throughout the world.The company owns property,plants,and equipment and also enters into operating leases for certain facilities.Assume that Santa's incremental borrowing rate is 8%.The company's tax rate is 40%.Listed below are selected financial data for Santa and a portion of the company's operating lease footnote.
    
-Using the information provided by Santa Corporation,calculate the present value of the operating leases.

Accepted Answer

A)  $2,155,843 
B)  $2,024,945 
C)  $1,482,390 
D)  $2,854,452 
A)  $2,155,843 
B)  $2,024,945 
C)  $1,482,390 
D)  $2,854,452

Question 7

The _________________________ is the date a firm gives a stock option to employees.

Accepted Answer

The answer of The _________________________ is the date a firm...

Question 8

FASB has set forth all of the following conditions for recognizing transfers of receivables as sales only if the following conditions of surrendering control of the receivables are met except:

Accepted Answer

A)  The assets transferred have been isolated from the selling firm. 
B)  The buying firm obtains the right to pledge or exchange the transferred assets,and no condition both constrains the transferee from taking advantage of its right and provides more than a trivial benefit to the transferor. 
C)  The selling firm does not maintain effective control over the assets transferred through (a)an agreement that both entitles and obligates it to repurchase the assets or (b)the
Ability to unilaterally cause the transferee to return specific assets. 
D)  A creditor of the selling firm can access the receivables in the event of the seller's bankruptcy. 
A)  The assets transferred have been isolated from the selling firm. 
B)  The buying firm obtains the right to pledge or exchange the transferred assets,and no condition both constrains the transferee from taking advantage of its right and provides more than a trivial benefit to the transferor. 
C)  The selling firm does not maintain effective control over the assets transferred through (a)an agreement that both entitles and obligates it to repurchase the assets or (b)the
Ability to unilaterally cause the transferee to return specific assets. 
D)  A creditor of the selling firm can access the receivables in the event of the seller's bankruptcy.

Question 9

The acceptable method of accounting for stock options is the _________________________ method.

Accepted Answer

The answer of The acceptable method of accounting for stock...

Question 10

__________ means that a company will buy back those receivables that are not collected by the company they are factored to.

Accepted Answer

The answer of __________ means that a company will buy...

Question 11

Under which of the following conditions does the equipment lease qualify for capital lease accounting?

Accepted Answer

A)  The lease contains a bargain purchase option. 
B)  The lease term is equal to or greater than 75% of the asset's economic life. 
C)  A,and B are correct answers. 
D)  The lease transfers ownership to the lessee at the end of the lease term. 
A)  The lease contains a bargain purchase option. 
B)  The lease term is equal to or greater than 75% of the asset's economic life. 
C)  A,and B are correct answers. 
D)  The lease transfers ownership to the lessee at the end of the lease term.

Question 12

Derivative instruments acquired to hedge exposure to variability in expected future cash are _________________________ hedges.

Accepted Answer

The answer of Derivative instruments acquired to hedge exposure to...

Question 13

Under U.S.GAAP,which of the following items would require a lessee to classify a lease of equipment as a capital lease?

Accepted Answer

A)  There is no transfer of ownership to the lessee at the end of the lease term. 
B)  The lease does not contain a bargain purchase option. 
C)  The lease term is 90% of the estimated economic life of the lease property. 
D)  The present value of the contractual minimum lease payments is 75% of the fair value of the leased property. 
A)  There is no transfer of ownership to the lessee at the end of the lease term. 
B)  The lease does not contain a bargain purchase option. 
C)  The lease term is 90% of the estimated economic life of the lease property. 
D)  The present value of the contractual minimum lease payments is 75% of the fair value of the leased property.

Question 14

Which is the date when employees elect to exchange the option and cash for shares of common stock?

Accepted Answer

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

Question 15

Which of the following is the date on which a company incurs a legal liability to distribute the dividend to owners of the stock?

Accepted Answer

A)  date of record 
B)  commitment date 
C)  date of declaration 
D)  date of payment 
A)  date of record 
B)  commitment date 
C)  date of declaration 
D)  date of payment

Question 16

Assuming that Santa Corporation was required to capitalize its operating lease,how would the company's fixed asset ratio change under this assumption?

Accepted Answer

A)  increase 
B)  decrease 
C)  no effect 
D)  unable to determine 
A)  increase 
B)  decrease 
C)  no effect 
D)  unable to determine

Question 17

In some countries the account Reserve for Contingencies may be most comparable to which of the following accounts for a company reporting under U.S.GAAP?

Accepted Answer

A)  Contingency Expense 
B)  Retained Earnings Appropriated for Contingencies 
C)  Unearned Contingency Fees 
D)  Contingency Losses 
A)  Contingency Expense 
B)  Retained Earnings Appropriated for Contingencies 
C)  Unearned Contingency Fees 
D)  Contingency Losses

Question 18

Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging?

Accepted Answer

A)  Record as an asset or liability and recognize changes in fair value in other comprehensive income. 
B)  Do not record as an asset or liability;record income from the transaction at maturity and recognize in earnings. 
C)  Record as an asset or liability;recognize changes in fair value currently in earnings. 
D)  Record as an asset or liability if off-balance sheet risk is material. 
A)  Record as an asset or liability and recognize changes in fair value in other comprehensive income. 
B)  Do not record as an asset or liability;record income from the transaction at maturity and recognize in earnings. 
C)  Record as an asset or liability;recognize changes in fair value currently in earnings. 
D)  Record as an asset or liability if off-balance sheet risk is material.

Question 19

Which kind of dividend is a return of the original investment by shareholders?

Accepted Answer

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

Question 20

All of the following are primary events that typically lead to changes in book value of shareholders' equity except:

Accepted Answer

A)  Investments by shareholders,usually net cash received by the company at equity issue date. 
B)  Profitable operating and investing activities,with net income being a large component of this increase. 
C)  Debtholders requiring firms to enter into debt covenants. 
D)  Distributions to shareholders,usually in the form of periodic cash dividend payments
To investors and sometimes in the form of share repurchases. 
A)  Investments by shareholders,usually net cash received by the company at equity issue date. 
B)  Profitable operating and investing activities,with net income being a large component of this increase. 
C)  Debtholders requiring firms to enter into debt covenants. 
D)  Distributions to shareholders,usually in the form of periodic cash dividend payments
To investors and sometimes in the form of share repurchases.

According to U.S.GAAP,which of the following provides the most reliable measure for fair value measurement?

Porter Corporation On January 1,2012,Porter Corporation signed a five-year non-cancelable lease for certain machinery.The terms of the lease called for: -What accounting method should Porter use to account for the equipment lease?

Which of the following does not represent an acceptable method of transferring receivables to increase cash flow?

Which is the date when a firm gives a stock option to employees?

The _________________________ is the date a firm gives a stock option to employees.

FASB has set forth all of the following conditions for recognizing transfers of receivables as sales only if the following conditions of surrendering control of the receivables are met except:

The acceptable method of accounting for stock options is the _________________________ method.

__________ means that a company will buy back those receivables that are not collected by the company they are factored to.

Under which of the following conditions does the equipment lease qualify for capital lease accounting?

Derivative instruments acquired to hedge exposure to variability in expected future cash are _________________________ hedges.

Under U.S.GAAP,which of the following items would require a lessee to classify a lease of equipment as a capital lease?

Which is the date when employees elect to exchange the option and cash for shares of common stock?

Which of the following is the date on which a company incurs a legal liability to distribute the dividend to owners of the stock?

Assuming that Santa Corporation was required to capitalize its operating lease,how would the company's fixed asset ratio change under this assumption?

In some countries the account Reserve for Contingencies may be most comparable to which of the following accounts for a company reporting under U.S.GAAP?

Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging?

Which kind of dividend is a return of the original investment by shareholders?

All of the following are primary events that typically lead to changes in book value of shareholders' equity except:

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

Exam 7: Financing Activities

According to U.S.GAAP,which of the following provides the most reliable measure for fair value measurement?

Porter Corporation On January 1,2012,Porter Corporation signed a five-year non-cancelable lease for certain machinery.The terms of the lease called for: -What accounting method should Porter use to account for the equipment lease?

Which of the following does not represent an acceptable method of transferring receivables to increase cash flow?

Which is the date when a firm gives a stock option to employees?

The _________________________ is the date a firm gives a stock option to employees.

FASB has set forth all of the following conditions for recognizing transfers of receivables as sales only if the following conditions of surrendering control of the receivables are met except:

The acceptable method of accounting for stock options is the _________________________ method.

__________ means that a company will buy back those receivables that are not collected by the company they are factored to.

Under which of the following conditions does the equipment lease qualify for capital lease accounting?

Derivative instruments acquired to hedge exposure to variability in expected future cash are _________________________ hedges.

Under U.S.GAAP,which of the following items would require a lessee to classify a lease of equipment as a capital lease?

Which is the date when employees elect to exchange the option and cash for shares of common stock?

Which of the following is the date on which a company incurs a legal liability to distribute the dividend to owners of the stock?

Assuming that Santa Corporation was required to capitalize its operating lease,how would the company's fixed asset ratio change under this assumption?

In some countries the account Reserve for Contingencies may be most comparable to which of the following accounts for a company reporting under U.S.GAAP?

Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging?

Which kind of dividend is a return of the original investment by shareholders?

All of the following are primary events that typically lead to changes in book value of shareholders' equity except:

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