ACCT 304 WEEK 8 Final Exam

ACCT 304 WEEK 8 Final Exam
1. (TCO 1) CPAs are licensed by: (Points : 6) 


2. (TCO 1) When a registrant company submits its annual filing to the SEC, it uses: (Points : 6) 

3. (TCO 2) The conceptual framework's qualitative characteristic of relevance includes: (Points : 6) 
 
4. (TCO 2) Net income equals: (Points : 6) 
 

5. (TCO 3) Incurring an expense for advertising on an account would be recorded by: (Points : 6) 
 

6. (TCO 3) Accruals occur when cash flows: (Points : 6) 
 

7. (TCO 4) An asset that is not expected to be converted to cash or consumed within one year or the operating cycle is: (Points : 6) 
 

8. (TCO 4) Which of the following is never a current liability account? (Points : 6) 


9. (TCO 5) The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its strategic focus, the company sold the automobile parts division. The division qualifies as a component of the entity according to GAAP regarding disposal of long-lived assets. How should Claxton report the sale in its 2011 income statement? (Points : 6) 
 


10. (TCO 5) On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2011. The following additional facts pertain to the transaction: 
The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations.
The book value of Footwear's assets totaled $48 million on the date of the sale.
Footwear's operating income was a pre-tax loss of $10 million in 2011.
Foxtrot's income tax rate is 40%.
In the 2011 income statement for Foxtrot Co., it would report:
(Points : 6) 


11. (TCO 5) The statement of cash flows reports cash flows from the activities of: (Points : 6) 
 

12. (TCO 5) Cash flows from financing activities include: (Points : 6) 
 

13. (TCO 5) Under the realization principle, revenue should not be recognized until the earnings process is deemed virtually complete and: (Points : 6) 
 

14. (TCO 5) Todd Sweeney is an artist who sells his work under consignment (he displays his work in local barbershops, and customers buy the work there). Sweeney recently transferred a painting to a local barbershop. The rationale for adoption of the percentage-of-completion method is that: (Points : 6) 
 

15. (TCO 6) A series of equal periodic payments in which the first payment is made one compounding period after the date of the contract is: (Points : 6) 
 

16. (TCO 6) Yamaha Inc. hires a new chief financial officer and promises to pay him a lump-sum bonus four years after he joins the company. The new CFO insists that the company invest an amount of money at the beginning of each year in a 7% fixed rate investment fund to insure the bonus will be available. To determine the amount that must be invested each year, a computation must be made using the formula for: (Points : 6) 


17. (TCO 7) Cash equivalents do not include: (Points : 6) 


18. (TCO 7) Oswego Clay Pipe Company sold $46,000 of pipe to Southeast Water District #45 on April 12 of the current year with terms 1/15, n/60. Oswego uses the gross method of accounting for cash discounts. What entry would Oswego make on June 10, assuming the customer made the correct payment on that date? 
 cash 46000
Accounts receivable 46,000
(Points : 6) 
 

19. (TCO 8) In a periodic inventory system, the cost of purchases is debited to: (Points : 6) 



20. (TCO 8) During periods when costs are rising and inventory quantities are stable, ending inventory will be: (Points : 6) 
 

21. (TCO 8) When using the gross profit method to estimate ending inventory, it is not necessary to know: (Points : 6) 


22. (TCO 8) In calculating the cost-to-retail percentage for the retail method, the retail column will not include: (Points : 6) 
 

1. (TCO 8) Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):




2. (TCO 5) What is an accrued liability? Please provide two examples. (Points : 28) 

 


3. (TCO 7) Briefly compare and contrast the two allowance approaches to estimating bad debt expense. In your answer, indicate which approach, if either, is superior. (Points : 25) 

 




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1. (TCO 8) It is the end of the accounting period, and your boss asks you to help determine the inventory balance to place in the company's balance sheet. Explain which physical quantities of inventory you will include, and which you will exclude. (Points : 25) 

 


2. (TCO 4) You are the independent accountant assigned to the audit of Neophyte Company. The company's accountant, a graduate of Rival State University, has prepared financial statements that contained the following questionable items: