Advanced Accounting Exam
Questions
Course Introduction
Advanced Accounting delves into complex financial accounting topics beyond the fundamentals, focusing on areas such as business combinations and consolidated financial statements, partnership accounting, foreign currency transactions, and accounting for governmental and non-profit organizations. The course emphasizes the application of advanced accounting standards, analytical techniques, and ethical considerations to prepare students for real-world financial challenges. Students will gain a deeper understanding of international accounting issues, intercompany transactions, and equity method investments, equipping them with the critical thinking and technical expertise needed for advanced roles in accounting and finance.
Recommended Textbook
Advanced Accounting International 11th edition by Floyd A. Beams
Available Study Resources on Quizplus
23 Chapters
888 Verified Questions
888 Flashcards
Source URL: https://quizplus.com/study-set/3340
Page 2
Chapter 1: Business Combinations
Available Study Resources on Quizplus for this Chatper
36 Verified Questions
36 Flashcards
Source URL: https://quizplus.com/quiz/66376
Sample Questions
Q1) Durer Inc.acquired Sea Corporation in a business combination and Sea Corp went out of existence.Sea Corp developed a patent listed as an asset on Sea Corp's books at the patent office filing cost.In recording the combination,
A)fair value is not assigned to the patent because the research and development costs have been expensed by Sea Corp.
B)Sea Corp's prior expenses to develop the patent are recorded as an asset by Durer at purchase.
C)the patent is recorded as an asset at fair market value.
D)the patent's market value increases goodwill.
Answer: C
Q2) According to FASB Statement No.141,liabilities assumed in an acquisition will be valued at the ________.
A)estimated fair value
B)historical book value
C)current replacement cost
D)present value using market interest rates
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Stock Investments Investor Accounting and Reporting
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/66375
Sample Questions
Q1) Assume that Pansy Incorporated used the cost method of accounting for its investment in Sunflower.The balance in the Investment in Sunflower account at December 31,2013 was
A)$76,700.
B)$80,000.
C)$83,300.
D)$95,000.
Answer: B
Q2) What method of accounting will generally be used when one company purchases between 20% to 50% of the outstanding stock of another company?
A)Only the fair value method may be used.
B)Only the equity method may be used.
C)Either the fair value method or the equity method may be used,depending upon the relationship between the companies.
D)Neither the fair value method nor the equity method may be used,regardless of the level of ownership.
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: An Introduction to Consolidated Financial Statements
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/66374
Sample Questions
Q1) Pomograte Corporation bought 75% of Sycamore Company's common stock,with a book value of $900,000,on January 2,2011 for $750,000.The law firm of Dewey,Cheatam and Howe was paid $55,000 to facilitate the purchase.At what amount should Pomograte's Investment in Sycamore account be reported on January 2,2011?
A)$675,000
B)$695,000
C)$750,000
D)$845,000
Answer: C
Q2) What method must be used if FASB Statement No.94 prohibits full consolidation of a 70% owned subsidiary?
A)The cost method
B)The Liquidation value
C)Market value
D)Equity method
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Consolidated Techniques and Procedures
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/66373
Sample
Questions
Q1) A parent corporation owns 55% of the outstanding voting common stock of one domestic subsidiary.The parent has control over the subsidiary.Which of the following statements is correct?
A)The parent corporation must prepare consolidated financial statements for the economic entity.
B)The parent corporation must use the fair value method.
C)The parent company may use the equity method but the subsidiary cannot be consolidated.
D)The parent company can use the equity method or the fair value/cost method.
Q2) What is the amount of total assets?
A)$1,380,000
B)$1,402,000
C)$1,470,000
D)$1,875,000
Q3) Which of the following will be debited to the Investment account when the equity method is used?
A)Investee net losses
B)Investee net profits
C)Investee declaration of dividends
D)Depreciation of excess purchase cost attributable to investee equipment
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Intercompany Profit Transactions - Inventories
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/66372
Sample Questions
Q1) Pirate Transport bought 80% of the outstanding voting stock of Seaways Shipping at book value several years ago.(At the time of purchase,the fair value and book value of Seaways' net assets were equal. )Pirate sells merchandise to Seaways at 120% above Pirate's cost.Intercompany sales from Pirate to Seaways for 2012 were $450,000.Unrealized profits in Seaways' December 31,2011 inventory and December 31,2012 inventory were $17,000 and $15,000,respectively.Seaways reported net income of $750,000 for 2012.
Required:
1.Determine Pirate's income from Seaways for 2012.
2.In General Journal format,prepare consolidation working paper entries at December 31,2012 to eliminate the effects of the intercompany inventory sales assuming the perpetual inventory method is used.
Q2) Assume there are routine inventory sales between parent companies and subsidiaries.When preparing the consolidated financial statements,which of the following line items is indifferent to the sales being either upstream or downstream?
A)Consolidated retained earnings
B)Consolidated gross profit
C)Noncontrolling interest share
D)Controlling interest share of consolidated net income
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Intercompany Profit Transactions - Plant Assets
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/66371
Sample Questions
Q1) Porter Corporation acquired 70% of the outstanding voting common stock of Sherman Inc.in 2004.On January 1,2005,Sherman Inc.purchased a depreciable machine for $120,000 cash with an estimated useful life of 10 years that was depreciated on a straight-line basis.The machine has no estimated salvage value.Sherman used the machine until the end of 2007.On January 2,2008,Sherman sold the machine to Porter who continued to use the same estimated life (seven years remaining),salvage value and depreciation method that was used by Sherman.At the end of 2008,Sherman reported a gain on sale of the machine of $14,000.
Required:
Answer the following questions concerning Porter and Sherman.
1.Prepare elimination/adjusting entries for the consolidated working papers for the year ended December 31,2008.
2.How much depreciation expense relating to the transferred asset did Porter record in 2008 on the company's separate books?
3.How much depreciation expense relating to the transferred asset was reported on the consolidated income statement in 2008?
4.What amounts were reported for the Machine and the Accumulated Depreciation in the consolidated balance sheet on December 31,2008?
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Intercompany Profit Transactions - Bonds
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/66370
Sample Questions
Q1) No constructive gain or loss arises from the purchase of an affiliate's bonds if the A)affiliate is a 100%-owned subsidiary.
B)bonds are purchased at book value.
C)bonds are purchased with arm's-length bargaining from outside entities.
D)gain or loss cannot be reasonably estimated.
Q2) With respect to the bond purchase,the consolidated income statement of Pfadt Corporation and Subsidiary for 2011 showed a gain or loss of A)$ 4,500.
B)$ 5,000.
C)$10,800.
D)$12,000.
Q3) Bonds Payable appeared in the December 31,2011 consolidated balance sheet of Pfadt Corporation and Subsidiary in the amount of A)$398,925.
B)$441,000.
C)$443,250.
D)$450,000.
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Consolidations - Changes in Ownership
Interests
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/66369
Sample Questions
Q1) Utah Company holds 80% of the stock of a subsidiary company.The subsidiary issues 100 additional shares of stock to Utah Company at a price above book value per share.The subsidiary does not issue any additional shares at the same time.How will Utah Company record the purchase?
A)Utah Company records a gain on sale of stock.
B)Utah Company increases additional paid-in capital.
C)Utah Company decreases additional paid-in capital.
D)Utah Company assigns any excess cost over book value acquired to increase undervalued identifiable assets or goodwill as appropriate.
Q2) If SOS sold the additional shares directly to Great,Great's Investment in SOS account after the sale would be
A)$1,350,000.
B)$1,395,000.
C)$1,425,000.
D)$1,500,000.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Indirect and Mutual Holdings
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/66368
Sample Questions
Q1) The amount of income for the current year assigned to the noncontrolling shareholders of Abussi Corporation is
A)$48,000.
B)$53,200.
C)$74,000.
D)$79,200.
Q2) Page Corporation acquired a 60% interest in Ace Corporation at a price $40,000 in excess of book value and fair value on January 1,2010.On the same date,Ace acquired a 70% interest in Bader Corporation at a price $30,000 in excess of book value and fair value.The excess purchase cost paid by Page and Ace was attributed to goodwill.Separate net incomes (excluding investment income)for the three affiliates for 2010 are as follows: Page,$500,000,Ace,$300,000,and Bader,$400,000. Page's controlling interest share of consolidated net income for 2010 is
A)$808,000.
B)$848,000.
C)$920,000.
D)$960,000.
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Subsidiary Preferred Stock, consolidated
Earnings Per Share, and Consolidated Income Taxation
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/66367
Sample Questions
Q1) Parker Corporation owns an 80% interest in Sample Corporation's common stock.Throughout 2010,Sample had 10,000 shares of common stock outstanding and Parker had 100,000 shares of common stock outstanding.Sample's only dilutive security consists of $50,000 face amount of 8% bonds payable.Each $1,000 bond is convertible into 20 shares of Sample stock.Parker and Sample's separate incomes for the year are $100,000 and $75,000,respectively.Assume a 34% flat income tax rate.
Required:
Compute the amount of basic and diluted earnings per share for Parker (Consolidated)and Sample Corporations.
Q2) What is the goodwill on the consolidated balance sheet for Pamplin and Subsidiaries on December 31,2011 based on Pamplin's purchase of Sage's common stock?
A)$140,000
B)$240,000
C)$290,000
D)$306,667
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/66366
Sample Questions
Q1) Noncontrolling interest share is viewed as an expense under ________ theory.
A)parent company
B)entity
C)contemporary
D)joint venture
Q2) Entities other than the primary beneficiary account for their investment in a variable interest entity using the A)cost method.
B)equity method.
C)cost or equity methods.
D)consolidated method.
Q3) Under the entity theory,a consolidated balance sheet prepared immediately after the business combination will show goodwill of
A)$15,000.
B)$22,500.
C)$25,000.
D)$32,500.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Derivatives and Foreign Currency: Concepts and Common Transactions
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/66365
Sample Questions
Q1) Which of the following is a true statement regarding the recording of a transaction which involves foreign currency?
A)A transaction is always settled in the currency in which it is denominated.
B)A transaction is always measured in the currency in which it is denominated.
C)A transaction is always settled in the currency in which it is measured.
D)A transaction is always recorded in the currency in which it is denominated.
Q2) What exchange gain or loss appeared on Sooty's 2011 income statement?
A)a loss of $15,000
B)a loss of $5,000
C)a gain of $15,000
D)a gain of $5,000
Q3) If a U.S.company is preparing a journal entry for a recent purchase,foreign-currency-denominated purchases must be measured in ________ at the purchase date using the foreign currency ________ rate on the purchase date.
A)foreign currency;spot
B)foreign currency;future
C)U)S.dollars;forward
D)U)S.dollars;spot
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Accounting for Derivatives and Hedging Activities
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/66364
Sample Questions
Q1) Which of the following is not an approach appropriate for hedge accounting?
A)Cash Flow Hedge Accounting
B)Critical Term Hedge Accounting
C)Fair Value Hedge Accounting
D)Hedge of Net Investment in Foreign Subsidiary
Q2) On January 1,2011,Bosna borrowed $100,000 from Lenda.The three-year term note carries a variable rate interest,based on LIBOR,and interest is payable at December 31 of each year,compounded annually.The first year's rate of interest is 7% and Bosna would like to assure that their rate does not increase.Bosna enters into a pay-fixed,receive-variable interest rate swap agreement with Swamp City Bank,under which Bosna will pay 7%,fixed.At December 31,2011,it is determined that Bosna's interest rate to Lenda for 2012 will be 6%.At December 31,2012,the interest rate for 2013 was determined to be 8%.Treat as a cash flow hedge.
Required:
Determine the estimated fair value of the hedge at December 31,2011,and prepare the related journal entries required to document this hedge and the related interest payments at December 31,2011,2012,and 2013,including final repayment on 12/31/13.Assume a flat interest rate curve.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Foreign Currency Financial Statements
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/66363
Sample Questions
Q1) Assume the functional currency of a foreign entity is the U.S.dollar,but the books are kept in euros.The objective of remeasurement of a foreign entity's accounts is to
A)produce the same results as if the foreign entity's books were maintained in the currency of the largest customer.
B)produce the same results as if the foreign entity's books were maintained solely in the local currency.
C)produce the same results as if the foreign entity's books were maintained solely in the U.S.dollar.
D)produce the results reflective of the foreign entity's economics in the local currency.
Q2) Selvey Inc.is a wholly-owned subsidiary of Parsfield Incorporated,a U.S.firm.The country where Selvey operates is determined to have a highly inflationary economy according to GAAP definitions.Therefore,for purposes of preparing consolidated financial statements,the functional currency is
A)its reporting currency.
B)its current rate method currency.
C)the US dollar.
D)its local currency.
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Segment and Interim Financial Reporting
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/66362
Sample Questions
Q1) How does GAAP view interim accounting periods?
A)As discrete units for which net income may be separately determined
B)As integral units of the entire year for which each interim period is an essential part of an annual period
C)As integral units of the entire year with each interim period as an independent accounting period
D)As discrete units of the entire year using the same principles that are applied to the annual period
Q2) Jacana Company uses the LIFO inventory method.During the second quarter,Jacana experienced a 100-unit liquidation in its LIFO inventory at a LIFO cost of $430 per unit.Jacana considered the liquidation temporary and expects to replace the units in the third quarter at an estimated replacement cost of $460 a unit.The cost of goods sold computation in the interim report for the second quarter will
A)include the 100 liquidated units at the $460 estimated replacement unit cost.
B)include the 100 liquidated units at the $430 LIFO unit cost.
C)be understated by $3,000.
D)be overstated by $3,000.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Partnerships - Formation,operations,and
Changes in Ownership Interests
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/66361
Sample Questions
Q1) What partnership capital will Robert have after Quincy retires?
A)$200,000
B)$280,000
C)$360,000
D)$440,000
Q2) Which of the following is a reason to use a partnership as the legal form of a business?
A)Partnerships avoid the issue of mutual agency.
B)Partnerships avoid the issue of unlimited liability.
C)Partnerships avoid the issue of double-taxation faced by corporations.
D)Partnerships avoid the difficulty of raising capital.
Q3) If the partnership agreement provides a formula for the computation of a bonus to the partners,the bonus would be computed
A)next to last,because the final allocation is the distribution of the profit residual.
B)before income tax allocations are made.
C)after the salary and interest allocations are made.
D)in any manner agreed to by the partners in the partnership agreement.
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Partnership Liquidation
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/66360
Sample Questions
Q1) Using a safe payments schedule,how much cash should Melvin receive in the first distribution?
A)$ 81,000
B)$165,000
C)$168,600
D)$202,500
Q2) Creditors of the partnership may seek the personal assets of the partners to satisfy amounts owed.When this happens
A)creditors may only file against partnership assets.
B)creditors must file against all partners and recover their claims based on the individual partner's profit and loss distribution percentage.
C)creditors must file against all partners and recover their claims based on the individual partner's percentage ownership.
D)creditors may file against an individual partner to recover their claims,or against any combination of partners.
To view all questions and flashcards with answers, click on the resource link above.
19
Chapter 18: Corporate Liquidations and Reorganizations
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/66359
Sample Questions
Q1) In a Chapter 7 bankruptcy case,what is the first-to-last ranking order of priority for payment? (Use the following list of claim types. ) I.stockholder claims
II)unsecured priority claims
III)secured claims
IV)unsecured nonpriority claims
A)I,II,IV,and III
B)III,II,IV,and I
C)III,I,IV,and II
D)II,IV,III,and I
Q2) An entity which qualified for fresh-start accounting is not required to disclose which of the following items in their initial financial statements?
A)Adjustments from historical cost of assets and liabilities
B)Amount of debt of the prior entity forgiven
C)Amount of ending retained earnings/deficit of the prior entity
D)Changes to the management team from the prior entity
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: An Introduction to Accounting for State and Local Governmental Units
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/66358
Sample Questions
Q1) The accounting equation for an agency fund is
A)Current assets - Current liabilities = Fund Balance.
B)Assets - Liabilities = Equity.
C)Assets = Equity + Liabilities.
D)Assets = Liabilities.
Q2) The following are transactions for the city of Franklin.
a.Borrowed $20,000 by issuing a two-year note.
b.Purchased equipment for $6,000 cash.
c.Licenses for $700 were billed on account.
d.Accrued employee salary costs of $7,000.
e.Depreciation expense on equipment for year,$1,000.
Required:
Analyze the above transactions by using the accounting equation for a proprietary fund.
Q3) Which type of fund is used to account for a government activity that sells goods or services either solely or almost solely to external customers?
A)A temporary fund
B)A general fund
C)An agency fund
D)An enterprise fund
Page 21
To view all questions and flashcards with answers, click on the resource link above.
Chapter 20: Accounting for State and Local Governmental Units
- Governmental Funds
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/66357
Sample Questions
Q1) The General Fund transfers $50,000 cash to the Debt Service Fund to meet annual interest payments.What entry did the Debt Service Fund prepare?
A)Debit Cash $50,000,Credit Revenue $50,000
B)Debit Cash $50,000,Credit Other Financing Sources-Transfer from General Fund $50,000
C)Debit Encumbrance $50,000,Credit Due to General Fund $50,000
D)Debit Appropriation $50,000,Credit Reserve for Encumbrance $50,000
Q2) What statements are required for Government-wide financial statements?
A)Statement of Cash Flows and Balance Sheet
B)Statement of Cash Flows and Statement of Net Assets
C)Statement of Net Assets and Statement of Activities
D)Operating Statement and Balance Sheet
Q3) When a capital lease is used to lease fixed assets for the general government,the governmental fund acquiring the fixed assets debits ________ at the ________.
A)expenditures;future value of the minimum lease payments
B)fixed assets;future value of the minimum lease payments
C)expenditures,present value of the minimum lease payments
D)fixed assets;present value of the minimum lease payments
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Accounting
for State and Local Governmental Units - Proprietary and Fiduciary Funds
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/66356
Sample Questions
Q1) Proprietary funds are required to prepare financial statements that include:
a)Statement of Activities
b)Statement of Revenues,Expenditures and Changes in Fund Balance
c)Balance Sheet
d)Statement of Cash Flows
e)Statement of Net Assets
f)Statement of Revenues,Expenses and Changes in Net Assets
A)C,D,F
B)A,B,D
C)B,C,D
D)D,E,F
Q2) What is a significant difference for agency funds when compared to governmental funds?
A)An agency fund has a separate ledger.
B)An agency fund does not report revenues.
C)Agency funds are not associated with any governmental unit.
D)An agency fund will not balance because there is no fund balance account.
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Accounting for Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/66355
Sample Questions
Q1) Which of the following is not true?
A)A not-for-profit entity operates for purposes other than to provide goods or services at a profit.
B)A not-for-profit entity may be governmental or non-governmental.
C)A not-for-profit entity may possess ownership interests like a corporation.
D)A not-for-profit entity receives resources from resource providers who do not expect commensurate or proportionate pecuniary return.
Q2) Voluntary health and welfare organizations must report expenses classified by A)restriction.
B)function and natural classification.
C)restriction and natural classification.
D)restriction,function and natural classification.
Q3) The gift shop of a nonprofit,private hospital has cash revenue of $24,000.What account will the hospital credit?
A)Unrestricted support
B)Unrestricted revenue
C)Temporarily restricted revenue
D)Other operating revenue - unrestricted
To view all questions and flashcards with answers, click on the resource link above.
Chapter 23: Estates and Trusts
Available Study Resources on Quizplus for this Chatper
38 Verified Questions
38 Flashcards
Source URL: https://quizplus.com/quiz/66354
Sample Questions
Q1) What is the dollar amount of the federal lifetime maximum gift tax exclusion?
A)$24,000
B)$600,000
C)$1,000,000
D)$2,000,000
Q2) Which of the following phrases is frequently used to refer to estate or trust accounting?
A)Non-profit accounting
B)Testamentary accounting
C)Fiduciary accounting
D)All of the above phrases are used to refer to estate or trust accounting.
Q3) Under the Uniform Probate Code,the personal representative must inform the heirs and devisees of his or her appointment and provide other selected information within how many days of the appointment?
A)10 days
B)20 days
C)30 days
D)60 days
To view all questions and flashcards with answers, click on the resource link above.
25