Professional Accounting Practices
Exam Questions
Course Introduction
Professional Accounting Practices explores the fundamental principles, standards, and regulations governing the accounting profession. The course covers topics such as financial reporting, auditing, ethical conduct, internal controls, and the preparation and analysis of financial statements. Students will gain proficiency in applying accounting frameworks, understanding regulatory requirements, and implementing best practices in both public and private sector contexts. Through case studies and practical exercises, learners will develop the skills needed to address real-world accounting challenges and uphold the integrity and transparency of financial information in professional settings.
Recommended Textbook
Advanced Accounting 13th Edition By
Joe Ben Hoyle
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38 Chapters
3570 Verified Questions
3570 Flashcards
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Page 2
Chapter 1: The Equity Method of Accounting for Investments
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Sample Questions
Q1) In a situation where the investor exercises significant influence over the investee, which of the following entries is not actually posted to the books of the investor? (I) Debit to the Investment account, and a Credit to the Equity in Investee Income account.
(II. Debit to Cash (for dividends received from the investee), and a Credit to Investment Income account .
(III) Debit to Cash (for dividends received from the investee), and a Credit to the Dividend Receivable.
A) Entries I and II.
B) Entries II and III.
C) Entry I only.
D) Entry II only.
E) Entry III only.
Answer: D
Q2) What amount of gross profit on 2018 intra-entity sales should Steven defer at December 31, 2018?
Answer: [($75,000 - $54,000) × .10 × .40] = $840
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Chapter 1: A: the Equity Method of Accounting for Investments
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Sample Questions
Q1) A company has been using the equity method to account for its investment.The company sells shares and does not continue to have significant influence.Which of the following statements is true?
A) A cumulative effect change in accounting principle must occur.
B) A prospective change in accounting principle must occur.
C) A retrospective change in accounting principle must occur.
D) The investor will not receive future dividends from the investee.
E) Future dividends will continue to reduce the investment account.
Answer: B
Q2) What argument could be made against the equity method?
Answer: An argument could be made against the recognition of income under the equity method. The investor is required to recognize its share of the investee's income even when it is unlikely that the investor will ever receive the entire amount in cash dividends.
Q3) When should an investor not use the equity method for an investment of 21% in another corporation?
Answer: When the investor does not have significant influence with regard to the investee.
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Chapter 2: Consolidation of Financial Information
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Sample Questions
Q1) What amount will be reported for consolidated receivables?
A) $660,000.
B) $640,000.
C) $500,000.
D) $460,000.
E) $480,000.
Answer: B
Q2) What is the primary difference between recording an acquisition when the subsidiary is dissolved and when separate incorporation is maintained?
Answer: When the subsidiary is dissolved, the acquirer records in its books the fair value of individual assets and liabilities acquired as well as the resulting goodwill from the acquisition. However, when separate incorporation is maintained, the acquirer only records the total fair value of consideration transferred as an investment.
Q3) Determine consolidated Additional Paid-In Capital at December 31, 2017.
Answer: 11ea7e46_dc58_8273_ab1f_0db4c8e615df_TB2563_00
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5
Chapter 2: A: Consolidation of Financial Information
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Q1) What is the primary difference between: (i) accounting for a business combination when the subsidiary is dissolved; and (ii) accounting for a business combination when the subsidiary retains its incorporation?
A) If the subsidiary is dissolved, it will not be operated as a separate division.
B) If the subsidiary is dissolved, assets and liabilities are consolidated at their book values.
C) If the subsidiary retains its incorporation, there will be no goodwill associated with the acquisition.
D) If the subsidiary retains its incorporation, assets and liabilities are consolidated at their book values.
E) If the subsidiary retains its incorporation, the consolidation is not formally recorded in the accounting records of the acquiring company.
Q2) What is the difference in consolidated results between a business combination whereby the acquired company is dissolved, and a business combination whereby separate incorporation is maintained?
Q3) Determine the balance for Goodwill that would be included in a December 1, 2017, consolidation.
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Chapter 3: Consolidations - Subsequent to the Date of Acquisition
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Q1) Which of the following internal record-keeping methods can a parent choose to account for a subsidiary acquired in a business combination?
A) Initial value or book value.
B) Initial value, lower-of-cost-or-market-value, or equity.
C) Initial value, equity, or partial equity.
D) Initial value, equity, or book value.
E) Initial value, lower-of-cost-or-market-value, or partial equity.
Q2) Assume the equity method is applied.How much equity income will Kaye report on its internal accounting records as a result of Fiore's operations?
A) $400
B) $300
C) $380
D) $280
E) $480
Q3) For recognized intangible assets that are considered to possess indefinite lives, what is the accounting treatment for purposes of income recognition?
Q4) Determine the amortization expense related to the combination at the year-end date of 12/31/16.
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Chapter 3: A: Consolidations - Subsequent to the Date of Acquisition
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Q1) One company acquires another company in a combination accounted for under the acquisition method.The acquiring company decides to apply the equity method in accounting for the combination.What is one reason the acquiring company might have made this decision?
A) It is the only method allowed by the SEC.
B) It is relatively easy to apply.
C) It is the only internal reporting method allowed by generally accepted accounting principles.
D) Operating results on the parent's financial records reflect consolidated totals.
E) When the equity method is used, no worksheet entries are required in the consolidation process.
Q2) If Utah paid $300,000 in cash for Trimmer, what allocation and amortization should have been assigned to the subsidiary's Building account and its Equipment account in a December 31, 2018 consolidation?
Q3) What is the partial equity method? How does it differ from the equity method? What are its advantages and disadvantages compared to the equity method?
Q4) What was the total for consolidated patents as of December 31, 2018?
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Chapter 4: Consolidated Financial Statements and Outside Ownership
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Sample Questions
Q1) Compute the noncontrolling interest in the net income of Demers at December 31, 2019.
A) $12,000.
B) $10,600.
C) $18,600.
D) $20,000.
E) $14,400.
Q2) Determine the amount of goodwill to be recognized in this acquisition.
Q3) For business combinations involving less than 100 percent ownership, the acquirer recognizes and measures all of the following at the acquisition date except:
A) Identifiable assets acquired, at fair value.
B) Liabilities assumed, at book value.
C) Non-controlling interest, at fair value.
D) Goodwill, or a gain from bargain purchase.
E) None of these choices is correct.
Q4) Prevatt, Inc.owns 80% of Franklin Company.During the current year, a portion of the investment in Franklin is sold.Prior to recording the sale, Prevatt adjusts the carrying value of its investment.What is the purpose of the adjustment?
Q5) What is the noncontrolling interest balance as of December 31, 2020?
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Chapter 4: A: Consolidated Financial Statements and Outside Ownership
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Q1) What amount of consolidated net income for 2019 should be allocated to Femur's controlling interest in Harbor?
A) $ 582,000
B) $1,050,000
C) $1,358,000
D) $1,808,000
E) $2,140,000
Q2) Compute the noncontrolling interest in Demers at December 31, 2021.
A) $107,800.
B) $140,000.
C) $ 80,000.
D) $160,800.
E) $146,800.
Q3) How much does Pell record as Income from Demers for the year ended December 31, 2019?
A) $80,000.
B) $74,400.
C) $73,000.
D) $42,400.
E) $41,000.
Page 10
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Chapter 5: Consolidated Financial Statements Intra-Entity
Asset Transactions
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Q1) In the consolidation worksheet for 2018, which of the following accounts would be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?
A) Retained earnings.
B) Cost of goods sold.
C) Inventory.
D) Investment in Fisher Company.
E) Sales.
Q2) Assuming there are no excess amortizations or other intra-entity transactions, compute income from Stark reported on Parker's books for 2017.
A) $205,000.
B) $200,000.
C) $180,000.
D) $175,500.
E) $184,500.
Q3) Prepare a schedule of consolidated net income and the share to controlling and noncontrolling interests for 2018, assuming that Musial owned only 90% of Matin and the equipment transfer had been upstream
Q4) What is consolidated net income for 2018?
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Chapter 5: A: Consolidated Financial Statements
Intra-Entity Asset Transactions
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Sample Questions
Q1) Gentry Inc.acquired 100% of Gaspard Farms on January 5, 2017.During 2017, Gentry sold Gaspard Farms $625,000 of goods, which had cost $425,000.Gaspard Farms still owned 12% of the goods at the end of the year.In 2018, Gentry sold goods with a cost of $800,000 to Gaspard Farms for $1,000,000, and Gaspard Farms still owned 10% of the goods at year-end.For 2018, the cost of goods sold totaled $5,400,000 for Gentry, and $1,200,000 for Gaspard Farms.What was consolidated cost of goods sold for 2018?
A) $6,600,000.
B) $6,604,000.
C) $5,620,000.
D) $5,596,000.
E) $5,625,000.
Q2) Compute the gain or loss on the intra-entity transfer of land that should be reported on the books of Stiller prior to consolidation.
A) $15,000 loss.
B) $15,000 gain.
C) $50,000 loss.
D) $50,000 gain.
E) $65,000 gain.
Q3) How is the gain on an intra-entity transfer of a depreciable asset recognized?
Page 12
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Chapter 6: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash
Flows, and Other Issues
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Sample Questions
Q1) After acquiring the additional shares, what adjustment is needed for Webb's investment in Jones account?
A) $270,000 increase.
B) $270,000 decrease.
C) $ 30,000 increase.
D) $ 30,000 decrease.
E) No adjustment is necessary.
Q2) Cadion Co.owned a controlling interest in Knieval Inc.Cadion reported sales of $420,000 during 2018 while Knieval reported $280,000.Inventory costing $28,000 was transferred from Knieval to Cadion (upstream) during the year for $56,000.Of this amount, twenty-five percent was still in ending inventory at year's end.Total receivables on the consolidated balance sheet were $112,000 at the first of the year and $154,000 at year-end.No intra-entity debt existed at the beginning or ending of the year.Using the direct approach, what is the consolidated amount of cash collected by the business from its customers?
A) $602,000.
B) $644,000.
C) $686,000.
D) $714,000.
E) $592,000.
Page 13
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Chapter 6: A: Variable Interest Entities, Intra-Entity Debt,
Consolidated Cash Flows, and Other Issues
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Sample Questions
Q1) Parker owned all of Odom Inc.Although the Investment in Odom Inc.account had a balance of $834,000, the subsidiary's 12,000 shares had an underlying book value of only $56 per share.On January 1, 2018, Odom issued 3,000 new shares to the public for $70 per share.How does this transaction affect the Investment in Odom Inc.account?
A) It should be decreased by $210,000.
B) It should be increased by $210,000.
C) It should be increased by $168,000.
D) It should be decreased by $1,200.
E) It is not affected since the shares were sold to outside parties.
Q2) A subsidiary issues new shares of common stock.If the parent acquires all of these shares at an amount greater than book value, which of the following statements is true?
A) The investment in subsidiary will decrease.
B) Additional paid-in capital will decrease.
C) Retained earnings will increase.
D) The investment in subsidiary will increase.
E) No adjustment will be necessary.
Q3) What was Kuried's balance in the Investment in Thomas Inc.account as of December 31, 2018?
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Chapter 7: Consolidated Financial Statements - Ownership
Patterns and Income Taxes
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Sample Questions
Q1) Compute Chase's accrual-based net income for 2018.
A) $746,000.
B) $719,000.
C) $779,600.
D) $774,200.
E) $758,100.
Q2) Compute the income tax liability of Cody for 2018.
A) $33,000.
B) $34,500.
C) $37,500.
D) $30,000.
E) $22,500.
Q3) Required:
Determine the total amount of goodwill for the January 1, 2017 acquisition of Curle Co.and for the acquisition of Lance Co.on the same date.
Q4) What ownership structure is referred to as a connecting affiliation? Describe briefly or illustrate with a diagram.
Q5) Required:
Prepare a schedule to show consolidated net income.
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Chapter 7: A: Consolidated Financial Statements -
Ownership Patterns and Income Taxes
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Sample Questions
Q1) What is Delta's accrual-based net income for 2018?
A) $1,091,520.
B) $1,115,520.
C) $1,168,000.
D) $1,168,520.
E) $1,200,000.
Q2) In a father-son-grandson combination, which of the following statements is true?
A) Companies that are solely in subsidiary positions must have their accrual-based net income computed first in the consolidation process.
B) Father-son-grandson configurations never require consolidation unless one company owns 100% of at least one other member of the combined group.
C) The order of the computation of accrual-based net income is not important in the consolidation process.
D) The parent must have its accrual-based net income computed first in the consolidation process.
E) None of these answer choices are correct.
Q3) What ownership structure is referred to as a connecting affiliation? Describe briefly or illustrate with a diagram.
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Chapter 8: Segment and Interim Reporting
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Q1) Which operating segments are separately reportable under the revenue test?
A) DVDs only.
B) DVDs and MP3s.
C) DVDs and VCRs.
D) VCRs and MP3s.
E) DVDs, VCRs, and MP3s.
Q2) What is the appropriate treatment in an interim financial report for a LIFO liquidation?
A) The LIFO liquidation is always ignored for interim reporting.
B) The LIFO liquidation should always be reflected in gross profit on an interim income statement.
C) The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim balance sheet and the interim income statement.
D) The LIFO liquidation should always result in replacement cost valuation of ending inventory on the interim income statement but not the interim balance sheet.
E) The LIFO liquidation should only be reflected in gross profit on an interim income statement if it is determined that it will not be replaced by year-end.
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Chapter 8: A: Segment and Interim Reporting
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Q1) According to U.S.GAAP, what revenues and expenses included in segment profit or loss need to be disclosed?
Q2) Prepare the revenue test and determine which of these segments was separately reportable.
Q3) Which of the following would be an acceptable grouping for a U.S.company to provide information by geographic area?
A) United States, All Other Countries.
B) United States, Europe, Taiwan.
C) United States, Asia, Germany.
D) United States, Central America, Mexico, Germany.
E) South America, Spain, All Other Countries.
Q4) Which tests must a company use to determine which operating segments require separate disclosure?
A) Revenue test and asset test.
B) Revenue test, profit or loss test, and asset test.
C) Revenue test and profit or loss test.
D) Profit or loss test and asset test.
E) Revenue test, asset test, and liability test.
Q5) What related items need to be disclosed in regard to total segment assets?
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Chapter 9: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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Q1) What happens when a U.S.company purchases goods denominated in a foreign currency and the foreign currency appreciates?
Q2) Compute the fair value of the foreign currency option at February 1, 2019.
A) $6,000.
B) $4,500.
C) $3,000.
D) $7,500.
E) $1,500.
Q3) What is the amount of Cost of Goods Sold for 2019 as a result of these transactions?
A) $200,000.
B) $195,000.
C) $201,000.
D) $202,600.
E) $203,000.
Q4) How does a foreign currency forward contract differ from a foreign currency option?
Q5) Assuming this is a cash flow hedge; prepare journal entries for this sales transaction and forward contract.
Page 19
Q6) What amount will Coyote Corp.report in its 2018 income statement for Sales?
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Chapter 9: A: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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Q1) A company has a discount on a forward contract for a foreign currency denominated asset.How is the discount recognized over the life of the contract under fair value hedge accounting?
A) As a debit to discount expense.
B) As a debit to amortization expense.
C) As a debit to accumulated other comprehensive income.
D) As a debit impact on net income, as a result of the hedge.
E) As a decreases to sales.
Q2) A U.S.company sells merchandise to a foreign company denominated in U.S.dollars.Which of the following statements is true?
A) If the foreign currency appreciates, a foreign exchange gain will result.
B) If the foreign currency depreciates, a foreign exchange gain will result.
C) No foreign exchange gain or loss will result.
D) If the foreign currency appreciates, a foreign exchange loss will result.
E) If the foreign currency depreciates, a foreign exchange loss will result.
Q3) What is meant by the spot rate?
Q4) What happens when a U.S.company sells goods denominated in a foreign currency and the foreign currency appreciates?
Q5) What amount will Coyote Corp.report in its 2018 income statement for Sales?
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Chapter 10: Translation of Foreign Currency Financial Statements
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Q1) Assume the functional currency is the Euro; compute the U.S.income statement amount for depreciation expense for 2018.
A) $8,190.
B) $8,370.
C) $8,820.
D) $9,090.
E) $8,550.
Q2) Prepare a balance sheet for this subsidiary in stickles and then translate the amounts into U.S.dollars.
Q3) Perkle Co.owned a subsidiary in Belgium; the subsidiary's functional currency was the Belgian franc.During 2018, Perkle engaged in hedging transactions to offset part of the subsidiary's net asset position.How should the effects of exchange rate fluctuations on the currency hedge be accounted for?
Q4) In translating a foreign subsidiary's financial statements, what exchange rate should be used for the subsidiary's revenues and expenses?
Q5) Under what circumstances would the remeasurement of a foreign subsidiary's financial statements be required?
Page 21
Q6) Contrast the purpose of remeasurement with the purpose of translation.
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Chapter 10: A: Translation of Foreign Currency Financial Statements
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Q1) In translating a foreign subsidiary's financial statements, which exchange rate does the current method require for the subsidiary's assets and liabilities?
A) The exchange rate in effect when each asset or liability was acquired.
B) The average exchange rate for the current year.
C) A calculated exchange rate based on market value.
D) The exchange rate in effect as of the balance sheet date.
E) The exchange rate in effect at the start of the current year.
Q2) Perkle Co.owned a subsidiary in Belgium; the subsidiary's functional currency was the Belgian franc.During 2018, Perkle engaged in hedging transactions to offset part of the subsidiary's net asset position.How should the effects of exchange rate fluctuations on the currency hedge be accounted for?
Q3) The financial statements for Perez are translated by its U.S.parent.What amount of gain or loss would be reported in its translated income statement?
A) $1,530.
B) $1,575.
C) $1,590.
D) $1,090.
E) $1,650.
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Chapter 11: Worldwide Accounting Diversity and International Accounting Standards
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Q1) What are recognition differences in financial reporting and what would be an example of a recognition difference between IFRS and U.S.GAAP?
Q2) On December 31, 2017, Carter Corp.a foreign subsidiary of Barter Corp., had a bank overdraft of $20,000 on one of its bank accounts.Bank overdrafts are an integral part of Carter's cash management policy.
1) Prepare the journal entry to convert the foreign subsidiary from its IFRS financial statements to U.S.GAAP financial statements.
2) Briefly explain why this journal entry is required.
Q3) Prepare the journal entry for the 2017 depreciation expense for Ide Corp.based on U.S.GAAP.
Q4) With regard to IFRS, what does SME refer to, and what is the significance with regard to financial reporting requirements?
Q5) What are some examples of accounting treatments under IFRS for SMEs for recognizing and measuring assets, liabilities, income, and expenses?
Q6) Why do countries have their own unique set of financial reporting practices?
Q7) What are the steps to be taken in preparing IFRS financial statements for the first time?
Page 23
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Chapter 11: A: Worldwide Accounting Diversity and International Accounting Standards
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Q1) What is the IOSCO?
Q2) All of the following are simplified principles for recognizing and measuring assets, liabilities, income, and expenses for SMEs under IFRS except:
A) Borrowing costs are expensed as incurred.
B) All development costs are expensed as incurred.
C) Actuarial gains and losses for defined benefit plans may be either recognized immediately or deferred and amortized.
D) Goodwill is amortized over its useful life.
E) The cost model for property, plant, and equipment must be used.
Q3) What is the significance of the "Norwalk Agreement?"
Q4) All of the following are influences on the development of a country's financial reporting practices except:
A) The country's legal system.
B) The country's political system.
C) The taxation system.
D) The country's cultural system.
E) The country's level of inflation.
Q5) What two reconciliations are required by IFRS 1 for first-time IFRS Adopters?
Q6) What are the four different ways IFRS can be used by a country?
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Chapter 12: Financial Reporting and the Securities and Exchange Commission
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Q1) What is Form 10-K?
A) A quarterly report filed with the SEC.
B) An annual report filed with the SEC.
C) A semiannual report filed with the SEC.
D) A form filed with the SEC before the company issues stock for the first time.
E) A form filed with the SEC before issuing stocks to acquire another company.
Q2) Which one of the following is not a division of the SEC?
A) The Division of Corporation Finance.
B) The Division of Investment Management.
C) The Division of Compliance Information.
D) The Division of Enforcement.
E) The Division of Trading and Markets.
Q3) Which statement is false regarding the Public Company Accounting Oversight Board (PCAOB)?
A) Regulates audit standards and independent audit firms.
B) Has five members appointed by the SEC.
C) Allows all members to be accountants, past or present.
D) Is under the oversight and enforcement of the SEC.
E) Is funded by fees levied on all publicly traded companies.
Q4) Name five securities offerings exempt from registration with the SEC.
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Chapter 12: A: Financial Reporting and the Securities and Exchange Commission
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Q1) Why is the SEC's Rule 14c-3 important to the accounting profession?
Q2) What are the responsibilities of the SEC's Division of Corporation Finance?
Q3) What was the purpose of the Securities Act of 1933?
Q4) Which one of the following is not a characteristic of the Public Company Accounting Oversight Board?
A) Minimizes self-regulation in the accounting profession.
B) Has the authority to amend, modify, repeal, or reject any audit standard of the ASB.
C) Only one member can be an accountant, past or present.
D) SEC has oversight and enforcement authority over the Board.
E) Enforces auditing, quality control, and independence standards and rules.
Q5) What are the four interconnected goals that the SEC has tried to achieve?
Q6) Which one of the following forms is used when companies have filed with the SEC for less than 36 months but are not large enough to file form S-3?
A) S-8.
B) S-6.
C) S-4.
D) S-1.
E) S-11.
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Chapter 13: Accounting for Legal Reorganizations and Liquidations
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Q1) What was the total amount of unsecured liabilities with priority?
A) $130,000.
B) $155,000.
C) $167,850.
D) $197,850.
E) $200,000.
Q2) Prepare a schedule to show the amount of assets that are available for unsecured creditors after payment of liabilities with priority.
Q3) What is the purpose ofChapter 7 of the Bankruptcy Reform Act?
Q4) To what does the termChapter 11 bankruptcy refer?
Q5) Prepare a schedule to show the amount of total payment on notes payable.(Round the payout percentage to one decimal place, for example, .1234 as 12.3 percent.)
Q6) What is an order for relief?
Q7) Prepare a schedule to show the amount of total liabilities with priority.
Q8) What term is used for a bankruptcy forced upon a debtor by its creditors?
Q9) Prepare a schedule to show the amount of unsecured liabilities without priority.
Q10) What is the payout percentage to unsecured creditors? (Round the percentage to a whole number and two decimal places.) Page 27
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Chapter 13: A: Accounting for Legal Reorganizations and Liquidations
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78 Verified Questions
78 Flashcards
Source URL: https://quizplus.com/quiz/66040
Sample Questions
Q1) How much cash would have been paid to an unsecured non-priority creditor who was owed a total of $1,300 by Mount Inc.? (Round the payout percentage to a whole number.)
Q2) Required:
Prepare a statement of financial affairs for Mount Inc.as of March 15, 2018.
Q3) How should liabilities (except for deferred income taxes) be reported by a company using fresh start accounting?
A) At the undiscounted sum of future cash payments.
B) At book value prior to the reorganization.
C) As partially secured liabilities.
D) At the present value of future cash payments.
E) As unsecured liabilities.
Q4) What are possible plans that management of a troubled business might create to mitigate substantial doubt that the entity will fail to make its debt payments within one year from the issuance of financial statements?
Q5) Who must accept and confirm the Reorganization plan?
Q6) What are the three categories of assets in a Statement of Financial Affairs?
Q7) What is the role of the trustee in the liquidation of a company?
Q8) Prepare a schedule to show the amount of total liabilities with priority. Page 29
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Chapter 14: Partnerships: Formation and Operation
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89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/66018
Sample Questions
Q1) What was the total capital balance for the partnership at December 31, 2018?
A) $852,000.
B) $780,000.
C) $708,000.
D) $744,000.
E) $594,000.
Q2) Which of the following is not a characteristic of a partnership?
A) The partnership itself pays no income taxes.
B) It is easy to form a partnership.
C) Any partner can be held personally liable for all debts of the business.
D) A partnership requires written Articles of Partnership.
E) Each partner has the power to obligate the partnership for liabilities.
Q3) Roberts retires and is paid $160,000 based on an independent appraisal of the business.If the goodwill method is used, what is the capital balance of Peter?
A) $ 20,000.
B) $ 60,000.
C) $110,000.
D) $120,000.
E) $230,000.
Q4) By what methods can a person gain admittance to a partnership?
Page 31
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Chapter 14: A: Partnerships: Formation and Operation
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89 Verified Questions
89 Flashcards
Source URL: https://quizplus.com/quiz/66039
Sample Questions
Q1) By what methods can a person gain admittance to a partnership?
Q2) Prepare the journal entries for the dissolution of Howell's partnership interest, assuming the goodwill method is to be applied.
Q3) What was Nolan's total share of net income for 2017?
A) $63,000.
B) $53,000.
C) $58,000.
D) $29,000.
E) $51,000.
Q4) What events cause the dissolution of a partnership?
Q5) Which of the following type of organization is classified as a partnership, or similar to a partnership, for tax purposes? (I.) Limited Liability Company
(II.) Limited Liability Partnership
(III.) Subchapter S Corporation
A) II only.
B) II and III.
C) I and II.
D) I and III.
E) I, II, and III.
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Chapter 15: Partnerships: Termination and Liquidation
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69 Verified Questions
69 Flashcards
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Sample Questions
Q1) Develop a predistribution plan for this partnership, assuming $12,000 of liquidation expenses are expected to be paid.
Q2) Prepare a schedule to calculate the safe payments to be made to the partners at the end of January.
Q3) If the assets could be sold for $228,000 and there are no liquidation expenses, what is the amount that Laurel would receive from the liquidation?
A) $36,000.
B) $ 0.
C) $ 2,500.
D) $38,250.
E) $67,250.
Q4) What is a safe cash payment?
Q5) How much of the existing cash balance could be distributed safely to partners at this time?
Q6) How much cash should each partner receive at this time, pursuant to a proposed schedule of liquidation?
Q7) What financial report would be prepared for a partnership that has begun liquidation but has not yet completed the process? What is the purpose of this report?
Page 33
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Chapter 15: A: Partnerships: Termination and Liquidation
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69 Verified Questions
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Sample Questions
Q1) What accounting transactions are not recorded by an accountant during partnership liquidation?
A) The conversion of partnership assets into cash.
B) The allocation of gains and losses from sales of assets.
C) The payment of liabilities and expenses.
D) The initiation of legal action by creditors of the partnership.
E) Write-off of remaining unpaid debts.
Q2) Which item is not shown on the statement of partnership liquidation?
A) Current cash balances.
B) Property owned by the partnership.
C) Liabilities still to be paid.
D) Personal assets of the partners.
E) Current capital account balances of the partners.
Q3) What would be the maximum amount Garr might have to contribute to the partnership to eliminate a deficit balance in his account?
Q4) The partnership of Rayne, Marin, and Fulton was being liquidated by the partners.Rayne was insolvent and did not have enough assets to pay all his personal creditors.Under what conditions might Rayne's personal creditors have claimed some of the partnership assets?
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Chapter 16: Accounting for State and Local Governments,
Part I
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83 Verified Questions
83 Flashcards
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Sample Questions
Q1) Government-wide financial statements benefit users by allowing them to do all of the following except:
A) Determine whether the government's overall financial position improved or deteriorated during the reporting period.
B) Understand the cost of providing services to the citizenry.
C) See how the government finances its programs.
D) Identify the government official responsible for managing each fund.
E) Understand the extent to which the government has invested in capital assets.
Q2) Shell City makes a transfer of $100,000 from the General fund to the Debt service fund.
Required:
Prepare the required journal entries and identify the funds in which they are recorded.
Q3) On January 1, 2018, Wakefield City purchased office supplies for $40,000.During the year, $35,000 of these supplies were used.
Required:
Record the journal entries for these transactions using the purchases method.(Disregard the encumbrance entries.)
Q4) Under modified accrual accounting, when are expenditures recorded?
Page 35
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Chapter 16: A: Accounting for State and Local Governments,
Part I
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83 Verified Questions
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Sample Questions
Q1) For what is a special revenue fund used to account?
Q2) Simple City has recorded the purchase order of two trucks for a total of $100,000. Prepare the journal entries to reflect that the two trucks have been received with an invoice amount of $105,000.This invoice has been approved but not yet paid.Identify the fund in which the entries are recorded.
Q3) When a city collects admission fees from citizens who use the public swimming pool, the money should be recorded in
A) The general fund.
B) An enterprise fund.
C) A capital projects fund.
D) An agency fund.
E) An internal service fund.
Q4) Which of the following is a governmental fund?
A) Enterprise fund.
B) Internal service fund.
C) Permanent fund.
D) Investment trust fund.
E) Agency fund.
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Chapter 17: Accounting for State and Local Governments,
Part II
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42 Verified Questions
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Sample Questions
Q1) What is meant by the term fiscally independent?
Q2) What three criteria must be met to identify a governmental unit as a primary government?
Q3) How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?
Q4) Prepare the journal entry/entries for the two transactions for the purposes of preparing the government-wide financial statements.
Q5) What three criteria must be met before a governmental unit can elect to not capitalize and therefore report a work of art or historical treasure as an asset?
Q6) What is the highest level of authoritative rules for state and local government accounting?
A) Technical Bulletins
B) Implementation Guides
C) Official Statements of GASB
D) Interpretations no longer in effect
E) Financial Accounting Standards
Q7) What is meant by the term legally independent?
Q8) What are the three broad sections of a state or local government's CAFR?
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Chapter 17: A: Accounting for State and Local Governments,
Part II
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47 Verified Questions
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Sample Questions
Q1) What three criteria must be met to identify a governmental unit as a primary government?
Q2) Prepare a Statement of Revenues, Expenditures and Other Changes in Fund Balances for the year ended December 31, 2018.
Q3) Jones College, a public institution of higher education, must prepare financial statements
A) As if the college was an enterprise fund.
B) Following the same rules as state and local governments.
C) According to GAAP.
D) As if the college was a fiduciary fund.
E) In the same manner as private colleges and universities.
Q4) Which one of the following is a criterion for identifying a primary government?
A) it has an appointed board of directors.
B) it is fiscally dependent.
C) it is a local government.
D) it has a separately elected governing board.
E) it must prepare financial statements.
Q5) What three criteria must be met before a governmental unit can elect to not capitalize and therefore report a work of art or historical treasure as an asset?
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Chapter 18: Accounting for Not-For-Profit Entities
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72 Verified Questions
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Sample Questions
Q1) What amount should be reclassified on the Statement of Activities for 2017 from the Temporarily Restricted column to the Unrestricted column?
A) $ 2,000.
B) $ 5,000.
C) $ 7,000.
D) $10,000.
E) $12,000.
Q2) In not-for-profit accounting, an acquisition occurs when one not-for-profit entity obtains:
A) Significant influence over another not-for-profit entity.
B) More than 50% of another not-for-profit entity's fixed assets.
C) The right to collect more than 20% of pledged contributions.
D) Control over another not-for-profit entity.
E) None of these answer choices are correct. An acquisition can only occur for profit-oriented entities.
Q3) $520,000 of the $2,720,000 was expected to be uncollectible. Required:
Prepare the necessary journal entry to record the anticipated uncollectible amount.
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Chapter 18: A: Accounting for Not-For-Profit Entities
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72 Verified Questions
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Sample Questions
Q1) If the total acquisition value of an acquired not-for-profit entity is greater than the fair value of all identifiable net assets of the entity, and that entity's revenues are not generated by rendering goods or services or from membership dues, then the excess of acquisition value over identifiable net assets is immediately reported:
A) As goodwill on the consolidated Statement of Position.
B) As a pro-rata increase to the identifiable assets and liabilities acquired.
C) As a direct reduction in unrestricted net assets on the Statement of Financial Position.
D) As a reduction in unrestricted net assets on the Statement of Activities.
E) As an increase in other assets on the Statement of Financial Position.
Q2) Not-for-profit entities that are eligible to obtain tax-exempt status under Internal Revenue Code section 501(c)(4) are
A) Those promoting literacy.
B) Those promoting scientific research.
C) Chambers of Commerce.
D) Professional sports leagues.
E) Those functioning exclusively to promote social welfare.
Q3) Record the journal entries that reflect all of this information.
Q4) What are the objectives of accounting for a not-for-profit entity?
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Chapter 19: Accounting for Estates and Trusts
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81 Verified Questions
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Source URL: https://quizplus.com/quiz/66025
Sample Questions
Q1) The decedent resided in a state that treats a demonstrative legacy shortfall as a general legacy.How much would James have received from the estate?
A) $50,000.
B) $40,000.
C) $25,000.
D) $45,000.
E) $30,000.
Q2) Additional debts of $78,000 were discovered.Debts totaling $130,000 were paid.Prepare the journal entry to record the transaction.
Q3) What is the purpose of the Uniform Probate Code?
Q4) What guidelines must be followed to classify a transaction as associated with the principal of an estate or as an income transaction?
A) Generally accepted accounting principles.
B) Federal estate laws.
C) State estate laws.
D) The Internal Revenue Code.
E) The decedent's intentions or state laws.
Q5) What is meant by estate accounting?
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Chapter 19: A: Accounting for Estates and Trusts
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81 Verified Questions
81 Flashcards
Source URL: https://quizplus.com/quiz/66034
Sample Questions
Q1) Prepare the journal entry to record ordinary repairs to the rental property of $5,000.
Q2) What is meant by estate accounting?
Q3) Prepare the journal entry for claims of $100,000 made against the estate for various debts incurred before the decedent's death, and $20,000 for funeral expense bills.
Q4) In settling an estate, what is the meaning of the term devise?
Q5) Which of the following is usually not accounted for as an adjustment to a trust's income?
A) Ordinary repairs expense.
B) Rent expense.
C) Investment costs and commissions.
D) Insurance expense.
E) Property taxes.
Q6) Debts of $52,000 were discovered. Prepare the journal entry to record the transaction.
Q7) How may real property be treated in identifying estate property subject to probate?
Q8) Prepare the journal entry to record the distribution of $4,000 to Anna Lee, an income beneficiary.
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