Acct 550 Midterm

Topics: Balance sheet, Income statement, Revenue Pages: 7 (1228 words) Published: September 7, 2014

Grading Summary
These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. Date Taken: 8/3/2014
Points Received: 188 / 200 (94%)
Question 1. Question :
(TCO A) The Financial Accounting Standards Board employs a "due process" system, which: has all CPAs in the United States vote on a new statement. enables interested parties to express their views on issues under consideration. identifies the accounting issues that are the most important. requires that all accountants receive a copy of financial standards. Points Received: 5 of 5

Question 2. Question :
(TCO A) The cash method of accounting
is used by most publicly traded corporations for financial statement purposes. is not in accordance with the matching principle for most publicly traded corporations. often is used on the income statement by large, publicly held companies. All of the above

Question 3. Question :
(TCO A) Which of the following is an ingredient of relevance? Verifiability
Completeness
Neutrality
Predictive value

Question 4. Question :
(TCO A) The characteristic that is demonstrated when a high degree of consensus can be secured among independent measurers using the same measurement methods is relevance.
reliability.
verifiability.
neutrality.

Question 5. Question :
(TCO A) Which of the following is not a basic element of financial statements? Assets
Balance sheet
Losses
Revenues

Question 6. Question :
(TCO A) Which basic element of financial statements arises from peripheral or incidental transactions? Assets
Liabilities
Gains
Expenses

Question 7. Question :
(TCO A) Which basic assumption may not be followed when a firm in bankruptcy reports financial results? Economic entity assumption
Going concern assumption
Periodicity assumption
Monetary unit assumption

Question 8. Question :
(TCO D) Balance sheet information is useful for all of the following except to compute rates of return.
analyze cash inflows and outflows for the period.
evaluate capital structure.
assess future cash flows.

Question 9. Question :
(TCO D) The amount of time that is expected to elapse until an asset is realized or otherwise converted into cash is referred to as solvency.
financial flexibility.
liquidity.
exchangeability.

Question 10. Question :
(TCO A) The quality of information that gives assurance that is reasonably free of error and bias and is complete is relevance.
faithful representation.
verifiability.
neutrality.

Question 1. Question :
(TCO D) The basis for classifying assets as current or noncurrent is conversion to cash within the accounting cycle or one year, whichever is shorter.
the operating cycle or one year, whichever is longer.
the accounting cycle or one year, whichever is longer.
the operating cycle or one year, whichever is shorter.

Question 2. Question :
(TCO A) What is FASB Codification? Explain in detail.
Instructor Explanation: The codification takes the statements and other pronouncements and arranges the information by topic. Per the FASB, the new system will 1. reduce the amount of time and effort required to solve an accounting research issue; 2. mitigate the risk of noncompliance with standards through improved usability of the literature; 3. provide accurate information with real-time updates as new standards are released; and 4. assist the FASB with the research and convergence efforts required during the standard-setting process.

Question 3. Question :
(TCO C) At Ruth Company, events and transactions during 2010 included the following. The tax rate for all items is 30%. (1) Depreciation for 2008 was found to be understated by $30,000. (2) A strike by the employees of a...
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