ACC 305 Wk 2 Quiz Results

Topics: Generally Accepted Accounting Principles, Income, Cash flow statement Pages: 2 (451 words) Published: November 24, 2014
1. The percentage-of-completion method violates the general rule on revenue recognition that: (Points : 1)        Collection is reasonably assured.
       Costs are known or reasonably estimated.
       The earnings process is complete., pg 236
       Collections have been received.

2. The financial statement presentation of a change in depreciation methods is most similar to that of reporting: (Points : 1)        Changes in accounting estimates. Pg. 189
       Prior period adjustments.
       Correction of errors.
       Extraordinary items.

3. A change in depreciation methods is accounted for: (Points : 1)        Retrospectively.
       As a cumulative adjustment to income in the year of change.        Prospectively, like changes in accounting estimates. Pg. 190        None of the above.

4. The FASB's stated preference for reporting operating cash flows is the: (Points : 1)        Indirect method.
       Direct method.
       Working capital method.
       All financial resources method.

5. Using the percentage-of-completion method of accounting for long-term contracts, the percentage of completion used to recognize gross profit in the first year usually is determined by measuring: (Points : 1)        Costs incurred in the first year, divided by estimated remaining costs to complete the project.        Costs incurred in first year, divided by estimated total costs of the completed project.        Costs incurred in first year, divided by estimated gross profit.        None of the above is correct.

6. The rationale for adoption of the percentage-of-completion method is that: (Points : 1)        Results are more conservative.
       It provides a measure of periodic accomplishment.        It is a better match with legal ownership.
       It results in a lower income tax.

7. Bert's Meat Market sells quarters and sides of beef on the installment basis. Losses on receivables are very difficult to predict, and meat products...
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