ACCY 113 EXAM 1. Newest 2026-2027.
Questions & Correct Answers. Graded
A
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
cannot be repossessed. The revenue recognition method used by Bert
would be - ANSInstallment sales or cost recovery
Distinguishing between operating and capital leases is due in large part to
the accounting concept of - ANSSubstance over form
Explodia.com sells fireworks over the Internet. Customers access
Explodia's website and select particular products, and Explodia refers the
customer order to a fireworks manufacturer who fulfills the order, ships to
the customer, and pays Explodia a 20% commission. Which of the
following is true about Explodia - ANSExplodia is an agent in this
transaction
First disclosure note to financial statements - ANSsummary of significant
accounting policies
For a typical manufacturing company, the most common critical point for
recognizing revenue is the date - ANSThe product is delivered
1
, For the lessee to account for a lease as a capital lease, the lease must
meet - ANSAny one of the four criteria specified by GAAP regarding
accounting for leases
For the lessor to account for a lease as a capital lease, the lease must
meet - ANSAny one of first four classification criteria and both of the last
two additional conditions specified by GAAP regarding accounting for
leases
From the perspective of the lessee, leases may be classified as either -
ANSCapital or operating
From the perspective of the lessor, leases may be classified as either -
ANSOperating, direct financing, or sales-type
GAAP requires that some lease agreements be accounted for as
purchases. The theoretical justification for this treatment is that a lease of
this type - ANSConveys most of the risks and benefits of property
ownership
Installment sales method - ANSRequires firms track the gross profit
percentage associated with a particular sale
Jing Statistical Services operates a website that links experienced
statisticians with businesses that need data analyzed. Statisticians post
their rates, qualifications, and references on the website, and Jing receives
25% of the fee paid to the statisticians in exchange for identifying potential
2
Questions & Correct Answers. Graded
A
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
cannot be repossessed. The revenue recognition method used by Bert
would be - ANSInstallment sales or cost recovery
Distinguishing between operating and capital leases is due in large part to
the accounting concept of - ANSSubstance over form
Explodia.com sells fireworks over the Internet. Customers access
Explodia's website and select particular products, and Explodia refers the
customer order to a fireworks manufacturer who fulfills the order, ships to
the customer, and pays Explodia a 20% commission. Which of the
following is true about Explodia - ANSExplodia is an agent in this
transaction
First disclosure note to financial statements - ANSsummary of significant
accounting policies
For a typical manufacturing company, the most common critical point for
recognizing revenue is the date - ANSThe product is delivered
1
, For the lessee to account for a lease as a capital lease, the lease must
meet - ANSAny one of the four criteria specified by GAAP regarding
accounting for leases
For the lessor to account for a lease as a capital lease, the lease must
meet - ANSAny one of first four classification criteria and both of the last
two additional conditions specified by GAAP regarding accounting for
leases
From the perspective of the lessee, leases may be classified as either -
ANSCapital or operating
From the perspective of the lessor, leases may be classified as either -
ANSOperating, direct financing, or sales-type
GAAP requires that some lease agreements be accounted for as
purchases. The theoretical justification for this treatment is that a lease of
this type - ANSConveys most of the risks and benefits of property
ownership
Installment sales method - ANSRequires firms track the gross profit
percentage associated with a particular sale
Jing Statistical Services operates a website that links experienced
statisticians with businesses that need data analyzed. Statisticians post
their rates, qualifications, and references on the website, and Jing receives
25% of the fee paid to the statisticians in exchange for identifying potential
2
