ACCT 301A - CSUF Wiley Final Exam: Questions &
Detailed Answers
If a company uses the gross method of recording accounts receivable from
customers, then sales discounts taken s could be recoded as.... Right Ans - a
deduction from sales in the income statement
GAAP specifies, regarding the amortization of a premium or discount on a
debt security, the... Right Ans - effective interest method allocation should
be used but other methods can be applied if there is no material difference in
the results obtained
Which of the following costs are capitalized for self-constructed assets?
Right Ans - Materials, labor and overhead directly rerouted to construction
only
Which of the following is not considered cash for financial reporting
purposes? Right Ans - posted checks and IOUs
Why do companies provide trade discounts? Right Ans - to avoid frequent
charges in catalogs and to easily alter prices for different customers
Which of the following statements is true regarding recovery of impairment
on an intangible asset? Right Ans - GAAP allows for recovery of impairment
for asters help up for sale up to net realizable value
Plant assets purchases on long-term credit contracts should be accounted for
at... Right Ans - the present value of the future payments
Debt securities acquired by a corporation which are accounted for by
recognized unrealized holding gains or losses as other comprehensive income
and as a stockholders' equity are... Right Ans - avaliable-for-sale debt
securities
The notes to the financial statements should include info about acquired
intangible asset and aggregate amortization expense for how many
succeeding years? Right Ans - 5 years
, In a business combination, companies record identifiable intangible assets
that they can reliably measure. All other intangible assets, too difficult to
identify or measure re recorded as .... Right Ans - goodwill
the coverability test compares... Right Ans - the carrying value of the asset
to its undercounted expected future net cash flows
for the composite methods, the composite... Right Ans - life is the total
depreciation base divided by the total annual depreciation
When a company is acquired, which of these intangible assets, unrecorded on
the acquired company's books, might be recorded in attention to goodwill?
Right Ans - A brand name
A patent
A customer list
(all these answers are correct)
Which of the following is not a debt security? Right Ans - Loans receivable
Asset turnover is a measure of... Right Ans - how efficiently a company uses
its assets to generate sales
which of the following does not describe intangible assets? Right Ans - they
re financial instruments
depletion expense is... Right Ans - is usually reported as cost of goods sold
when the resource is sold
the return on total asset is computed by dividing Right Ans - net income by
average total assets
debt securities that are accounted for at amortized cost, not fair value are...
Right Ans - held-to-maturity debt securities
when a company holds between 20% and 50% of the outstanding stock of an
invested, which of the following statement applies? Right Ans - the investor
should use the equity method to account for its investment unless
circumstances indicate that it is unable to exercise "significant influence" over
the invested
Detailed Answers
If a company uses the gross method of recording accounts receivable from
customers, then sales discounts taken s could be recoded as.... Right Ans - a
deduction from sales in the income statement
GAAP specifies, regarding the amortization of a premium or discount on a
debt security, the... Right Ans - effective interest method allocation should
be used but other methods can be applied if there is no material difference in
the results obtained
Which of the following costs are capitalized for self-constructed assets?
Right Ans - Materials, labor and overhead directly rerouted to construction
only
Which of the following is not considered cash for financial reporting
purposes? Right Ans - posted checks and IOUs
Why do companies provide trade discounts? Right Ans - to avoid frequent
charges in catalogs and to easily alter prices for different customers
Which of the following statements is true regarding recovery of impairment
on an intangible asset? Right Ans - GAAP allows for recovery of impairment
for asters help up for sale up to net realizable value
Plant assets purchases on long-term credit contracts should be accounted for
at... Right Ans - the present value of the future payments
Debt securities acquired by a corporation which are accounted for by
recognized unrealized holding gains or losses as other comprehensive income
and as a stockholders' equity are... Right Ans - avaliable-for-sale debt
securities
The notes to the financial statements should include info about acquired
intangible asset and aggregate amortization expense for how many
succeeding years? Right Ans - 5 years
, In a business combination, companies record identifiable intangible assets
that they can reliably measure. All other intangible assets, too difficult to
identify or measure re recorded as .... Right Ans - goodwill
the coverability test compares... Right Ans - the carrying value of the asset
to its undercounted expected future net cash flows
for the composite methods, the composite... Right Ans - life is the total
depreciation base divided by the total annual depreciation
When a company is acquired, which of these intangible assets, unrecorded on
the acquired company's books, might be recorded in attention to goodwill?
Right Ans - A brand name
A patent
A customer list
(all these answers are correct)
Which of the following is not a debt security? Right Ans - Loans receivable
Asset turnover is a measure of... Right Ans - how efficiently a company uses
its assets to generate sales
which of the following does not describe intangible assets? Right Ans - they
re financial instruments
depletion expense is... Right Ans - is usually reported as cost of goods sold
when the resource is sold
the return on total asset is computed by dividing Right Ans - net income by
average total assets
debt securities that are accounted for at amortized cost, not fair value are...
Right Ans - held-to-maturity debt securities
when a company holds between 20% and 50% of the outstanding stock of an
invested, which of the following statement applies? Right Ans - the investor
should use the equity method to account for its investment unless
circumstances indicate that it is unable to exercise "significant influence" over
the invested
