ACCT 370 practice final exam questions
and answers Graded A+
Which one of the following factors makes it difficult for financial analysts to use
trend analysis? - Correct answer-an aging asset base
Floating-rate debt is the most common method for lenders to protect themselves
from losses that may arise as a result of: - Correct answer-increases in the market
interest rate.
Which of the following is not an accurate statement regarding the retirement of
debt? - Correct answer-When debt is retired before the maturity date, a loss occurs
if the market rate of interest increased subsequent to the issue of the bond.
An impairment loss is reported on the income statement as: - Correct answer-part
of income from continuing operations.
Expenditures included in the initial balance sheet carrying amount of a long-lived
asset are: - Correct answer-capitalized costs.
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, The two broad categories of differences that result from determining the pre-tax
book income and the taxable income are: - Correct answer-temporary differences
and permanent differences.
Consistent with GAAP, bonds are reported on the balance sheet at market value. -
Correct answer-false (recorded at amortized costs)
Which of the following does not represent guidance for assets held for sale? -
Correct answer-They are reported at the lower of book value or fair value.
Replacement or current cost is an example of the economic sacrifice approach for
valuing long-lived assets. - Correct answer-true
The FASB has been able to guard against management manipulation of earnings as
a result of asset impairments by: - Correct answer-prohibiting restoration of
previously recognized impairment losses.
Secured bonds are __________ by assets held by the bond issuer. - Correct answer-
collateralized
Managers in lessee companies tend to prefer that leases be treated as finance
leases. - Correct answer-false
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and answers Graded A+
Which one of the following factors makes it difficult for financial analysts to use
trend analysis? - Correct answer-an aging asset base
Floating-rate debt is the most common method for lenders to protect themselves
from losses that may arise as a result of: - Correct answer-increases in the market
interest rate.
Which of the following is not an accurate statement regarding the retirement of
debt? - Correct answer-When debt is retired before the maturity date, a loss occurs
if the market rate of interest increased subsequent to the issue of the bond.
An impairment loss is reported on the income statement as: - Correct answer-part
of income from continuing operations.
Expenditures included in the initial balance sheet carrying amount of a long-lived
asset are: - Correct answer-capitalized costs.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, The two broad categories of differences that result from determining the pre-tax
book income and the taxable income are: - Correct answer-temporary differences
and permanent differences.
Consistent with GAAP, bonds are reported on the balance sheet at market value. -
Correct answer-false (recorded at amortized costs)
Which of the following does not represent guidance for assets held for sale? -
Correct answer-They are reported at the lower of book value or fair value.
Replacement or current cost is an example of the economic sacrifice approach for
valuing long-lived assets. - Correct answer-true
The FASB has been able to guard against management manipulation of earnings as
a result of asset impairments by: - Correct answer-prohibiting restoration of
previously recognized impairment losses.
Secured bonds are __________ by assets held by the bond issuer. - Correct answer-
collateralized
Managers in lessee companies tend to prefer that leases be treated as finance
leases. - Correct answer-false
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
