Assignment
MULTIPLE CHOICE
1. Charging off equipment that cost less than $20 would be an example of the application of:
a. going concern.
b. cost.
c. matching.
d. materiality.
e. realization.
2. Valuing assets at their liquidation values is not consistent with:
a. conservatism.
b. materiality.
c. going concern.
d. time period.
e. None of the answers are correct.
3. Valuing inventory at the lower of cost or market is an application of the:
a. time period assumption.
b. realization principle.
c. going concern principle.
d. conservatism principle.
e. None of the answers are correct.
4. The realization principle leads accountants to usually recognize revenue at:
a. the end of production.
b. during production.
c. the receipt of cash.
d. the point of sale.
e. None of the answers are correct.
5. All but one of the following statements indicates a difference between the Financial Accounting Standards Board (FASB) and prior approaches. Select the one that is not a difference.
a. The FASB is independent of the AICPA.
b. The size of the board is much smaller.
c. The FASB has broader representation.
d. The FASB is the primary board for the development of generally accepted accounting principles.
e. Members of the FASB serve on a full-time basis.
6. By law, the setting of accounting standards is the responsibility of the:
a. AICPA Committee on Accounting Procedure.
b. New York Stock Exchange.
c. Accounting Principles Board.
d. Securities and Exchange Commission.
e. Financial Accounting Standards Board.
7. The assumption that allows accountants to accept some inaccuracy, because of incomplete information about the future, in exchange for more timely reporting is:
a. conservatism.
b. time period.
c. business entity.
d. materiality.
e. realization.
8. Accountants provide for inflation using which of the following accounting principles?
a. Going concern
b. Time period
c. Conservatism
d. Materiality
e. None of the answers are correct.
9. The following data relate to Falcon Company for the year ended December 31, 2012. Falcon Company uses the cash basis.
|
Sales for cash
|
$180,000
|
|
Sales for credit
|
190,000
|
|
Cost of inventory sold
|
210,000
|
|
Collections from customers
|
350,000
|
|
Purchases of inventory on credit
|
200,000
|
|
Payment for purchases
|
220,000
|
|
Selling expenses (accrual basis)
|
60,000
|
|
Payment for selling expenses
|
70,000
|
Which of the following amounts represents income for Falcon Company for the year ended December 31, 2012?
a. $90,000
b. $80,000
c. $70,000
d. $60,000
e. None of the answers are correct.
10. Other than December, the most popular month for fiscal year-end is:
a. January.
b. March.
c. June.
d. September.
e. October.