13 Jan a current asset, and changes

Midterm quiz

Question 1 Which of the following was not a criticism of the development of accounting standards by the Accounting Principles Board?

Harmonization. The accounting standards developed were dissimilar to those developed by the International Accounting Standards Committee.

Response time. The emerging accounting problems were not being investigated and solved quickly enough by the part-time members.

The independence of the members of the APB. The individuals serving on the board had full-time responsibilities elsewhere that might influence their views of certain issues.

The structure of the board. The largest eight public accounting firms (at that time) were automatically awarded one member, and there were usually five or six other public accountants on the APB.

Question 2 Which of the following is the professional organization of university accounting professors?

Financial Executives Institute

American Accounting Association

American Institute of Certified Public Accountants

American Institute of Accountants

Question 3 The net realizable value of receivables is calculated as the face value of the receivables less adjustments for:

credit sales.

actual uncollected amounts adjusted for purchase discounts.

estimated uncollectible accounts.

bad debts already written off.

Question 4 Who was the author of Accounting Research Study No. 1, The Basic Postulates of Accounting?

Maurice Moonitz

Thomas Hatfield

Robert Sprouse

Alvin Jennings

Question 5 What is the objective of financial reporting?

Provide information that excludes claims to the resources

Provide information that is useful to management in making decisions

Provide information that clearly portrays nonfinancial transactions

Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors

Question 6 What is the name given to the agreement between the FASB and IASC to harmonize accounting standards?

The Paris Accords

The Norwalk Agreement

The Washington DC agreement

The London agreement

Question 7 Which of the following is not a qualitative characteristic contained in the IASB’s Framework for the Preparation of Financial Statements?

Understandability

Reliability

Relevance

Timeliness

Question 8 Which of the following research approaches is attributed to DR Scott?

Inductive

Deductive

Ethical

Pragmatic

Question 9 Which of the following outcomes of providing accounting information is an attempt to identify individual securities that are mispriced by reviewing all available financial information?

Capital asset pricing model

Agency theory

Efficient markets

Fundamental analysis

Question 10 A trading security is measured at fair value on the balance sheet date and reported as:

a current asset, and changes in fair value are reported in accumulated other comprehensive income as unrealized gains and losses.

either a current or noncurrent asset depending on whether it meets the definition of a current asset.

a current asset, and changes in fair value are reported in earnings as unrealized gains and losses.

a current asset, and changes in fair value are reported in earnings as realized gains and losses.

Question 11 What is goodwill?

How is the recorded value of goodwill determined?

How is goodwill written off under the provisions of SFAS No. 142 now FASB ASC 350?