Grading Summary Essay Example for Free

Grading Summary Essay doubt 1. mind (TCO A) The Financial Accounting Standards Board employs a due process outline, which has all CPAs in the joined States vote on a new bidding. enables interested parties to express their views on unwraps under consideration. identifies the write up issues that argon the most important. requires that all measureants receive a copy of pecuniary standards. Points Received 5 of 5 forefront 2. Question (TCO A) The interchange method of beis used by most publicly traded corporations for financial statement purposes. is non in accordance with the matching principle for most publicly traded corporations. often is used on the income statement by large, publicly held companies. All of the aboveQuestion 3. Question (TCO A) Which of the following is an ingredient of relevancy?VerifiabilityCompletenessNeutralityPredictive valueQuestion 4. Question (TCO A) The property that is demonstrated when a high storey of consensus can be secured among ind ependent measurers using the same measurement methods isrelevance.reliability.verifiability.neutrality.Question 5. Question (TCO A) Which of the following is not a canonical element of financial statements?AssetsBalance sheetLossesRevenuesQuestion 6. Question (TCO A) Which basic element of financial statements arises from peripheral or incidental transactions?AssetsLiabilitiesGains outgosQuestion 7. Question (TCO A) Which basic supposition may not be followed when a firm in bankruptcy reputes financial results? Economic entity preconditionGoing concern assumptionPeriodicity assumptionMo utmostary unit assumptionQuestion 8. Question (TCO D) Balance sheet information is useful for all of the following except to compute rates of return. snap cash inflows and outflows for the period.evaluate pileus structure.assess future cash flows.Question 9. Question (TCO D) The bill of magazine that is expected to elapse until an asset is realized or otherwise converted into cash is referred t o as solvency.financial flexibility.liquidity.exchangeability.Question 10. Question (TCO A) The quality of information that gives assurance that is reasonably free of error and bias and is realized is relevance.faithful representation.verifiability.neutrality.Question 1. Question (TCO D) The basis for classifying assets as current or noncurrent is conversion to cash within the accounting cycle or one socio-economic class, whichever is shorter.the operating cycle or one year, whichever is longer.the accounting cycle or one year, whichever is longer.the operating cycle or one year, whichever is shorter.Question 2. Question (TCO A) What is FASB code? Explain in detail. instructor Explanation The codification takes the statements and other pronouncements and arranges the information by topic. Per the FASB, the new system will 1. reduce the amount of time and effort required to solve an accounting research issue 2. mitigate the risk of noncompliance with standards through improved usab ility of the literature 3. provide accurate information with real time updates as new standards atomic number 18 released and 4. assist the FASB with the research and convergence efforts required during the standard-setting process.Question 3. Question (TCO C) At Ruth accompany, events and transactions during 2010 included the following. The tax rate for all items is 30%. (1) Depreciation for 2008 was found to be understated by $30,000. (2) A strike by the employees of a supplier resulted in a passage of $25,000. (3) The inventory at December 31, 2008 was overstated by $40,000. (4) A flood destroyed a make that had a book value of $500,000. Floods are very uncommon in that area. What would the effect of these events and transactions on 2010 income from continuing operations net of tax be? Instructor Explanation $25,000 $7,500 = $17,500Question 4. Question (TCO C) For the year ended December 31, 2010, Transformers Inc. reported the following. Net income $60,000Preferred dividend s declared $10,000Common dividend declared $2,000Unrealized inject loss, net of tax $1,000 carry earnings, beginning equipoise $80,000Common stock sold during the year Retained earnings, beginning balance $80,000 Common stock $40,000Accumulated Other Comprehensive Income, Beginning Balance $5,000 What would Transformers report as the ending balance of retained earnings? Instructor Explanation $80,000 + $60,000 $10,000 $2,000 = $128,000Question 5. Question (TCO C) Madsen alliance reported the following information for 2010. Sales revenue $510,000Cost of goods sold $350,000Operating depreciates $55,000Unrealized dimension gain on available-for-sale securities $40,000 Cash dividends received on the securities $2,000For 2010, what would Madsen report as other comprehensive income? Instructor Explanation Other comprehensive income = $40,000Question 6. Question (TCO B) accommodation for doubtful accounts on 1/1/10 was $50,000. The balance in the allowance account on 12/31/10 afte r making the one-year adjusting entry was $65,000, and during 2010, bad debts written dark amounted to $40,000. You are to provide the missing adjusting entry. satisfy indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment. Instructor Explanation DR Bad Debt Expense 55,000 CR Allowance for uncertain Accounts 55,000 end point balance $65,000Beginning balance 50,000Difference 15,000Written collide with 40,000Adjustment $55,000Question 7. Question (TCO B) Allowance for doubtful accounts on 1/1/10 was $75,000. The balance in the allowance account on 12/31/10 after making the annual adjusting entry was $60,000, and during 2010, bad debts written off amounted to $30,000. You are to provide the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment. Instructor Explanation D R Bad Debt Expense 15,000 CR Allowance for Doubtful Accounts 15,000Ending balance $60,000Beginning balance 75,000Difference -15000Written off 30000Adjustment $15,000Question 8. Question (TCO B) Allowance for doubtful accounts on 1/1/10 was $60,000. The balance in the allowance account on 12/31/10 after making the annual adjusting entry was $55,000, and during 2010, bad debts written off amounted to $40,000. You are to provide the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment. Instructor Explanation 12/31/10 Ending Balance 55,0001/1/10 Beginning Balance 60,000Adjustment -5,000Written off 40,000Adjusting entry 35,000DR Bad Debts Expense, 35,000CR Allowance for Doubtful Accounts, 35,000Question 9. Question (TCO B) Prepaid rent at 1/1/10 was $30,000. During 2010, rent payments of $120,000 were do and charged to rent expense. The 2010 income statement shows as a general expense the item rent expense in the amount of $125,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment Instructor Explanation DR Rent Expense 5,000CR Prepaid Rent 5,000Rent expense $125,000Less cash paid 120,000Reduction in prepaid rent $5,000Question 10. Question (TCO D) Which of the following should be reported for capital stock?The shares authorizedThe shares issuedThe shares expectantAll of the aboveQuestion 11. Question (TCO D) An example of an item that is not an element of working capital is accrued interest on notes receivable.goodwill.goods in process.temporary investments.Question 12. Question (TCO A) Financial information exhibits the characteristic of consistency when expenses are reported as charges against revenue in the period in which they are paid. accounting entities give accountable events the same accountingtreatment from period to period. extraordinary gains and losses are not included on the income statement. accounting procedures are adopted which give a consistent rate of net incomeQuestion 13. Question (TCO D) The current assets section of the balance sheet should includemachinery.patents.goodwill.inventory.Question 14. Question (TCO D) Houghton Company has the following items common stock, $720,000 treasury stock, $85,000 deferred taxes, $100,000, and retained earnings, $313,000. What total amount should Houghton Company report as stockholders right? $848,000$948,000$1,048,000$1,118,000Instructor Explanation General Feedback b. $720,000 $85,000 + $313,000 = $948,000.