How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask CPA Cindy Your Own Question

CPA Cindy
CPA Cindy, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 57
Experience:  15 years in public accounting (Big 4)
28529190
Type Your Finance Question Here...
CPA Cindy is online now
A new question is answered every 9 seconds

1. Which of the following statements is not an objective of

Customer Question

1. Which of the following statements is not an objective of financial reporting?
a. Provide information that is useful in investment and credit decisions.
b. Provide information about enterprise resources, claims to those resources, and changes to them.
c. Provide information on the liquidation value of an enterprise.
d. Provide information that is useful in assessing cash flow prospects.

2. The Financial Accounting Standards Board
a. has issued a series of pronouncements entitled Statements on Auditing Standards.
b. was the forerunner of the current Accounting Principles Board.
c. is the arm of the Securities and Exchange Commission responsible for setting financial accounting standards.
d. is appointed by the Financial Accounting Foundation.

3. The Financial Accounting Standards Board employs a "due process" system which
a. is an efficient system for collecting dues from members.
b. enables interested parties to express their views on issues under consideration.
c. identifies the accounting issues that are the most important.
d. requires that all accountants must receive a copy of financial standards

4. In the House of GAAP, is the following on the highest level of authoritative status (meaning among the most authoritative)?
FASB FASB
Statement Statement
FASB of Financial of Financial
Technical Accounting FASB Accounting
Bulletin Standards Interpretation Concepts
a. Yes Yes Yes Yes
b. Yes Yes Yes No
c. No Yes No No
d. No Yes Yes N

5. The two primary qualities that make accounting information useful for decision making are
a. comparability and consistency.
b. materiality and timeliness.
c. relevance and reliability.
d. reliability and comparability.

6. The elements of financial statements include investments by owners. These are increases in an entity's net assets resulting from owners'
a. transfers of assets to the entity.
b. rendering services to the entity.
c. satisfaction of liabilities of the entity.
d. all of these.

7. Which of the following is an implication of the going concern assumption?
a. The historical cost principle is credible.
b. Depreciation and amortization policies are justifiable and appropriate.
c. The current-noncurrent classification of assets and liabilities is justifiable and significant.
d. All of these.

8. Charging off the cost of a wastebasket with an estimated useful life of 10 years as an expense of the period when purchased is an example of the application of the
a. consistency characteristic.
b. matching principle.
c. materiality constraint.
d. historical cost principle.

9. The basic accounting concept that refers to the tendency of accountants to resolve uncertainty in favor of understating assets and revenues and overstating liabilities and expenses is known as the
a. conservatism constraint.
b. materiality constraint.
c. substance over form principle.
d. industry practices constraint.

10. Allowing firms to estimate rather than physically count inventory at interim (quarterly) periods is an example of a trade-off between
a. verifiability and reliability.
b. reliability and comparability.
c. timeliness and verifiability.
d. neutrality and consistency.


11. The following information is available for Ace Company for 2004:
Disbursements for purchases $700,000
Increase in trade accounts payable 50,000
Decrease in merchandise inventory 20,000
Costs of goods sold for 2004 was
a. $770,000.
b. $730,000.
c. $670,000.
d. $630,000.

12. On September 1, 2003, Kile Co. issued a note payable to National Bank in the amount of $900,000, bearing interest at 12%, and payable in three equal annual principal payments of $300,000. On this date, the bank's prime rate was 11%. The first payment for interest and principal was made on September 1, 2004. At December 31, 2004, Kile should record accrued interest payable of
a. $36,000.
b. $33,000.
c. $24,000.
d. $22,000.

Use the following information for questions 13 through 15:
Poole Company paid or collected during 2004 the following items:
Insurance premiums paid $ 15,400
Interest collected 30,900
Salaries paid 135,200

The following balances have been excerpted from Poole's balance sheets:
December 31, 2004 December 31, 2003
Prepaid insurance $ 1,200 $ 1,500
Interest receivable 3,700 2,900
Salaries payable 12,300 10,600

13. The insurance expense on the income statement for 2004 was
a. $12,700.
b. $15,100.
c. $15,700.
d. $18,100.

14. The interest revenue on the income statement for 2004 was
a. $24,300.
b. $30,100.
c. $31,700.
d. $37,500.

15. The salary expense on the income statement for 2004 was
a. $112,300.
b. $133,500.
c. $136,900.
d. $158,100.

16. Forbes Company paid $7,200 on June 1, 2004 for a two-year insurance policy and recorded the entire amount as Insurance Expense. The December 31, 2004 adjusting entry is
a. debit Insurance Expense and credit Prepaid Insurance, $2,100.
b. debit Insurance Expense and credit Prepaid Insurance, $5,100.
c. debit Prepaid Insurance and credit Insurance Expense, $2,100
d. debit Prepaid Insurance and credit Insurance Expense, $5,100

17. An unearned revenue can best be described as an amount
a. collected and currently matched with expenses.
b. collected and not currently matched with expenses.
c. not collected and currently matched with expenses.
d. not collected and not currently matched with expenses

18. Which of these is generally an example of an extraordinary item?
a. Loss incurred because of a strike by employees.
b. Write-off of deferred marketing costs believed to have no future benefit.
c. Gain resulting from the devaluation of the U.S. dollar.
d. Gain resulting from the state exercising its right of eminent domain on a piece of land used as a parking lot.

19. When a company discontinues an operation and disposes of the discontinued operation (component), the transaction should be included in the income statement as a gain or loss on disposal reported as
a. a prior period adjustment.
b. an extraordinary item.
c. an amount after continuing operations and before extraordinary items.
d. a bulk sale of plant assets included in income from continuing operations.

20. Gross billings for merchandise sold by Otto Company to its customers last year amounted to $10,720,000; sales returns and allowances were $270,000, sales discounts were $175,000, and freight-out was $140,000. Net sales last year for Otto Company were
a. $10,720,000.
b. $10,450,000.
c. $10,275,000.
d. $10,135,000.

Use the following information for questions 21 through 23.

Falley Corp.'s trial balance of income statement accounts for the year ended December 31, 2004 included the following:
&nbs p; Debit Credit
Sales $280,000
Cost of sales $120,000
Administrative expenses 50,000
Loss on sale of equipment 18,000
Commissions to salespersons 20,000
Interest revenue 10,000
Freight-out 6,000
Loss due to fire damage 30,000
Bad debt expense 6,000
Totals $250,000 $290,000
Other information:
Falley's income tax rate is 30%. Finished goods inventory:
January 1, 2004 $160,000
December 31, 2004 140,000
On Falley 's multiple-step income statement for 2004,

21. Cost of goods manufactured is
a. $146,000.
b. $140,000.
c. $106,000.
d. $100,000.

22. Income before extraordinary item is
a. $70,000.
b. $40,000.
c. $49,000.
d. $28,000.

23. Extraordinary loss is
a. $21,000.
b. $30,000.
c. $33,600.
d. $48,000.

24. Which of the following is not an acceptable major asset classification?
a. Current assets
b. Long-term investments
c. Property, plant, and equipment
d. Deferred charges

25. Making and collecting loans and disposing of property, plant, and equipment are
a. operating activities.
b. investing activities.
c. financing activities.
d. liquidity activities.

26. In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?
a. Sale of equipment at book value
b. Sale of merchandise on credit
c. Declaration of a cash dividend
d. Issuance of bonds payable at a discount

Use the following information for questions 27 through 29.

The following trial balance of Rosen Corp. at December 31, 2004 has been properly adjusted except for the income tax expense adjustment.
Rosen Corp.
Trial Balance
December 31, 2004
&nbs p; Dr. Cr.
Cash $ 875,000
Accounts receivable (net) 2,695,000
Inventory 2,085,000
Property, plant, and equipment (net) 7,366,000
Accounts payable and accrued liabilities $ 1,501,000
Income taxes payable 654,000
Deferred income tax liability 85,000
Common stock 2,350,000
Additional paid-in capital 3,680,000
Retained earnings, 1/1/04 3,650,000
Net sales and other revenues 13,360,000
Costs and expenses 11,080,000
Income tax expenses 1,179,000
$25,280,000 $25,280,000

Other financial data for the year ended December 31, 2004:
• Included in accounts receivable is $800,000 due from a customer and payable in quarterly installments of $100,000. The last payment is due December 29, 2006.
• The balance in the Deferred Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $30,000 is classified as a current liability.
• During the year, estimated tax payments of $325,000 were charged to income tax expense. The current and future tax rate on all types of income is 30%.

In Rosen's December 31, 2004 balance sheet,

27. The current assets total is
a. $6,455,000.
b. $5,655,000.
c. $5,555,000.
d. $5,255,000.

28. The current liabilities total is
a. $1,860,000.
b. $1,915,000.
c. $2,185,000.
d. $2,240,000.

29. The final retained earnings balance is
a. $4,751,000.
b. $4,836,000.
c. $5,076,000.
d. $5,174,000.

30. If an annuity due and an ordinary annuity have the same number of equal payments and the same interest rates, then
a. the present value of the annuity due is less than the present value of the ordinary annuity.
b. the present value of the annuity due is greater than the present value of the ordinary annuity.
c. the future value of the annuity due is equal to the future value of the ordinary annuity.
d. the future value of the annuity due is less than the future value of the ordinary annuity.

Items 31 through 34 apply to the appropriate use of interest tables. Given below are the future value factors for 1 at 8% for one to five periods. Each of the items 31 to 34 is based on 8% interest compounded annually.
Periods Future Value of 1 at 8%
1 1.080
2 1.166
3 1.260
4 1.360
5 1.469

31. What amount should be deposited in a bank account today to grow to $30,000 three years from today?
a. $30,000 × 1.260
b. $30,000 × 1.260 × 3
c. $30,000 ÷ 1.260
d. $30,000 ÷ 1.080 × 3

32. If $10,000 is put in a savings account today, what amount will be available three years from today?
a. $10,000 ÷ 1.260
b. $10,000 × 1.260
c. $10,000 × 1.080 × 3
d. ($10,000 × 1.080) + ($10,000 × 1.166) + ($10,000 × 1.260)

33. What amount will be in a bank account three years from now if $5,000 is invested each year for four years with the first investment to be made today?
a. ($5,000 × 1.260) + ($5,000 × 1.166) + ($5,000 × 1.080) + $5,000
b. $5,000 × 1.360 × 4
c. ($5,000 × 1.080) + ($5,000 × 1.166) + ($5,000 × 1.260) + ($5,000 × 1.360)
d. $5,000 × 1.080 × 4

34. If $9,000 is put in a savings account today, what amount will be available six years from now?
a. $9,000 × 1.080 × 6
b. $9,000 × 1.080 × 1.469
c. $9,000 × 1.166 × 3
d. $9,000 × 1.260 × 2

35. Henson Company wishes to accumulate $500,000 by May 1, 2012 by making 8 equal annual deposits beginning May 1, 2004 to a fund paying 8% interest compounded annually. What is the required amount of each deposit?
a. $87,008
b. $47,007
c. $43,525
d. $50,390

36. The market price of a $600,000, ten-year, 12% (pays interest semiannually) bond issue sold to yield an effective rate of 10% is
a. $673,734.
b. $674,774.
c. $679,962.
d. $1,123,416.

37. In accounting for a long-term construction-type contract using the percentage-of-completion method, the gross profit recognized during the first year would be the estimated total gross profit from the contract, multiplied by the percentage of the costs incurred during the year to the
a. total costs incurred to date.
b. total estimated cost.
c. unbilled portion of the contract price.
d. total contract price.

38. Winser, Inc. is engaged in extensive exploration for water in Utah. If, upon discovery of water, Winser does not recognize any revenue from water sales until the sales exceed the costs of exploration, the basis of revenue recognition being employed is the
a. production basis.
b. cash (or collection) basis.
c. sales (or accrual) basis.
d. cost recovery basis.

39. The installment-sales method of recognizing profit for accounting purposes is acceptable if
a. collections in the year of sale do not exceed 30% of the total sales price.
b. an unrealized profit account is credited.
c. collection of the sales price is not reasonably assured.
d. the method is consistently used for all sales of similar merchandise

40. Which of the following post-balance sheet events would generally require disclosure, but no adjustment of the financial statements?
a. Retirement of the company president
b. Settlement of litigation when the event that gave rise to the litigation occurred prior to the balance sheet date.
c. Employee strikes
d. Issue of a large amount of capital stock

41. Cash, short-term marketable securities, and net receivables are the numerator for
Acid-Test Ratio Current Ratio
a. Yes No
b. Yes Yes
c. No No
d No Yes

42. The basic limitations associated with ratio analysis include
a. the lack of comparability among firms in a given industry.
b. the use of estimated items in accounting.
c. the use of historical costs in accounting.
d. all of these.

43. Which of the following should be disclosed in a Summary of Significant Accounting Policies?
a. Types of executory contracts
b. Amount for cumulative effect of change in accounting principle
c. Claims of equity holders
d. Depreciation method followed
Submitted: 4 years ago.
Category: Finance
Expert:  Falak Naz replied 4 years ago.

WELCOME TO JUST ANSWER

 

 

when is your deadline?

Customer: replied 4 years ago.
tomorrow, 2pm est
Expert:  Manal Elkhoshkhany replied 4 years ago.

Hello nburgos and welcome to Just Answer

 

Please click here for the solutions

 

Kindly advise the name of the book you are using: Title, author's name, and edition

 

 

Thank you

Expert:  CPA Cindy replied 4 years ago.

It looks like some of the answers aren't bolded (21-43) , so here are the additional answers. I'm new to this process and wasn't sure how to provide without answering the full question. My apologies if I've done anything incorrectly.

 

Hope this helps:

 

1) c

2) d

3) b

4) CAN'T TELL WITH FORMATTING, BUT HIGHEST LEVEL (NOT GIVING AFFECT TO CODIFICATION) ARE FASB STMTS AND INTERPRETATIONS, APB OPINIONS AND AICPA ACCOUNTING RESEARCH BULLETINS

5) a

6) d

7) d

8) c

9) a

10) c

11) a

12) c

13) b

14) b

15) b

16) d

17) b

18) d

19) c

20) c

21) b

22) c

23) a

24) a

25) b

26) a

27) d

28) c

29) a

30) b

31) c

32) b

33) a

34) b

35) c

36) b

37) b

38) d

39) c

40) d

41) a

42) d

43) d

 

 

Cindy

Customer: replied 4 years ago.
Cindy:

I am very inclined to accept your answers, but could yo. Let me know what source you used to answer these? I am a bit apprehensive about this since it is my first time using it. However, I have compared some of your answers to the ones I have completed research on and I see they Are correct.. Please advise.
Expert:  Manal Elkhoshkhany replied 4 years ago.

Waiting for a reply

 

Thank you



Edited by BusinessTutor on 1/11/2010 at 6:03 PM EST
Expert:  CPA Cindy replied 4 years ago.

I researched when responding to a previous post. I did not have the answer key from the actual text book if that is what you are asking. Let me know if you have concerns on any of the specific questions and I can provide information on where researched. Thanks.

 

Cindy

Expert:  Manal Elkhoshkhany replied 4 years ago.

Hello nburgos

 

I apologize for the confusion we must have caused. As I have been involved in the question, the other expert should have not posted a response in the first place, but since she did and I disagree with some of them (I still am reviewing & redoing the ones I have missed). You are free to accept the other expert's solutions if you are convinced, but I still would keep on reworking them. I am not sure when your deadline is so I cannot ask you to wait as I will not be able to repost the answers tonight. I am reworking the questions and typing the calculations so that you are sure of the solution, but I want to be fair to you, myself and the other expert. Until now I found 3 mistakes in the other expert's answer, but I will not be able to repost mine until tomorrow at noon. So if you can wait until tomorrow, then I recommend that you do wait until I post my solutions.

 

Thank you

Expert:  CPA Cindy replied 4 years ago.

Please advise as to what mistakes you have found. These answers were looked at by partners at two Big 4 accounting firms so I would like to pass on your feedback.

 

I apologize if I did something improperly but I knew that this individual had a deadline and I didn't want to leave them hanging.

CPA Cindy, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 57
Experience: 15 years in public accounting (Big 4)
CPA Cindy and 5 other Finance Specialists are ready to help you
Expert:  Manal Elkhoshkhany replied 4 years ago.

Hello

 

Please note that numbers: 4, 5, 13, 14, 15, 21, 28, & 29 are not correct. nburgos, please advise when you get your grade

 

Thank you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
< Last | Next >
  • http://ww2.justanswer.com/uploads/RA/rakhi.v/2012-7-3_14374_RakhiVasavadaL.64x64.jpeg Rakhi Vasavada's Avatar

    Rakhi Vasavada

    Financial and Legal Consultant

    Satisfied Customers:

    2073
    Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    1890
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    1755
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg JKCPA's Avatar

    JKCPA

    CPA

    Satisfied Customers:

    838
    Bachelors degree and CPA with Accounting experience.
  • http://ww2.justanswer.com/uploads/starside8/2010-2-16_55433_DSCN1175.JPG Eric's Avatar

    Eric

    Financial Manager

    Satisfied Customers:

    558
    Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.
  • http://ww2.justanswer.com/uploads/FA/fastfile/2011-12-15_23139_Klein2011small.64x64.jpg R. Klein, EA's Avatar

    R. Klein, EA

    Accountant

    Satisfied Customers:

    397
    Intuit Ask a Tax Expert. QuickBooks Certified Pro Advisor (all editions)
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    324
    NASD Licensed Rep, 1997-2001, Business Attorney