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1. Recognition of tax benefits in the loss year due to a loss

Customer Question
carryforward requires Answer the establishment of a...
1. Recognition of tax benefits in the loss year due to a loss carryforward requires
Answer

the establishment of a deferred tax liability.
the establishment of a deferred tax asset.
the establishment of an income tax refund receivable.
only a note to the financial statements.

2. The fair value option allows a company to
Answer

value its own liabilities at fair value.
record income when the fair value of its bonds increases.
report most financial instruments at fair value by recording gains and losses as a separate component of stockholders' equity.
All of the above are true of the fair value option.

3.Watt Co. purchased $300,000 of bonds for $315,000. If Watt intends to hold the securities to maturity, the entry to record the investment includes
Answer

a debit to Held-to-Maturity Securities at $300,000.
a credit to Premium on Investments of $15,000.
a debit to Held-to-Maturity Securities at $315,000.
none of these.
4. How should earned but unbilled revenues at the balance sheet date on a long-term construction contract be disclosed if the percentage-of-completion method of revenue recognition is used?
Answer

As construction in process in the current asset section of the balance sheet.
As construction in process in the noncurrent asset section of the balance sheet.
As a receivable in the noncurrent asset section of the balance sheet.
In a note to the financial statements until the customer is formally billed for the portion of work completed.

5.With regard to uncertain tax positions, the FASB requires that companies recognize a tax benefit when
Answer

it is probable and can be reasonably estimated.
there is at least a 51% probability that the uncertain tax position will be approved by the taxing authorities.
it is more likely than not that the tax position will be sustained upon audit.
Any of the above exist.

6. Yeager Co. maintains a defined-benefit pension plan for its employees. At each balance sheet date, Yeager should report a pension asset / liability equal to the
Answer

accumulated benefit obligation.
projected benefit obligation.
accumulated benefit obligation.
funded status relative to the projected benefit obligation.

7. In accounting for investments in debt securities that are classified as trading securities,
Answer

a discount is reported separately.
a premium is reported separately.
any discount or premium is not amortized.
none of these.
Submitted: 7 years ago.Category: Finance
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Answered in 39 minutes by:
10/22/2010
Financial Professional: JKCPA, CPA replied 7 years ago
JKCPA
JKCPA, CPA
Category: Finance
Satisfied Customers: 5,884
Experience: Bachelors degree and CPA with Accounting experience.
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Hello Customer,

 

Thanks for your questions. The answers are:

 

1. the establishment of a deferred tax asset.

2. value its own liabilities at fair value.

3. a debit to Held-to-Maturity Securities at $315,000.

4. As construction in process in the current asset section of the balance sheet.

5. it is more likely than not that the tax position will be sustained upon audit.

6. status relative to the projected benefit obligation.

7. any discount or premium is not amortized.

 

Hope this helps!

 

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JKCPA
JKCPA, CPA
Category: Finance
Satisfied Customers: 5,884
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