Advance Accounting Exam
1. When the parent company sells a portion of its investment in a subsidiary, the workpaper entry to adjust for the current year’s income sold to noncontrolling stockholders includes a (Points : 10)
2. The purchase by a subsidiary of some of its shares from noncontrolling stockholders results in the parent company’s share of the subsidiary’s net assets (Points : 10)
3. The purchase by a subsidiary of some of its shares from the noncontrolling stockholders results in an increase in the parent’s percentage interest in the subsidiary. The parent company’s share of the subsidiary’s net assets will increase if the shares are purchased: (Points : 10)
4. Which statement with respect to gains and losses on troubled debt restructuring is correct? (Points : 10)
5. A composition agreement is an agreement between the debtor and its creditors whereby the creditors agree to: (Points : 10)
6. Assets transferred by the debtor to a creditor to settle a debt are transferred at: (Points : 10)
7. In a troubled debt restructuring involving a modification of terms, the debtor’s gain on restructuring: (Points : 10)
8. The major difference between IFRS and US GAAP in accounting for inventories is that (Points : 10)
9. Accounting under IFRS and US GAAP is similar for all of the following topics except (Points : 10)
10. One difference between IFRS and GAAP in valuing inventories is that (Points : 10)
11. Accounting terminology that differs between IFRS and US GAAP include all of the following except (Points : 10)
12. A discount or premium on a forward contract is deferred and included in the measurement of the related foreign currency transaction if the contract is classified as a: (Points : 10)
13. The forward exchange rate quoted for the remaining term of a forward contract is used to account for the contract when the forward contract: (Points : 10)
14. A transaction gain or loss is reported currently in the determination of income if the purpose of the forward contract is to: (Points : 10)
15. An indirect exchange rate quotation is one in which the exchange rate is quoted: (Points : 10)
16. If the functional currency is determined to be the U.S. dollar and its financial statements are prepared in the local currency, SFAS 52, requires which of the following procedures to be followed? (Points : 10)
17. When the functional currency is identified as the U.S. dollar, land purchased by a foreign subsidiary after the controlling interest was acquired by the parent company should be translated using the: (Points : 10)
18. The process of translating the accounts of a foreign entity into its functional currency when they are stated in another currency is called: (Points : 10)
19. In considering interim financial reporting, how did the Accounting Principles Board conclude that each reporting should be viewed? (Points : 10)
20. Current authoritative pronouncements require the disclosure of segment information when certain criteria are met. Which of the following reflects the type of firm and type of financial statement for which this disclosure is required? (Points : 10)
21. If annual major repairs made in the first quarter and paid for in the second quarter clearly benefit the entire year, when should they be expensed? (Points : 10)
22. During the second quarter of 2011, Dodge Company sold a piece of equipment at a gain of $90,000. What portion of the gain should Dodge report in its income statement for the second quarter of 2011? (Points : 10)
23. Pete, Joe, and Ron are partners with capital balances of $135,000, $90,000, and $60,000, respectively. The partners share profits and losses equally. For an investment of $120,000 cash, Jerry is to be admitted as a partner with a one-fourth interest in capital and profits. Based on this information, the amount of Jerry’s investment can best be justified by which of the following? (Points : 10)
24. Bob and Fred form a partnership and agree to share profits in a 2 to 1 ratio. During the first year of operation, the partnership incurs a $20,000 loss. The partners should share the losses (Points : 10)
25. In a partnership, interest on capital investment is accounted for as a(n) (Points : 10)
26. The profit and loss sharing ratio should be (Points : 10)
27. During the liquidation of the partnership of Karr, Rice, and Long. Karr accepts, in partial settlement of his interest, a machine with a cost to the partnership of $150,000, accumulated depreciation of $70,000, and a current fair value of $110,000. The partners share net income and loss equally. The net debit to Karr's account (including any gain or loss on disposal of the machine) is (Points : 10)
28. A schedule prepared each time cash is to be distributed is called a(n) (Points : 10)
29. Offsetting a partner's loan balance against his debit capital balance is referred to as the (Points : 10)
30. If a partner with a debit capital balance during liquidation is personally solvent, the (Points : 10)
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