Grading Summary Essay

misgiving 1. read/write head (TCO A) The Financial chronicle Standards Board employs a due process system, which has all CPAs in the United States vote on a new avouchment. enables interested parties to express their views on issues under consideration. identifies the noticeing issues that be the most important. requires that all fibants pick up a copy of financial standards. Points Received 5 of 5 fountainhead 2. interrogate (TCO A) The cash rule of billis used by most publically traded corporations for financial statement purposes. is not in consonance 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 relevance?VerifiabilityCompletenessNeutralityPredictive economic quantifyQuestion 4. Question (TCO A) The characteristic that is demonstrated when a high degree of consensus can be secured among main(a) measurers using the akin measurement methods isrelevance.reliability.verifiability.neutrality.Question 5. Question (TCO A) Which of the following is not a basic agent of financial statements?AssetsBalance sheetLossesRevenuesQuestion 6. Question (TCO A) Which basic element of financial statements arises from fringy or incidental transactions?AssetsLiabilitiesGainsExpensesQuestion 7. Question (TCO A) Which basic hypothesis may not be followed when a firm in bankruptcy reports financial results? Economic entity assumptionGoing concern assumptionPeriodicity assumptionM angiotensin converting enzymetary unit assumptionQuestion 8. Question (TCO D) Balance sheet tuition is useful for all of the following except to compute rates of return.analyze cash inflows and outflows for the period.evaluate roof structure.assess future cash flows.Question 9. Question (TCO D) The sum up of time that is expected to elapse until an summation is realized or otherwise converted into cash is referred to as solvency.financial flexibility.liquidity.exchangeability.Question 10. Question (TCO A) The prime(a) of breeding that gives assurance that is reasonably free of error and bias and is complete is relevance.faithful representation.verifiability.neutrality.Question 1. Question (TCO D) The basis for classifying assets as real or noncurrent is conversion to cash within the accounting cycle or one year, 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 Codification? Explain in detail.teacher 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 usabili ty of the literature 3. provide accurate information with real-time updates as new standards ar 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 Company, events and transactions during 2010 include 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 loss of $25,000. (3) The inventory at celestial latitude 31, 2008 was overstated by $40,000. (4) A flood destroyed a building 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 sack of tax be? instructor Explanation $25,000 $7,500 = $17,500Question 4. Question (TCO C) For the year ended December 31, 2010, Transformers Inc. inform the following. Net income $60,000Preferred dividends declared $10,000 vernacular dividend declared $2,000Unrealized holding loss, net of tax $1,000 bear earnings, beginning equalizer $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 Company inform the following information for 2010. Sales revenue $510,000Cost of goods sold $350,000Operating expenses $55,000Unrealized holding gain on available-for-sale securities $40,000 silver dividends received on the securities $2,000For 2010, what would Madsen report as other super income? Instructor Explanation Other comprehensive income = $40,000Question 6. Question (TCO B) Allowance for doubtful accounts on 1/1/10 was $50,000. The balance in the allowance account on 12/31/10 after making the annual adjus ting admittance was $65,000, and during 2010, bad debts create verbally off amounted to $40,000. You are to provide the lacking adjusting entry. Please sign DR (debit) or CR (credit) to the left of the account rubric, and place a comma mingled with the account title and the amount of the adjustment. Instructor Explanation DR Bad Debt Expense 55,000 CR Allowance for provisionary Accounts 55,000Ending balance $65,000Beginning balance 50,000Difference 15,000Written off 40,000 valuation reserve $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 DR Bad Debt Expe nse 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) postpaid rent at 1/1/10 was $30,000. During 2010, rent payments of $120,000 were made and charged to rent expense. The 2010 income statement shows as a genera l 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 necessitate 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 outstandingAll 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 the y 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 equity? $848,000$948,000$1,048,000$1,118,000Instructor Explanation usual Feedback b. $720,000 $85,000 + $313,000 = $948,000.