303final

303final - Intermediate Accounting III ACCTG 303 Section A...

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Intermediate Accounting III ACCTG 303 Section A Winter 2005 Instructor J.B. Paperman Final Exam March 14, 2005 Name: ____________________________ INSTRUCTIONS: a) This exam is closed book. You may use three double-sided sheets of notes. You may use a calculator to assist in computations. b) You must complete this exam on your own. No assistance is allowed except that provided by the instructor. c) If you feel there is ambiguity in a problem, state your assumptions clearly. d) The exam has 17 pages in total and 16 questions with 100 points. 1
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Multiple Choice (3 points each) – Circle the MOST correct answer 1. Proceeds from an issue of debt securities having stock warrants should NOT be allocated between debt and equity features when a. the market value of the warrants is not readily available. b. exercise of the warrants within the next few fiscal periods seems remote. c. the allocation would result in a discount on the debt security. d. the warrants issued with the debt securities are nondetachable. 2. Interperiod income tax allocation causes a. tax expense shown on the income statement to equal the amount of income taxes payable for the current year plus or minus the change in the deferred tax asset or liability balances for the year. b. tax expense shown in the income statement to bear a normal relation to the tax liability. c. tax liability shown in the balance sheet to bear a normal relation to the income before tax reported in the income statement. d. tax expense in the income statement to be presented with the specific revenues causing the tax. 3. Accounting changes are often made and the monetary impact is reflected in the financial statements of a company even though, in theory, this may be a violation of the accounting concept of a. materiality. b. consistency. c. conservatism. d. objectivity. 4. A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change should include a a. debit to Accumulated Depreciation. b. credit to Retained Earnings in the amount of the difference on prior years. c. credit to Deferred Tax Asset. d. debit to Deferred Tax Liability. 2
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5. Stone Company changed its method of pricing inventories from FIFO to LIFO. What type of accounting change does this represent? a. A change in accounting estimate for which the financial statements for the prior periods included for comparative purposes should be presented as previously reported. b. A change in accounting principle for which the financial statements for prior periods included for comparative purposes should be presented as previously reported. c. A change in accounting estimate for which the financial statements for prior periods included for comparative purposes should be restated. d. A change in accounting principle for which the financial
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303final - Intermediate Accounting III ACCTG 303 Section A...

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