17 Interactive Quiz A

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Interactive Quiz A http://highered.mcgraw-hill.com/sites/0072996536/student_view0/chapter17/interactive_quiz_a.html[6/22/2010 7:01:10 PM] Interactive Quiz A (See related pages) Results Reporter Out of 29 questions, you answered 9 correctly with a final grade of 31% 9 correct (31%) 19 incorrect (66%) 1 unanswered (3%) Your Results: The correct answer for each question is indicated by a . 1 CORRECT A company is presenting five years worth of comparative financial statements from 2001 through 2005. In the years 2001 and 2002 the company used the LIFO method of costing its inventory. Then, at the beginning of 2003 it switched to the FIFO method which it used for all of 2003, 2004, and 2005. If the company leaves its financial statements as they were originally prepared, it has violated which of the following principles? A) The historical cost principle B) The monetary unit principle C) The entity principle D) The conservatism principle E) The consistency principle Feedback: The company will have violated the consistency principle. A2 2 INCORRECT Which of the following is an extraordinary item? A) The complete destruction of a company's warehouse by fire B) Hurricane damage in Florida which destroys a fruit grower's fruit orchards C) A court-determined settlement paid by a company because it lost a product liability lawsuit filed against it D) A gain on the sale of machinery used in the company's factory E) A loss on the sale of the company's cars used by its sales force to make calls on the company's customers Feedback: The only event which fits the definition of being an extraordinary item is the loss due to fire. A2 3 CORRECT Which of the following group or groups of people are not considered to be the external users of accounting information? A) The Internal Revenue Service B) The bank loan officer C) The corporation's shareholders D) The firm's customer base E) The internal auditors Feedback: From the list given, only the internal auditors are not considered to be external users of the firm's financial statements. C1 4 CORRECT Which one of the following pieces of company data would not normally be available to the general public? A) The general purpose financial statements B) The Form 10-K filed with the SEC C) Press releases D) The external auditor's report E) The monthly budgets prepared by the controller's office for use by the company's vice-presidents Feedback: The one piece of data that is not generally available to the public would be the monthly budgets prepared by the controller's office for use by the company's vice-presidents. C2 5 CORRECT When interpreting the general purpose financial statements of a company, which of the following items could be used as benchmarks for comparison: A) The previously published financial statements of the same company B) The previously published and current general purpose financial statements of companies that are direct competitors of our company Course-wide Content MH Enhanced Cartridge Sample Study Guide
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17 Interactive Quiz A - Interactive Quiz A Home >...

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