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Unformatted text preview: Please Note: It is recommended that you save your response as you complete each question. Question 1 (2 points) Which of the following is not treated as a change in accounting principle? A) A change from LIFO to FIFO for inventory valuation B) A change to a different method of depreciation for plant assets C) A change from full-cost to successful efforts in the extractive industry D) A change from completed-contract to percentage-of-completion Save Question 2 (2 points) 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) credit to Accumulated Depreciation. B) debit to Retained Earnings in the amount of the difference on prior years. C) debit to Deferred Tax Asset. D) credit to Deferred Tax Liability. Save Question 3 (2 points) Revenue of a segment includes A) only sales to unaffiliated customers. B) sales to unaffiliated customers and intersegment sales. C) sales to unaffiliated customers and interest revenue. D) sales to unaffiliated customers and other revenue and gains. Save Question 4 (2 points) Errors and irregularities are defined as intentional distortions of facts. Errors Irregularities A) Yes Yes B) Yes No C) No Yes D) No No Save Question 5 (2 points) Link Co. purchased machinery that cost $810,000 on January 4, 2009. The entire cost was recorded as an expense. The machinery has a nine-year life and a $54,000 residual value. The error was discovered on December 20, 2011. Ignore income tax considerations. Link's income statement for the year ended December 31, 2011, should show the cumulative effect of this error in the amount of A) $726,000. B) $642,000. C) $558,000. D) $0. Save Question 6 (2 points) Which of the following is an advantage of leasing? A) Off-balance-sheet financing B) Less costly financing C) 100% financing at fixed rates D) All of these Save Question 7 (2 points) In considering interim financial reporting, how does the profession conclude that such reporting should be viewed? A) As a "special" type of reporting that need not follow generally accepted accounting principles....
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This note was uploaded on 12/06/2010 for the course ACCT 311 taught by Professor Schmidt during the Spring '10 term at Northern State University.
- Spring '10