A C323 Chapter 18
1.In selecting an accounting method for a newly contracted long-term construction project, the principal factor to be considered should be
a) the terms of payment in the contract
b) the inherent nature of the contractors technical facili
All of the following involve counterbalancing errors except the
a) understatement of inventory
b) failure to record prepaid expenses
c) overstatement of purchases
d) failure to adjust for bad debts
Mazzeo Inc. is a calendar-year corporation. Its fin
The full disclosure principle, as adopted by the accounting profession, is best described by which of the following?
a) Information about each account balance appearing in the financial statepemts is to be included in the notes to
the financial stateme
Income tax expense is based on
a) pretax income
b) operating income
c) taxable income
d) income from continuing operations
A deferred tax liability represents the
a) decrease in taxes saved in future years as a result of
The interest on the projected benefit obligation component of pension expense
a) reflects the incremental borrowing rate of the employer.
b) reflects the rates at which pension benefits could be effectively settled.
c) is the same as the expected retur
1. Lease 1 does not contain a bargain purchase option, but the lease term is equal to 90
percent of the estimated economic life of the leased property. Lease 2 does not
transfer ownership of the property to the lessee by the end of the lease term, but the
Rick Kleckner Corporation recorded a capital lease at $263,270 on January 1, 2012. The interest rate is 15%. Kleckner
Corporation made the first lease payment of $55,026 on January 1, 2012. The lease requires 7 annual payments. The
equipment has a usef
Of the following questions, which one would not be answered by the statement of cash flows?
a) What was the cash used for during the period?
b) Were all the cash expenditures of benefit to the company during the period?
c) What was the change in the ca