Chapter 14Investments in Debt and Equity Securities
1. Which category includes only debt securities?
a. Held-to-maturity securities
b. Available-for-sale securities
c. Marketable equity securities
d. Trading securities
Chapter 3The Balance Sheet and Notes to the Financial Statements
1. Analysis of a firms balance sheet provides information on its liquidity, which is the ability to
a. satisfy short-term obligations.
b. maintain profitable operations.
1. Which of the following statements characterizes an operating lease?
a. The lessee records depreciation and interest.
b. The lessee records the lease obligation related to the leased asset.
c. The lessor records deprecia
Chapter 19Derivatives, Contingencies, Business Segments, and Interim Reports
1. Uncertainty about the future market value of an asset is referred to as
a. price risk.
b. credit risk.
c. interest rate risk.
d. exchange rate risk.
Chapter 18Earnings Per Share
1. When computing earnings per share on common stock, dividends on cumulative, nonconvertible preferred stock should be
a. deducted from net income only if the dividends were declared or paid in the current per
Chapter 17Employee Compensation-Payroll, Pensions, & Other Comp. Issues
1. Each full-time employee of Hydroponics Greenhouse is entitled to ten paid sick days each year. The
sick pay is not vested, but any unused sick days can be carried o
Chapter 16Income Taxes
1. The purpose of an interperiod income tax allocation is to
a. allow reporting entities to fully utilize tax losses carried forward from a previous year.
b. allow reporting entities whose tax liabilities vary signif
Chapter 13Equity Financing
1. Which of the following features of preferred stock would most likely be opposed by common shareholders?
a. Par or stated value
TOP: AICPA FN-Measurement
Chapter 12Debt Financing
1. The most conceptually appropriate method of valuing a liability under the historical cost basis is to
a. discount the amount of expected cash outflows that are necessary to liquidate the liability
using the mark
Chapter 11Investments in Noncurrent Operating Assets-Utilization and Retirement
1. The sum-of-the-years'-digits method of depreciation is being used for a machine with a five-year estimated useful life. What would be the fraction applied t
Chapter 10Investments in Noncurrent Operating Assets-Acquisition
1. On-Call Service Corporation bought a building lot to construct a new corporate office building. An
older home on the building lot was razed immediately so that the office
Chapter 9Inventory and Cost of Goods Sold
1. Which of the following describes the flow of product costs through the inventory accounts of a manufacturer?
a. Raw materials, goods in process, factory overhead, finished goods
b. Raw materials
Chapter 8Revenue Recognition
1. Which of the following best describes the condition(s) that must be present for the recognition of revenue?
a. The revenue must be earned, measurable, and collected.
b. The revenue must be earned and collect
Chapter 7The Revenue/Receivables/Cash Cycle
1. Which of the following is NOT correct?
a. The operating cycle sometimes is longer than one year in duration.
b. The operating cycle always is one year in duration.
c. The operating cycle somet
Chapter 6Earnings Management
1. A Company showed a large restructuring charge on its income statement in 2014 and has experienced
a constantly rising earnings trend since that time. This would most nearly represent an example of
Chapter 5Statement of Cash Flows and Articulation
1. In a statement of cash flows, payments to acquire debt instruments of other entities would typically be
classified as cash outflows for
a. financing activities.
b. equity activities.
Chapter 4The Income Statement
1. The transaction approach to determining income is a concept in which
a. income is measured as the amount that an entity could consume during a period and be as
well off at the end of that period as it was a
Chapter 2A Review of the Accounting Cycle
1. In an accrual accounting system,
a. all accounts have normal debit balances.
b. a debit entry is recorded on the left-hand side of an account.
c. liabilities, owner's capital, and dividends all
Chapter 1Financial Reporting
1. The following is NOT a major component of the financial statements:
a. auditors opinion
b. annual report
c. explanatory notes
d. balance sheet
TOP: AICPA FN-Reporting
OBJ: LO 1