Question

Assuming a proprietorship, partnership, and corporation earns equal amount of income and it is distributed evenly among owners, the amount collected by government toward tax will be:

Select one:
a. highest for proprietorship.
b. highest for corporation.
c. least for partnership.
d. highest for partnership.
e. equal for all three entities.

Foster Company acquired Robert Corporation for $10 million on January 1, 2011. Included in this amount was goodwill of $500,000. Which of the following is true of consolidated statements prepared as of December 31, 2011?
Select one:
a. The amount of goodwill reported may still be $500,000, but it also may be less than it if any impairment has occurred.
b. The amount of goodwill will be reported at $500,000 throughout the life of Foster Company even if impairment has occurred.
c. The amount of goodwill reported would be less than $500,000 because of amortization.
d. Goodwill will still be reported at $500,000 less any beginning balance.
e. The amount of goodwill reported may be more than $500,000 if Robert has had a profitable year.
Question 22

The communication of financial information within an organization so that internal decisions can be made in an appropriate manner is known as:
Select one:
a. managerial accounting.
b. financial accounting.
c. cost analysis.
d. tax accounting.
e. information analysis.
Question 23

Under an operating lease:
Select one:
a. all lease payments are ordinary annuities.
b. the lease transaction is reported more like a purchase.
c. the initial liability recognized is equal to the present value of all the lease payments.
d. the leased asset is depreciated by the lessee over its useful life.
e. the lessee does not obtain substantially all the benefits and risks of ownership.
Question 24

Speers Corporation owns 40% of Queens Company, which Speers originally purchased at the beginning of the year for $300,000. Queens earned $30,000 income for the year and distributed dividends of $5,000. If this investment is accounted for by means of the equity method, it should be reported on a year-end balance sheet at:
Select one:
a. $300,000.
b. $325,000.
c. $312,000.
d. $330,000.
e. $310,000.
Question 25

Who pays auditor's remuneration?
Select one:
a. The group of investors and creditors
b. The SEC
c. The AICPA
d. The PCAOB
e. The reporting company
Question 26

Which of the following factors lead auditors to provide only reasonable assurance?
Select one:
a. Ambiguous U.S.GAAP guidelines
b. Change in total assets by more than 10%
c. Use of estimates
d. Separation of accounting and custody of assets
e. Different financial year and calendar year end
Question 27

The Financial Accounting Standards Board (FASB) is:
Select one:
a. a governmental organization.
b. responsible for amending present accounting rules, but doesn't have the right to pass new rules.
c. an independent group supported by the U.S. government, various accounting organizations, and many private businesses.
d. in charge of the creation of IFRS.
e. against the switching of financial reporting from U.S GAAP to IFRS in United States.
Question 28

The Big Four Public Accounting Firms includes:
Select one:
a. Arthur Andersen
b. McGladrey & Pullen
c. PricewaterhouseCoopers
d. Grant Thornton
e. BDO Seidman
Question 29

Hercules Company purchased land and a building for $350,000. The fair value of the land was $240,000 and the fair value of the building was $160,000. Determine the amount at which Hercules will record the building.
Select one:
a. $350,000
b. $140,000
c. $160,000
d. $240000
e. $210,000
Question 30

Who is responsible for the development of effective internal control systems in a company?
Select one:
a. The government
b. The management
c. The auditor
d. The stockholders
e. The creditors

Question 31
Question text
Lira Company reported the following account balances on its income statement: cost of goods sold¡ª$320,000, rent expense¡ª$30,000, and salary expense¡ª$90,000. During the year, prepaid rent went up by $5,000, accounts payable went down by $4,000, salary payable went up by $3,000, and inventory went down by $2,000. Determine the amount of cash paid for rent.
Select one:
a. $30,000
b. $35,000
c. $31,000
d. $25,000
e. $28,000
Question 32

Question text
Boston Company pays salaries of $2,000 to employees. No accrual has been made for this amount. Which of the following is true of this transaction?
Select one:
a. Salaries Expense increases by $2,000; Cash decreases by $2,000
b. Salaries Expense increases by $2,000; Salaries Payable decreases by $2,000
c. Cash decreases by $2,000; Salaries Expense decreases by $2,000
d. Cash decreases by $2,000; Salaries Payable increases by $2,000
e. Cash increases by $2,000; Salaries Payable decreases by $2,000
Question 33

Question text
Gershwin Corporation issues $100,000 in 2-year zero-coupon bonds with a negotiated interest rate of 5%. If Gershwin uses the effective interest rate method, which of the following is the interest expense Gershwin will accrue for the bonds at the end of Year Two?
Select one:
a. $4,500
b. $4,673
c. $4,535
d. $4,762
e. $5,000
Question 34

Question text
Tydings Corporation is being sued by a former employee. Tydings' lawyer believes that the chance of loss is remote. Which of the following is true of reporting this contingent loss?
Select one:
a. The loss should be reported in the statement of cash flows.
b. The loss should be reported on the balance sheet.
c. The loss should be disclosed in the notes to the financial statements.
d. The loss should be reported on the income statement..
e. The loss should not be reported.
Question 35

Question text
In October, Janus Corporation received a payment in advance from a customer for work to be performed in November. To record this, Janus' accountant debited Cash and credited Revenue. Which of the following is true?
Select one:
a. Cash is understated
b. Liabilities are understated
c. Unearned revenue is overstated
d. Revenue is understated
e. Assets are overstated
Question 36

Question text
Janus Corporation purchases all of the outstanding stock of Paula Company for $500,000. The net assets of Paula have a fair value of $350,000 which includes a copyright with a book value of $6,000 and a fair value of $80,000. Determine the amount of goodwill to be reported on consolidated financial statements on the date of purchase?
Select one:
a. $150,000
b. $70,000
c. $156,000
d. $74,000
e. $144,000
Question 37

Question text
If a company pays for inventory previously acquired on account::
Select one:
a. Unearned Revenue should be debited.
b. Accounts Payable should be debited.
c. Cash should be debited.
d. Cost of Goods Sold should be credited.
e. Inventory should be credited.
Question 38

Question text
On January 1, 2013, Opie Corporation issues $200,000 in term bonds with a stated rate of interest of 7% and an effective rate of interest of 8%. The term of the bonds is 6 years and interest is paid every June 30 and December 31. Determine the balance in the Bonds Payable account on June 30, 2013.
Select one:
a. $190,000
b. $200,000
c. $190,615
d. $191,889
e. $191,240
Question 39

Question text
Andrew Company uses the indirect method to determine its cash flows from operating activities. Andrew reported net income of $300,000 for the year. Depreciation expense is $30,000 and gain on sale of equipment is $50,000. Determine the amount of cash generated by operating activities?
Select one:
a. $220,000
b. $320,000
c. $330,000
d. $280,000
e. $380,000
Question 40

After the temporary accounts are closed at year's end, the resulting single figure will be equal to:
Select one:
a. net income reported for the year.
b. ending retained earning balance of the current year.
c. beginning retained earning balance of the forthcoming year.
d. beginning stockholder's equity balance of the forthcoming year.
e. total cash flow for the current year.

Question 41

Question text
Xander Company began the year with $100,000 in inventory and $210,000 in accounts payable. During the year, Xander incurred cost of goods sold of $1,200,000. Xander ended the year with $105,000 in inventory and $200,000 in accounts payable. How much cash did Xander pay for purchases during the year?
Select one:
a. $1,195,000
b. $1,200,000
c. $1,215,000
d. $1,210,000
e. $1,205,000
Question 42

Question text
Which of the following is a financial statement produced by companies?
Select one:
a. Expense statement
b. Statement of gross Income
c. Tax statement
d. Statement of cash flows
e. Assessment sheet
Question 43

Question text
Contingent gains are reported:
Select one:
a. as assets in the balance sheet.
b. when the amount of the gain can be reasonably estimated.
c. when it is probable.
d. in the notes to the financial statement.
e. when the gain actually occurs.
Question 44

Question text
Hyena Corporation pays $700,000 to acquire Quinton Company. Quinton has two assets. The first is a building with a book value of $200,000 and a fair value of $300,000. The second is a patent with a book value of $10,000 and a fair value of $250,000. Assume the company had no liabilities. What amount is reported as goodwill as part of this sale?
Select one:
a. $250,000
b. $390,000
c. $150,000
d. $490,000
e. $700,000
Question 45

Question text
Which of the following is true about consolidated financial statements prepared on the date of acquisition of a subsidiary?
Select one:
a. The parent company reports an investment in subsidiary separately on its balance sheet.
b. The subsidiary's revenues and expenses from the entire year are included.
c. If a parent company owns less than 100% of a subsidiary, it can only consolidate the percentage of assets and liabilities that it owns.
d. The subsidiary's assets and liabilities are reported at their historical cost.
e. Goodwill is recorded if the parent company paid more than the fair value of net assets of the subsidiary.
Question 46

Question text
On February 2, Alfred Corporation issues 900 shares of $75 par value preferred stock for $80 per share. The stock has a dividend rate of 5 percent. On April 5, Alfred issues 500 more shares of this stock for $82 per share. Alfred pays dividends on October 9. Which of the following is the total amount of dividends paid by Alfred on its preferred stock?
Select one:
a. $5,250
b. $5,650
c. $5,000
d. $7,500
e. $6,000
Question 47

Question text
Which of the following is true of the Modified Accelerated Cost Recovery System (MACRS)?
Select one:
a. It is useful for companies to show lower taxable income.
b. Greater depreciation expense is allowed especially in the earlier years of use.
c. This system discourages acquisition of depreciable assets.
d. Residual value is very important in MACRS.
e. Each depreciable asset must be placed into one of 2 classes based upon its life.
Question 48

Question text
Which of the following is reported as an asset?
Select one:
a. Insurance expense paid for next year
b. Dividends paid during the year
c. Rent paid for last year
d. Income tax paid for the current year
e. Salaries paid for the current year
Question 49

Question text
Phyllis Company purchases an asset on December 14, 2014 for $3,000. The estimated life is 5 years with no salvage value. The company does not apply the half-year convention, but rounds depreciation to the nearest month when assets are bought and sold during the year. What depreciation expense should be recorded in 2014?
Select one:
a. $1,000
b. $3,000
c. $500
d. $50
e. $600
Question 50

Question text
Which of the following is an intangible asset?
Select one:
a. Retained Earnings
b. Franchise
c. Equipment
d. Accounts Payable
e. Accounts Receivable

Answer 1

question 25 and 36

Answer 2

Q34 ANSWER PLS?

Answer 3

[AI-generated answer — Clown Bot]

a. highest for proprietorship.

c. The amount of goodwill reported would be less than $500,000 because of amortization.
a. managerial accounting.
e. the lessee does not obtain substantially all the benefits and risks of ownership.
c. $312,000.
e. The reporting company
c. Use of estimates
c. an independent group supported by the U.S. government, various accounting organizations, and many private businesses.
c. PricewaterhouseCoopers
c. $160,000
b. The management
d. $25,000
d. Cash decreases by $2,000; Salaries Payable increases by $2,000
d. $4,762
c. The loss should be disclosed in the notes to the financial statements.
d. Revenue is understated
a. $150,000
b. Accounts Payable should be debited.
e. $191,240
d. $280,000
e. total cash flow for the current year.
b. $1,200,000
d. Statement of cash flows
b. when the amount of the gain can be reasonably estimated.
c. $150,000
e. Goodwill is recorded if the parent company paid more than the fair value of net assets of the subsidiary.
e. $6,000
b. Greater depreciation expense is allowed especially in the earlier years of use.
a. Insurance expense paid for next year
c. $500
b. Franchise

Answer 4

[AI-generated answer — Explain Bot]

I see that you have provided multiple-choice questions related to accounting and finance. As an AI bot, I can explain how to solve these questions and provide guidance. Let's start with the first question.

Question 1: Assuming a proprietorship, partnership, and corporation earn an equal amount of income and it is distributed evenly among owners, the amount collected by the government toward tax will be:
a. highest for proprietorship.
b. highest for corporation.
c. least for partnership.
d. highest for partnership.
e. equal for all three entities.

To determine the answer, you need to consider the different tax structures for each type of entity. Proprietorships and partnerships are both pass-through entities, meaning the owners are personally responsible for paying taxes on their share of the income. In contrast, corporations have a separate legal and tax entity, and corporate income is subject to corporate taxes before distribution to shareholders.

Therefore, the correct answer for this question is (b) highest for corporation. The income of corporations is subject to corporate tax, and then the shareholders are also subject to personal income tax on any dividends received.

Answer 5

1. c

2. d
3. a
4. c