Generally Accepted Accounting Principles (GAAP), Finance And Accounting

Question: What is the proper financial reporting treatment for a discontinued operation?
A
Just include a statement that the firm is going to discontinue an operation, but leave the accounting combined.

B
Create an entirely separate entity for the discontinued operation if it is not already there, and put it into bankruptcy.

C
Report it separately on the balance sheet and income statement.

D
Expense all of the assets of the discontinued operation in the current period.

Note: Answer not sure
1. Report
Question: Under which of the following situations would prior financial reports not have to be restated?
A
The change is due to a policy change and in writing.

B
The change materially affects what EPS would have been last year.

C
The change has no impact on previous accounting or financial reports.

D
The change is due to an error in the interpretation of accounting GAAP law.

Note: Answer not sure
1. Report
Question: Which of the following would not be included in comprehensive income?
A
Loss due to a bad management decision

B
Revenue from a subsidiary company

C
Management salaries

D
Loss due to a hurricane for a company located in an area where hurricanes are not typical

Note: Answer not sure
1. Report
Question: What does the term derivative mean for accounting purposes?
A
A financial instrument the value of which is derived from another financial instrument

B
A financial instrument such as a stock or bond

C
A liability of which the obligation is derived based on interest rates

D
An asset the value of which is derived by the current trade in value

Note: Answer not sure
1. Report
Question: Why are direct costs added to the value of the inventory?
A
They are costs directly related to the creating of an inventory item and without them, there would be no inventory.

B
It is required by the IRS tax laws.

C
It helps reduce expenses on the income statement.

D
It inflates inventory values on the balance sheet which looks good to the investors.

Note: Answer not sure
1. Report
Question: Which of the FASB statements discusses the methodology to be applied when consolidating financial statements?
A
FASB 160

B
FASB 12

C
FASB 144

D
FASB 123

Note: Answer not sure
1. Report
Question: Which of the following is a method of testing for impairment?
A
Net Income potential method

B
Discounted cash flow value compared to carrying value

C
Asking management what a fair value is

D
Looking at the historical cost

Note: Answer not sure
1. Report
Question: Why would a company issue stock dividend?
A
Because shareholders prefer stock to cash

B
Because they can issue the stock of any corporation to the shareholders

C
Because it involves lower tax impact to both the shareholders and the corporation

D
Because no cash outlay is required while the shareholders are still rewarded

Note: Answer not sure
1. Report
Question: Which of the following would be a contingency needing to be booked?
A
Sale of an asset

B
Sale of inventory

C
Management salaries for the following period

D
Product warranty obligations

Note: Answer not sure
1. Report
Question: How are income taxes calculated in general for the current period?
A
Using the highest tax bracket in the name of conservatism

B
Using the taxable net income multiplied by the estimated tax rate for the company

C
As an average for the year

D
Based on previous year's tax amount for the same period

Note: Answer not sure
1. Report

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Question: What is the proper financial reporting treatment for a discontinued operation?

Question: Under which of the following situations would prior financial reports not have to be restated?

Question: Which of the following would not be included in comprehensive income?

Question: What does the term derivative mean for accounting purposes?

Question: Why are direct costs added to the value of the inventory?

Question: Which of the FASB statements discusses the methodology to be applied when consolidating financial statements?

Question: Which of the following is a method of testing for impairment?

Question: Why would a company issue stock dividend?

Question: Which of the following would be a contingency needing to be booked?

Question: How are income taxes calculated in general for the current period?