Generally Accepted Accounting Principles (GAAP)
 

  1. Question: What are the 3 important dates pertaining to the issuance of stock dividend?

    A
    Date of record, Date of payment, Date of distribution

    B
    Date of issuance, Date of delivery, Date of record

    C
    Date of payment, Date of record, Date of company formation

    D
    Date of declaration, Date of record, Date of distribution

    Note: Answer not sure
    1. Report

  2. Question: What is a special purpose entity?

    A
    The same as a different product line

    B
    A subsidiary entity created for a specific reason

    C
    A subsidiary company in another country

    D
    An entity created solely to avoid taxes

    Note: Answer not sure
    1. Report

  3. Question: What is the accounting treatment of stock dividend when it is issued (not declared)?

    A
    Dr: Cash, Cr: Stock Expense

    B
    Dr: Stock Expense, Cr: Cash

    C
    Dr: Equity, Cr: Dividend Payable

    D
    Dr: Dividend Payable Cr: Common Stock

    Note: Answer not sure
    1. Report

  4. Question: Why would a company want to discontinue the operations of a division?

    A
    Because it generates too much income

    B
    Because it is not profitable and won't be in the future

    C
    Because it is located outside of the company's location

    D
    Because the tax rate is too high

    Note: Answer not sure
    1. Report

  5. Question: Why would a company issue convertible debt?

    A
    The conversion factor makes the offering more attractive.

    B
    It has less tax implications than normal debt.

    C
    It gives the company more power to control its debt to equity structure.

    D
    It limits the owners liability.

    Note: Answer not sure
    1. Report

  6. Question: What are direct costs?

    A
    Costs of management salaries

    B
    Rent and utilities

    C
    Costs which are directly attributable to the production of an inventory item

    D
    General office costs which are then allocated to the inventory as burden

    Note: Answer not sure
    1. Report

  7. Question: What is a "permanent difference"

    A
    A difference in the management's perspective on all the earnings of the company

    B
    A difference in tax law and GAAP which will never be resolved

    C
    A difference in the tax rate between two different countries a firm operates in

    D
    A difference in the GAAP principles used on the books

    Note: Answer not sure
    1. Report

  8. Question: What interest rate would be used to calculate interest capitalization if there is no specific loan associated with the asset except just the overall company debt?

    A
    The lowest rate of interest the company has on loans

    B
    The highest rate of interest the company has on loans

    C
    The Federal reserve rate

    D
    A weighted rate based on the amounts of loans and rates carried by the company

    Note: Answer not sure
    1. Report

  9. Question: Which of the FASB statements discusses the accounting treatment of discontinued operations?

    A
    FASB 123

    B
    FASB 144

    C
    FASB 12

    D
    FASB 201

    Note: Answer not sure
    1. Report

  10. Question: What is a contingency in general?

    A
    Typically an asset purchase which depends on the expenses for the period

    B
    A pending lawsuit already filed

    C
    Potential liabilities with a strong probability that it will happen

    D
    Changes in equity

    Note: Answer not sure
    1. Report
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