Finance And Accounting

Question: Which of the following accounts would NOT be eliminated in the preparation of a consolidated financial statement?
A
Equity in Earnings of Subsidiary Company (Parent Company)

B
Accounts Receivable (Intercompany)

C
Sales (Intercompany)

D
Dividends Declared (Parent Company)

Note: Answer not sure
1. Report
Question: The FASB requires companies to show in income each period the change in the fair value of any derivative that _________________.
A
attempts to reduce the risk in future steams of cash flows

B
does not attempt to hedge fair value or cash flow

C
Both

D
Neither

Note: Answer not sure
1. Report
Question: Which of the following is an important reason for the continued legal existence of subsidiary companies?
A
To reduce the financial risk of one segment becoming insolvent

B
To meet more effectively the requirements of state corporation and tax legislation

C
To expand with a minimum of capital investment

D
All of these

Note: Answer not sure
1. Report
Question: Which of the following statements about preparing consolidated financial statements is true?
A
The parent owns more than 50 percent of the voting stock of the subsidiary.

B
The parent owns 100 percent of the voting stock of a real estate subsidiary.

C
The parent owns 100 percent of the voting stock of a finance subsidiary.

D
All of these statements are true.

Note: Answer not sure
1. Report
Question: In computing its income tax expense for the current year (its first year of operations), XYZ Company has an $18,000 temporary difference (accelerated depreciation for tax purposes). It is assumed that a tax rate of 35 percent will apply to the future period of taxable income. The company's income for tax purposes is $282,000 and the current tax rate is 40 percent. What amount would XYZ Company report as income tax expense for the current year?
A
$119,100

B
$120,000

C
$105,600

D
$106,500

Note: Answer not sure
1. Report
Question: Reporting revenues and expenses for book purposes in a different period than for tax purposes results in _______________.
A
temporary differences

B
permanent differences

C
tax liability

D
tax obligation

Note: Answer not sure
1. Report
Question: Which of the following methods of recording leases recognizes the signing of the lease as the acquisition of a long-term asset and the incurring of a long-term liability for lease payments?
A
Operating lease method

B
Capital lease method

C
Rental lease method

D
None of the

Note: Answer not sure
1. Report
Question: XYZ Company reports income tax expense of $224,000 on its Income Statement for the year ending December 31 Year 4. Included in Year 4's income is interest revenue of $40,000 from some tax-exempt municipal bonds that the company owns. In computing its income tax expense of $224,000, the company also had a temporary difference of $80,000, which will result in a future tax deduction. It is assumed that a tax rate of 30 percent will apply to the future tax deduction. The tax rate for Year 4 (the company's first year of operations) is 40 percent. Given the above information, how would XYZ Company report the tax effect of the temporary difference on its Balance Sheet for the current year?
A
As a deferred tax asset of $24,000

B
As a deferred tax liability of $24,000

C
As a deferred tax asset of $32,000

D
As a deferred tax liability of $32,000

Note: Answer not sure
1. Report
Question: XYZ Company purchases a machine early in Year 1. For book purposes, XYZ Company uses straight-line depreciation. For tax purposes, the company follows ACRS. Excess depreciation for tax purposes in Year 1 is $36,000. Assuming that a tax rate of 30 percent will apply in the future period of taxable income, what is the amount of income taxes deferred in Year 1?
A
$36,000

B
$25,200

C
$10,800

D
None of these

Note: Answer not sure
1. Report
Question: XYZ Company purchases some ABC Company stock for $56,000 on January 1 of Year 1. At December 31 of Year 1, the market value of the ABC stock is $48,000. On July 1 of Year 2, XYZ Company sells all of the ABC stock for $45,000. XYZ Company accounted for the initial investment as a trading security. Given this information, how would XYZ Company report the investment in the ABC stock on its December 31 Year 2 Income Statement?
A
As a realized loss on trading security of $11,000

B
As an unrealized loss on trading securities of $8,000

C
As a realized loss on trading securities of $3,000

D
As an unrealized loss on trading securities of $3,000

Note: Answer not sure
1. Report

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Question: Which of the following accounts would NOT be eliminated in the preparation of a consolidated financial statement?

Question: The FASB requires companies to show in income each period the change in the fair value of any derivative that _________________.

Question: Which of the following is an important reason for the continued legal existence of subsidiary companies?

Question: Which of the following statements about preparing consolidated financial statements is true?

Question: Reporting revenues and expenses for book purposes in a different period than for tax purposes results in _______________.

Question: Which of the following methods of recording leases recognizes the signing of the lease as the acquisition of a long-term asset and the incurring of a long-term liability for lease payments?