Intermediate Accounting Mid Term Devry University

Question :

(TCO A) Financial information demonstrates consistency when

Question 2.

Question :

(TCO A) The Governmental Accounting Standards Board

Question 3.

Question :

(TCO A) Which of the following is an ingredient of relevance?

Comments:

Question 4.

Question :

(TCO A) The two fundamental qualities for accounting information are

Question 5.

Question :

(TCO A) Which of the following is not a basic element of financial statements?

Question 6.

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(TCO A) Which of the following is not a basic assumption underlying the financial accounting structure?

Question 7.

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(TCO A) Which basic assumption may not be followed when a firm in bankruptcy reports financial results?

Question 8.

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(TCO D) Balance sheet information is useful for all of the following except to

Question 9.

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(TCO D) One criticism not normally aimed at a balance sheet prepared using current accounting and reporting standards is

Question 10.

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(TCO A) The quality of information that gives assurance that is reasonably free of error and bias and is complete is

Question :

(TCO D) The net assets of a business are equal to

Question 2.

Question :

(TCO A) What are the arguments for using one worldwide reporting standard for accounting? Explain in detail.

Question 3.

Question :

(TCO C) At Red Company, events and transactions during 20X2 included the following. The tax rate for all items is 30%.
(1) Depreciation for 20X1 was found to be understated by $40,000.
(2) A strike by the employees of a supplier resulted in a loss of $35,000.
(3) The inventory at December 31, 20X1 was overstated by $50,000.
(4) A flood destroyed a building that had a book value of $500,000. Floods are very uncommon in that area.

What would the effect of these events and transactions on 20X2 income from continuing operations net of tax be?

uestion 4.

Question :

(TCO C) For the year ended December 31, 201X, King Inc. reported the following.

Net income	$60,000
Preferred dividends declared	$10,000
Common dividend declared	$2,000
Unrealized holding loss, net of tax	$1,000
Retained earnings, beginning balance	$80,000
Common stock sold during the year Retained earnings, beginning balance	$80,000
Common stock	$40,000
Accumulated Other Comprehensive Income, Beginning Balance	$5,000

What would Transformers report as the ending balance of retained earnings?

Question 5.

Question :

(TCO C) Dolly Company reported the following information for 201X.

Sales revenue	$510,000
Cost of goods sold	$400,000
Operating expenses	$50,000
Unrealized holding gain on available-for-sale securities	$45,000
Cash dividends received on the securities	$3,000

For 201X, what would Dolly report as other comprehensive income?

Question 6.

Question :

(TCO B) Unearned rent at 1/1/1X was $5,500 and at 12/31/1X was $10,000. The records indicate cash receipts from rental sources during 201X amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

Question 7.

Question :

(TCO B) Prepaid rent at 1/1/1X was $25,000. During 201X, rent payments of $123,000 were made and charged to "rent expense." The 201X income statement shows as a general expense the item "rent expense" in the amount of $122,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

Question 8.

Question :

(TCO B) Unearned rent at 1/1/1X was $6,000 and at 12/31/1X was $15,000. The records indicate cash receipts from rental sources during 201X amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

Question 9.

Question :

(TCO B) Allowance for doubtful accounts on 1/1/1X was $75,000. The balance in the allowance account on 12/31/1X after making the annual adjusting entry was $60,000, and during 201X, bad debts written off amounted to $30,000. You are to provide the missing adjusting entry. Please indicate DR (debit) or CR (credit) to the left of the account title, and place a comma between the account title and the amount of the adjustment.

Question 10.

Question :

(TCO D) Which of the following should be reported for capital stock?

Question 11.

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(TCO D) An example of an item that is not an element of working capital is

Question 12.

Question :

(TCO A) Financial information exhibits the characteristic of consistency when

Question 13.

Question :

(TCO D) The current assets section of the balance sheet should include

Question 14.

Question :

(TCO D) Ahnen Company owns the following investments.
Trading securities (fair value) $70,000
Available-for-sale securities (fair value) 40,000
Held-to-maturity securities (amortized cost) 47,000
What will Ahnen report investments in its current assets section?

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