Quiz Review 7' Business - Accounting And Taxation

1

Joan is a 30 percent partner in the OJT Partnership when she sells her entire interest to Crissy for $100,000 cash. At the time of the sale, Joan's basis in OJT is $63,000 (which includes her $10,000 share of OJT liabilities). OJT does not have any hot assets. What is the amount and character of Joan's gain or loss on the sale?

2

Current assets include cash and all other assets expected to become cash or be consumed:

3

All of the following statements regarding accounting for stock investments with insignificant influence under U.S. GAAP are true except:

4

Unexpended resources transferred to the debt service fund from the General Fund would typically be classified as Restricted Fund Balance.

5

Effective cost control begins in the planning stage of the management cycle

6

Helmers Corporation manufactures a single product. Variable costing net operating income last year was $85,000 and this year was $101,900. Last year, $31,700 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $12,000 in fixed manufacturing overhead costs were deferred in inventory under absorption costing.What was the absorption costing net operating income last year?

7

Ken has a $40,000 loss from an investment in a partnership in which he does not materially participate. He paid $30,000 for his interest. How much of the loss is disallowed by the at-risk rules? How much is disallowed by the passive activity loss rules?

8

Common examples of cash equivalents are money market funds, Treasury bills, and certificates of deposit.

9

The measure of the actual result deducted from the flexible budget amount is the:

10

Prepare X's journal entries for 2016 and 2017, assuming that this is a Portfolio Investment and is accounted for at fair value through profit and loss.

11

Calculate the conversion costs from the following information: Fixed manufacturing overhead$2,000 Variable manufacturing overhead 1,000 Direct materials 2,500 Direct labor 1,500

12

Marcus has decided to open an auto-detailing business. He will pick up an automobile from the client, take it to his parents' garage, detail it, and return it to the client. If he does all of the work himself and takes no legal steps to form a special

13

Reasons that a company would purchase treasury stock include all of the following EXCEPT:

14

The difference between operating income and the minimum dollar return required on a company's operating assets is the _______________

15

The manager of Pearless Company's Toy Division is not satisfied with the level of return on investment that the division achieved this year. What can be done to improve return on investment?

16

Each of the following definitions relates to terms relevant for revenue recognition.

in Business

______
1)
an agreed-upon change in the type, quantity, or price of goods or services to be delivered

______
2)
a promise in a contract with a customer to transfer goods or services

______
3)
a contract term that could cause the amount of consideration received to be less than the amount expected

______
4)
an agreement between two or more parties that creates enforceable rights and obligations

______
5)
the costs that a seller incurs by obtaining the contract but would not have been incurred if the contract had not been obtained

______
6)
arises when a customer's payment of consideration occurs prior to the seller's performance

______
7)
increases in assets or settlements of liabilities from activities that are the company's ongoing major or central operations

______
8)
represents the seller's unconditional right to receive consideration from a customer

______
9)
the amount ofconsideration a seller expects to be entitled to receive in exchange for providing the promised goods or services to the customer.

Terms:

a.
Transaction price
b.
Performance obligation
c.
Contract
d.
Receivable
e.
Contract liability
f.
Revenues
g.
Incremental costs
h.
Contract modification
i.
Applicable constraint

Required:

Match each definition to the appropriate term.

What will be an ideal response?

17

The entry to record expired insurance is omitted. This error causes

18

If all of the following are provided for by a lease contract, which one is not included in minimum lease payments for the lessee?

19

Which of the following courts listens to an appeal from a taxpayer or the government when there is a disagreement with the trial court's decision?

20

Which of the following special allocations are mandatory for the partners in a partnership?

21

Which one of the following statements is true?

22

Pedregon Corporation has provided the following information: Cost per Unit Cost per PeriodDirect materials$6.35 Direct labor$3.75 Variable manufacturing overhead$1.50 Fixed manufacturing overhead $15,000Sales commissions$0.50 Variable administrative expense$0.55 Fixed selling and administrative expense $4,500 If 4,000 units are sold, the variable cost per unit sold is closest to:

23

If sales are $680,000 and the beginning and ending balances of Accounts Receivable are $34,400 and $38,400, respectively, the cash collected from customers is:

24

The usual starting point for a master budget is:

25

A deficiency in design of internal controls exists when an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met

26

Strictly speaking, the price-earnings ratio assumes that firm value is the

27

Bellue Inc. manufactures a single product. Variable costing net operating income was $77,000 last year and its inventory decreased by 2100 units. Fixed manufacturing overhead cost was $4 per unit for both units in beginning and in ending inventory. What was the absorption costing net operating income last year?

28

Island Corporation owes Mutual Bank a 10% note payable for $100,000 plus $8,000 accrued interest. On October 1, 2018, Island and Mutual Bank execute an agreement whereby Island will pay Mutual $128,000 on the due date of the note on October 1, 2020. If the present value interest factor for two years at 10% is .82645, what will be the new note receivable balance for Mutual Bank?

29

Which of the following statements is false regarding corporate estimated tax payments?

30

The book value of an asset is equal to its cost plus accumulated depreciation

31

Standard cost systems are used for all of the following except:

32

Which of the following is NOT a fraud symptom related to internal control weaknesses?

33

The controller notifies the business reporting process of investing and financing transaction activities,

34

If Net Sales at Sassy's Sweet Factory increased from $37,000 to $58,000 and its cost of goods sold increased from $17,000 to $43,000, the vertical analysis based on net sales would show the following percentages for cost of goods sold: (Round your final answer to the nearest percentage.)

35

If an employer qualifies for a lower state unemployment tax rate, this lowers the credit allowed in computing the federal unemployment tax due

36

Bartner Furniture, Inc. purchased inventory at $1,200 list price and the terms were 3/10 n/30. If Bartner paid the full invoice price on the 10th day, what amount of cash did Bartner pay to settle the account?

37

When debt is used to finance the purchase of assets, the term or time span of the debt should always be shorter than the life span of the assets.

38

On January 1, 20X9, Princeton Company acquired 80 percent of the common stock and 60 percent of the preferred stock of Stanford Company, for $400,000 and $60,000, respectively. At the time of acquisition, the fair value of the common shares of Stanford Company held by the noncontrolling interest was $100,000. Stanford Company's balance sheet contained the following balances: Preferred Stock ($5 par value)$100,000 Common Stock ($10 par value) 200,000 Retained Earnings 300,000 Total Stockholders' Equity$600,000 For the year ended December 31, 20X9, Stanford Company reported net income of $100,000 and paid dividends of $40,000. The preferred stock is cumulative and pays an annual dividend of 10 percent.Based on the preceding information, the consolidating entry to prepare the

39

The LIFO method of inventory valuation assigns the cost of the most recent purchases to the cost of goods sold.

40

Liquidity

41

The difference between the issue price per share of common stock and the par value per share of the stock is credited to:

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Quiz Review 7' Business - Accounting And Taxation

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