Question

Please read problems carefully Budget your time carefully Write down all your neers on this page only. Transpose answers to this page with care answers only.) Good luck! Care. (Grading will be based on this page 3. 1. 11. 21. 2. 12. 22. 14. 5. 15. 25a. 13. 23. 6. 16. 25b. 7. 17. 25c. 10. 20. 8. 9. 18. 19. 25d. 24. riple Choice Questions (4 pointe che question) Choose the BEST answer for the following questions - 1. Which statement below provide financial position information of a firm? (a) income statement (b) etant of retained earnings (c) statement of shareholders ay balance sheet. ders equity (a) Predictive value is an ingredient of: Faithful Representation Relevance a. Yes b. No Yes c. Yes Yes d. No No NO Which organization below is the professional organization for all CPAs in the United States: (a) FASB (b) PCAOB (c) AICPA (d) IASB. 4. 5. The major sources of U.S. generally accepted accounting principles are (a) general practice (b) SEC regulations; (c) IFRS; (d) The Codification Database of the FASB. On 1/31/2016, a company prepaid the $72 rental fee for a parking lot it leases. The rental fee covered a 3-year period beginning 3/1/2016. What is the effect of this transaction on the 12/31/2016 financial statements for each of the following? CURRENT EXPENSES PREPAID EXPENSES (a) $0 572 (b) $22 $50 (c) $24 $48 (d) $20 $52 6. In reviewing a set of journal entries, you encounter an entry composed of a debit to interest expense and a credit to

Answer 1

1: answer: (d)   balance sheet

Because it is the balance sheet which displays the financial position of an organization at a point of time, through detailing about the liabilities towards owing the numerous assets.

2: Sorry, not getting the question.

3: answer: c) AICPA

Because “The American Institute of Certified Public Accountants” (AICPA) is the United State’s national and professional organization for all CPAs, who certifies the accountants.

4: answer: d) The codification database of the FASB.

Because it is the council of the AICPA who has authorised the FASB as the institute that establishes Generally Accepted Accounting Principles (GAAP) for all reporting purpose.

5: answer: (d) current expenses $20 and prepaid expenses $52.

Because the rental begins from 3/1/16, so 10 months from march to December is the current expense, thus (72/3)*(10/12)=$20 and Prepaid rental expenses on 12/31/16 is $72-$20=$52