Question

1) The traditional accounting model delays the recognition of value changes of assets and liabilities until what event occurs?

a. A change in value.

b. A market transaction.

c. A balance sheet date.

d. Cash is received or cash is paid.

2)Which of the following is not one of methods used by GAAP for treating value changes?

a. Recognize value changes on the balance sheet and income statement when they are realized in a market transaction

b. Recognize value changes in the income statement when the value changes occur over time, but recognize them on the balance sheet when they are realized in a market transaction

c. Recognize value changes on the balance sheet when the value changes occur over time, but recognize them in the income statement when they are realized in a market transaction

d. Recognize value changes on the balance sheet and income statement when they occur over time, even though they are not realized in a market transaction

3)U.S. GAAP, IFRS, and other major accounting standards are best characterized as:

a. historical accounting models.

b. current value accounting models.

c. acquisition cost accounting models.

d. mixed attribute accounting models.

4)Which of the following would not represent an acquisition cost to be added to the purchase price of building:

a. Sales Tax.

b. Cost of grading the land.

c. Capital repairs to get the building ready for occupancy.

d. Renovations that would extend the life of the building.

5) Reporting financial assets and liabilities at fair values also is referred to as:

a. historical cost.

b. acquisition cost.

c. mark-to-market.

d. mortgage-backed cost

6) Relevant asset valuations refer to all of the following except:

a. they are timely.

b. they have the capacity to affect a user’s decisions, based on the information.

c. they incorporate all available information.

d. they are always subjective.

7) The accounting equation is represented by Assets= Liabilities + Stockholders’ Equity which of the following would cause a change in the stockholders’ equity accounts:

a. Sale of Land for cash and a note receivable for the balance

b. Collection of an account receivable

c. Purchased an asset for cash and 10,000 shares of preferred stock

d. Purchased inventory on account

8) Present value methods are often used with receivables and liabilities:

a. With payment schedules in excess of one year.

b. With payment schedules of less than one year.

c. When fair values can be easily determined.

d. When asset are sold in the middle of the accounting cycle.

9) All of the following can be used to describe reliability of accounting information except:

a. biased.

b. credible.

c. verifiable.

d. supported by source documents.

10) Which of the following assets would appear on the balance sheet at an amount greatly below its fair market value?

a. Inventory

b. Marketable securities

c. Equipment

d. Brand name

Answer 1

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1) The traditional accounting model delays the recognition of value changes of assets and liabilities until what event occurs?

b. A market transaction.

2) Which of the following is not one of methods used by GAAP for treating value changes?

b. Recognize value changes in the income statement when the value changes occur over time, but recognize them on the balance sheet when they are realized in a market transaction.

3) U.S. GAAP, IFRS, and other major accounting standards are best characterized as:

d. mixed attribute accounting models.

4) Which of the following would not represent an acquisition cost to be added to the purchase price of building:

b. Cost of grading the land.

5) Reporting financial assets and liabilities at fair values also is referred to as:

c. mark-to-market.

6) Relevant asset valuations refer to all of the following except:

d. they are always subjective.

7) The accounting equation is represented by Assets= Liabilities + Stockholders’ Equity which of the following would cause a change in the stockholders’ equity accounts:

c. Purchased an asset for cash and 10,000 shares of preferred stock.

8) Present value methods are often used with receivables and liabilities:

a. With payment schedules in excess of one year.

9) All of the following can be used to describe reliability of accounting information except:

a. biased.

10) Which of the following assets would appear on the balance sheet at an amount greatly below its fair market value?

d. Brand name.