Question

103. In doing an allocation for a basket purchase
     1. Use the individual costs and the total market value
     2. Use the individual costs and the individual market values
     3. Use the total cost and the total market value
     4. Use the total cost and the individual market values

104. Aggressive Accounting practices produce
     1. The Same Cash Flow from Operations as Conservative Accounting
     2. A Higher Cash Flow from Operations than Conservative Accounting
     3. A Lower Cash Flow from Operations than Conservative Accounting

105. Uncontrolled Liquidations (more than one possible correct answer)
     1. Increase Taxes for FIFO companies                     B) Increase Income for FIFO companies

C) Increase Income for LIFO companies                  D) Increase Taxes for LIFO companies

106. When Goodwill dies it is called
     1. Amortization                B) Impairment                  C) Depreciation                D) Depletion

107. In Cash Flow reporting inventory is measured at
     1. $0                                                                          B) It depends on the measuring system

C) Sacrifice Value                                                     D) Benefit Value

Answer 1

Solution 1) In doing an allocation for a basket purchase

The Correct Option is Option A: Use the individual costs and the total market value

Explanation: A basket purchase is the acquisition of a number of assets as a group, in a single purchase transaction. A basket purchase usually arises when the buyer has the opportunity to acquire a number of assets at a price below their combined market values. When multiple assets are acquired in this manner, the accountant typically records the cost of the assets individually in the fixed assets register. To do so, allocate the purchase price amongst the assets based on their relative fair values.

Solution 2: Aggressive Accounting practices produce:

The Correct Option is Option B: A Higher Cash Flow from Operations than Conservative Accounting

Explanation: Aggressive accounting refers to accounting practices that are designed to overstate a company's financial performance, either by delaying or covering up losses, or artificially inflating its value by overstating earnings.

Solution 3) Uncontrolled Liquidations

The Correct Option is Option C and Option D: Increase Income for LIFO companies And Increase Taxes for LIFO companies

Solution 4) When Goodwill dies it is called

The Correct Option is Option A: Amortization

Explanation: Goodwill amortization refers to the gradual and systematic reduction in the amount of the goodwill asset by recording a periodic amortization charge.

Solution 5) In Cash Flow reporting inventory is measured at

The Correct Option is Option A: $0