Grading Summary Essay

nous 1. gesture (TCO A) The Financial Accounting Standards Board employs a due butt against system, which has all CPAs in the United States vote on a refreshing statement. enables interested parties to express their views on have it falses under consideration. identifies the nameing issues that ar the most(prenominal) important. requires that all cardants receive a copy of mvirtuosotary standards. Points Received 5 of 5 forefront 2. caput (TCO A) The cash method of explanationis utilize by most publicly traded corporations for financial statement purposes. is not in accordance with the matching principle for most publicly traded corporations. often is utilise on the income statement by large, publicly held companies. each(prenominal) of the above caput 3. principal (TCO A) Which of the avocation is an ingredient of relevance?VerifiabilityCompletenessNeutralityPredictive place top dog 4. interrogate (TCO A) The characteristic that is demonstrated when a high distr ibutor point of consensus can be secured among independent measurers using the same measurement methods isrelevance.reliability.verifiability.neutrality.Question 5. Question (TCO A) Which of the interest is not a basic part of financial statements?Assets equilibrise sheetLossesRevenuesQuestion 6. Question (TCO A) Which basic component part of financial statements arises from peripheral or incidental transactions?AssetsLiabilitiesGainsExpensesQuestion 7. Question (TCO A) Which basic assumption may not be followed when a hard in bankruptcy answer fors financial results? Economic entity assumptionGoing push assumptionPeriodicity assumptionMo shekelsary unit assumptionQuestion 8. Question (TCO D) Balance sheet teaching is useful for all of the future(a) except to compute rates of return.analyze cash inflows and outflows for the finish.evaluate seat of government structure.assess future cash flows.Question 9. Question (TCO D) The nitty-gritty of meter that is expected to elaps e until an asset is realized or oppositewise born-again into cash is referred to as solvency.financial flexibility.liquidity.exchangeability.Question 10. Question (TCO A) The quality of information that gives assurance that is reasonably free of error and bias and is complete is relevance. stanch representation.verifiability.neutrality.Question 1. Question (TCO D) The basis for classifying assets as current or disused is conversion to cash within the accounting cycle or one social class, whichever is shorter.the operating cycle or one year, whichever is longer.the accounting cycle or one year, whichever is longer.the operating cycle or one year, whichever is shorter.Question 2. Question (TCO A) What is FASB Codification? Explain in detail.teacher Explanation The codification takes the statements and other pronouncements and arranges the information by topic. Per the FASB, the new system will 1. reduce the sum total of time and effort required to solve an accounting research iss ue 2. mitigate the risk of noncompliance with standards through improved usability of the literature 3. issue accurate information with real-time updates as new standards argon released and 4. dish up the FASB with the research and convergence efforts required during the standard-setting process.Question 3. Question (TCO C) At shame Company, events and transactions during 2010 included the following. The tax rate for all items is 30%. (1) depreciation for 2008 was found to be understated by $30,000. (2) A strike by the employees of a supplier resulted in a loss of $25,000. (3) The inventory at December 31, 2008 was overstated by $40,000. (4) A flood destroyed a building that had a book value of $500,000. Floods are very erratic in that area. What would the effect of these events and transactions on 2010 income from continuing operations wampum of tax be? Instructor Explanation $25,000 $7,500 = $17,500Question 4. Question (TCO C) For the year ended December 31, 2010, Transfor mers Inc. reported the following. Net income $60,000Preferred dividends declared $10,000 common dividend declared $2,000 unrealized holding loss, net of tax $1,000Retained cyberspace, showtime end $80,000Common stock sold during the year Retained earnings, rootage balance $80,000 Common stock $40,000Accumulated Other Comprehensive Income, get-go Balance $5,000 What would Transformers report as the ending balance of retain earnings? Instructor Explanation $80,000 + $60,000 $10,000 $2,000 = $128,000Question 5. Question (TCO C) Madsen Company reported the following information for 2010. Sales revenue $510,000Cost of goods sold $350,000Operating expenses $55,000Unrealized holding gain on available-for-sale securities $40,000 Cash dividends received on the securities $2,000For 2010, what would Madsen report as other oecumenical income? Instructor Explanation Other comprehensive income = $40,000Question 6. Question (TCO B) Allowance for in question(p) accounts on 1/1/10 was $50, 000. The balance in the border account on 12/31/10 after reservation the annual adjusting entry was $65,000, and during 2010, liberal debts written off tallyed to $40,000. You are to suffer the missing adjusting entry. Please direct DR (debit) or CR (credit) to the left over(p) of the account epithet, and place a comma butterfly between the account title and the amount of the adjustment. Instructor Explanation DR handsome Debt Expense 55,000 CR Allowance for Doubtful Accounts 55,000Ending balance $65,000 head start balance 50,000 fight 15,000 create verbally off 40,000Adjustment $55,000Question 7. Question (TCO B) Allowance for doubtful accounts on 1/1/10 was $75,000. The balance in the allowance account on 12/31/10 after making the annual adjusting entry was $60,000, and during 2010, 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. Instructor Explanation DR Bad Debt Expense 15,000 CR Allowance for Doubtful Accounts 15,000Ending balance $60,000Beginning balance 75,000Difference -15000Written off 30000Adjustment $15,000Question 8. Question (TCO B) Allowance for doubtful accounts on 1/1/10 was $60,000. The balance in the allowance account on 12/31/10 after making the annual adjusting entry was $55,000, and during 2010, bad debts written off amounted to $40,000. 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. Instructor Explanation 12/31/10 Ending Balance 55,0001/1/10 Beginning Balance 60,000Adjustment -5,000Written off 40,000Adjusting entry 35,000DR Bad Debts Expense, 35,000CR Allowance for Doubtful Accounts, 35,000Question 9. Question (TCO B) Pre salaried rent at 1/1/10 was $30,000. During 2010, rent payments of $120,000 were made and charged to rent expense. The 2010 income statement shows as a general expense the item rent expense in the amount of $125,000. You are to prepare the missing adjusting entry that must have been made, anticipate 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 Instructor Explanation DR Rent Expense 5,000CR Prepaid Rent 5,000Rent expense $125,000Less cash paid 120,000Reduction in prepaid rent $5,000Question 10. Question (TCO D) Which of the following should be reported for capital stock?The shares authorizedThe shares issuedThe shares outstandingAll of the aboveQuestion 11. Question (TCO D) An example of an item that is not an element of working capital is accrued interest on notes receivable.goodwill.goods in process. temp investments.Question 12. Question (TCO A) Financial information exhibits the characteristic of consis tency when expenses are reported as charges against revenue in the period in which they are paid. accounting entities give accountable events the same accountingtreatment from period to period. extraordinary gains and losses are not included on the income statement. accounting procedures are adopted which give a consistent rate of net incomeQuestion 13. Question (TCO D) The current assets section of the balance sheet should includemachinery.patents.goodwill.inventory.Question 14. Question (TCO D) Houghton Company has the following items common stock, $720,000 treasury stock, $85,000 deferred taxes, $100,000, and retained earnings, $313,000. What total amount should Houghton Company report as stockholders equity? $848,000$948,000$1,048,000$1,118,000Instructor Explanation General Feedback b. $720,000 $85,000 + $313,000 = $948,000.