ACCT 370 Final Exam Liberty University
Questions Fully Solved 2026-2027
Updated.
the method of preparing the statement of cash flows used by the majority of firms is the: -
Answer indirect method
the difference between the total fair value of an acquired business and the fair value of its
identifiable net assets is - Answer goodwill
treasury stock is reported within the balance sheet as - Answer a contra equity account
balance sheets under US GAAP are required to report assets: - Answer in order of liquidity
the dominant method under GAAP for measuring long lived assets is the: - Answer historical
cost approach
When the market rate of interest is below the stated rate of interest, a bond sells at: - Answer
premium
Temporary differences that will cause taxable income in future periods to be lower than pre-tax
book income give rise to - Answer deferred tax assets
the rationale behind the multiple-step income statement is to subdivide the income in a manner
that facilitates: - Answer forecasting
What is one reason lease accounting rules were revised? - Answer Operating leases were a
popular means of off-balance sheet financing.
If a company purchases treasury stock, its earnings per share will increase. ( T/F) - Answer True
In this type of retirement plan, the employee bears little risk related to estimating the amount
of annual contributions. - Answer Defined benefit
The time the performance obligation is satisfied for revenue recognitions is usually: - Answer
At the time of sale.
, Probable future economic benefits obtained or controlled by an entity as a result of past
transactions or events defines - Answer Assets
In a common-size balance sheet, all items are expressed as a percentage of: - Answer Total
assets
The allowance for uncollectible account is classified as: - Answer contra asset
A pension plan is underfunded if the projected benefit obligation exceeds the fair value of the
pension plan assets. - Answer True
When a company owns more than 50% of another, this accounting method is required by GAAP.
- Answer Consolidation
A company that is owned in majority by another company is called: - Answer Subsidiary.
Software development costs must be expensed until the project reaches this: - Answer
Technological feasibility
This term refers to the risk of nonpayment by a borrower: - Answer credit risk
These are events that occur after the close of the fiscal year, but before the financial statements
are issued. - Answer subsequent events
This is the denominator of A/R turnover - Answer average accounts receivable, net.
this is the denominator of the times interest earned or interest coverage ratio - Answer
interest expense
This is the numerator of the price to earnings ratio: - Answer market price per share
Which of the following is an other comprehensive income item? - Answer change in the fair
value of derivative instruments
income tax expense on the income statement is equal to the amount of taxes to be paid or
refunded for that year. T/F - Answer false
Questions Fully Solved 2026-2027
Updated.
the method of preparing the statement of cash flows used by the majority of firms is the: -
Answer indirect method
the difference between the total fair value of an acquired business and the fair value of its
identifiable net assets is - Answer goodwill
treasury stock is reported within the balance sheet as - Answer a contra equity account
balance sheets under US GAAP are required to report assets: - Answer in order of liquidity
the dominant method under GAAP for measuring long lived assets is the: - Answer historical
cost approach
When the market rate of interest is below the stated rate of interest, a bond sells at: - Answer
premium
Temporary differences that will cause taxable income in future periods to be lower than pre-tax
book income give rise to - Answer deferred tax assets
the rationale behind the multiple-step income statement is to subdivide the income in a manner
that facilitates: - Answer forecasting
What is one reason lease accounting rules were revised? - Answer Operating leases were a
popular means of off-balance sheet financing.
If a company purchases treasury stock, its earnings per share will increase. ( T/F) - Answer True
In this type of retirement plan, the employee bears little risk related to estimating the amount
of annual contributions. - Answer Defined benefit
The time the performance obligation is satisfied for revenue recognitions is usually: - Answer
At the time of sale.
, Probable future economic benefits obtained or controlled by an entity as a result of past
transactions or events defines - Answer Assets
In a common-size balance sheet, all items are expressed as a percentage of: - Answer Total
assets
The allowance for uncollectible account is classified as: - Answer contra asset
A pension plan is underfunded if the projected benefit obligation exceeds the fair value of the
pension plan assets. - Answer True
When a company owns more than 50% of another, this accounting method is required by GAAP.
- Answer Consolidation
A company that is owned in majority by another company is called: - Answer Subsidiary.
Software development costs must be expensed until the project reaches this: - Answer
Technological feasibility
This term refers to the risk of nonpayment by a borrower: - Answer credit risk
These are events that occur after the close of the fiscal year, but before the financial statements
are issued. - Answer subsequent events
This is the denominator of A/R turnover - Answer average accounts receivable, net.
this is the denominator of the times interest earned or interest coverage ratio - Answer
interest expense
This is the numerator of the price to earnings ratio: - Answer market price per share
Which of the following is an other comprehensive income item? - Answer change in the fair
value of derivative instruments
income tax expense on the income statement is equal to the amount of taxes to be paid or
refunded for that year. T/F - Answer false
