ACCT 370 practice final exam questions
And Answers.
Which one of the following factors makes it difficult for financial analysts to use trend analysis? -
Answer an aging asset base
Floating-rate debt is the most common method for lenders to protect themselves from losses
that may arise as a result of: - Answer increases in the market interest rate.
Which of the following is not an accurate statement regarding the retirement of debt? - Answer
When debt is retired before the maturity date, a loss occurs if the market rate of interest
increased subsequent to the issue of the bond.
An impairment loss is reported on the income statement as: - Answer part of income from
continuing operations.
Expenditures included in the initial balance sheet carrying amount of a long-lived asset are: -
Answer capitalized costs.
The two broad categories of differences that result from determining the pre-tax book income
and the taxable income are: - Answer temporary differences and permanent differences.
Consistent with GAAP, bonds are reported on the balance sheet at market value. - Answer
false (recorded at amortized costs)
Which of the following does not represent guidance for assets held for sale? - Answer They
are reported at the lower of book value or fair value.
Replacement or current cost is an example of the economic sacrifice approach for valuing long-
lived assets. - Answer true
The FASB has been able to guard against management manipulation of earnings as a result of
asset impairments by: - Answer prohibiting restoration of previously recognized impairment
losses.
Secured bonds are __________ by assets held by the bond issuer. - Answer collateralized
Managers in lessee companies tend to prefer that leases be treated as finance leases. - Answer
false
And Answers.
Which one of the following factors makes it difficult for financial analysts to use trend analysis? -
Answer an aging asset base
Floating-rate debt is the most common method for lenders to protect themselves from losses
that may arise as a result of: - Answer increases in the market interest rate.
Which of the following is not an accurate statement regarding the retirement of debt? - Answer
When debt is retired before the maturity date, a loss occurs if the market rate of interest
increased subsequent to the issue of the bond.
An impairment loss is reported on the income statement as: - Answer part of income from
continuing operations.
Expenditures included in the initial balance sheet carrying amount of a long-lived asset are: -
Answer capitalized costs.
The two broad categories of differences that result from determining the pre-tax book income
and the taxable income are: - Answer temporary differences and permanent differences.
Consistent with GAAP, bonds are reported on the balance sheet at market value. - Answer
false (recorded at amortized costs)
Which of the following does not represent guidance for assets held for sale? - Answer They
are reported at the lower of book value or fair value.
Replacement or current cost is an example of the economic sacrifice approach for valuing long-
lived assets. - Answer true
The FASB has been able to guard against management manipulation of earnings as a result of
asset impairments by: - Answer prohibiting restoration of previously recognized impairment
losses.
Secured bonds are __________ by assets held by the bond issuer. - Answer collateralized
Managers in lessee companies tend to prefer that leases be treated as finance leases. - Answer
false
