BUSA 202 Homework 2 Exam 2026
Questions and Answers
U.S. GAAP are ______. - Correct answer-C. the accounting rules developed by the
FASB for use in the United States
Financial information is enhanced when it is ______. (Select all that apply.) -
Correct answer-A. verifiable
D. understandable
E. comparable
F. timely
Liberty, Inc., a US company, sold merchandise to Belle, a French company, for
10,000 euros. In Liberty's US financial statements, this sale should be reported in
______. - Correct answer-C. US dollars
Nim Com Soup, Inc., purchased land at a cost of $7,000 five years ago. Currently,
the land is estimated to be worth $38,000. At what amount should the land be
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, reported on Nim Com Soups' balance sheet at year end? DO NOT INCLUDE $ IN
ANSWER - Correct answer-7,000 ± 0
Cash-basis accounting may distort net income when a company ______. (Select all
that apply.) - Correct answer-Collects cash in advance of providing services to
customers
Pays for expenses in advance of when the resources are used
Makes credit sales
Pays for expenses in a later accounting period than when the resources are used
On May 1, the bank said it may lend money to Nim Com Soup, Inc. The amount
will depend on Nim Com Soup's income statement for the month of May. Since the
bank did not specify, Nim Com Soup did not follow generally accepted accounting
principles (GAAP). It reported net income for the month ended May 31 of
$50,000. The revenue included $3,000 of cash collected in advance from customers
for services to be performed in June. The revenue also included a $12,000 increase
in the value of its land. The expenses excluded $3,000 it owed for services it
received in May. What is Nim Com Soup's GAAP Net Income? - Correct answer-
32,000 ± 0%
Explanation of previous question - Correct answer-The company violated the:
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Questions and Answers
U.S. GAAP are ______. - Correct answer-C. the accounting rules developed by the
FASB for use in the United States
Financial information is enhanced when it is ______. (Select all that apply.) -
Correct answer-A. verifiable
D. understandable
E. comparable
F. timely
Liberty, Inc., a US company, sold merchandise to Belle, a French company, for
10,000 euros. In Liberty's US financial statements, this sale should be reported in
______. - Correct answer-C. US dollars
Nim Com Soup, Inc., purchased land at a cost of $7,000 five years ago. Currently,
the land is estimated to be worth $38,000. At what amount should the land be
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, reported on Nim Com Soups' balance sheet at year end? DO NOT INCLUDE $ IN
ANSWER - Correct answer-7,000 ± 0
Cash-basis accounting may distort net income when a company ______. (Select all
that apply.) - Correct answer-Collects cash in advance of providing services to
customers
Pays for expenses in advance of when the resources are used
Makes credit sales
Pays for expenses in a later accounting period than when the resources are used
On May 1, the bank said it may lend money to Nim Com Soup, Inc. The amount
will depend on Nim Com Soup's income statement for the month of May. Since the
bank did not specify, Nim Com Soup did not follow generally accepted accounting
principles (GAAP). It reported net income for the month ended May 31 of
$50,000. The revenue included $3,000 of cash collected in advance from customers
for services to be performed in June. The revenue also included a $12,000 increase
in the value of its land. The expenses excluded $3,000 it owed for services it
received in May. What is Nim Com Soup's GAAP Net Income? - Correct answer-
32,000 ± 0%
Explanation of previous question - Correct answer-The company violated the:
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