Question

1.Emily Bradly is part of a team at work that has been charged with the responsibility of researching

differences between IFRS and U.S. GAAP. The team reaches a consensus on a given topic that Emily does not

agree with. Not wanting to enter into a conflict, Emily agrees with the group. What type of bias is

represented in the in the above scenario?

A) availability bias

B) overconfidence bias

C) confirmatory bias

D) groupthink bias

2.Yellow Pencil Company pays Helen, a staff accountant, a $10,000 a month salary. How should the salary

be recognized as an expense?

A) matched with revenue earned by the Yellow Pencil Company

B) systematically allocated with the use of the pencil making machinery of the Yellow Pencil Company

factory

C) upon the sale of pencils and in proportion to those sales

D) recorded as a measure of the effort expended by the staff accountant in the periods in which she works

3.Under U.S. GAAP, revenues are considered ________ when the seller has accomplished what it must do to

be entitled to the revenues.

A) recognized

B) earned

C) realized

D) entitled

4.

he ________ cost is the amount of cash (or equivalent) that a firm paid to acquire an asset, whereas

________ is the amount the firm would pay if the asset were purchased today.

A) historical; current cost

B) present value; current market value

C) historical; current market value

D) realized; present value

I need a correct answer with explanation please，thx！

Answer 1

Q. 1. Answer is C, here. Its a confirmatory bias. The person Emily is not agreed but just wish to avoid the conflicts with the other team members, He has just agreed by confirming without being his inner consent, convincing consent or group thinking.

Q. 2. Answer is D) recorded as a measure of the effort expended by the staff accountant in the periods in which she works. Because the Accountants job is neither linked with sale, revenue or use of machinary. he has to take care of accounting of all financial transaction during the period employed.

Q. 3 Answer is A) Revenue are recognized . The Standard suggest as under:

SAB Topic 13 indicates that revenue from the sale of goods or products should not be recognized until it is earned and realized, or realizable. Revenue is generally earned and realized, or realizable, when all of the following conditions have been satisfied:

• There is persuasive evidence of an arrangement.
• Delivery has occurred (e.g., an exchange has taken place).
• The sales price is fixed or determinable.
• Collectibility is reasonably assured.

Q. 4. Answer is C) Historical cost is the amount of cash (or equivalent) that a firm paid to acquire an asset, whereas Current Market Value is the amount the firm would pay if the asset were purchased today. Among all other answers, no other answer is correct both side. As we have paid in past for acquiring an assets is historical cost and if we go to buy the same assets in present time , than we need to pay the Current Market Value.