Question

1-The establishment of uniform accounting standards in the United States arose in response to the need to:

a*Return the trust within the market which had been lost due to false and incomplete information

b*Have all the companies that trade in the stock market

c*Ensure that all countries in the world use the same accounting standards

2. The main objective of making financial reports is

a*Determine if loans or other credit obligations can be paid on time

b*Keep personal records separate from business records

c*Provide relevant and reliable information for external users

3. Assets are reported in the balance sheet

a*Those that are more liquid first

b*Net of depreciation expense

c*Net in relation to long-term liabilities or realizable value

4. When presenting a Balance Sheet using GAAP:

a*Capital is presented before liabilities

b*Investments are presented after liabilities

c*Non-current accounts are presented after checking accounts

5. In which of the following situations an income must be recognized

a*When the merchandise is sent to a consignment shop

b*When the merchandise is sent to the CEO's bank who is currently in bankruptcy protection

c*Tax preparation services are delivered and payment must be made within 3 days

6. A series of equal periodic payments that begins more than one period after the payment agreement is called:

a*An expired annuity

b*An ordinary annuity

c*A future annuity

7. Calculate the cost of the equipment that would be reported in the balance sheet based on the following information:

Cost of equipment $ 100,000

Cost of equipment shipping costs $ 5,000

Electric cost of installing the equipment $ 2,000
Increase in the market value of the equipment from the day of purchase $ 3,000

a*$ 105,000

b*$ 107,000

c*$ 110,000

8. The gross profit method and the retail inventory method

a*Both are estimates of the final inventory and the cost of products sold

b*Both use the lowest cost or fair market value of the inventory in their calculations

c*Both use the present value of future cash flows.

9. The calculation of a simple interest for an investment of $ 100,000 at an interest of 6% for 5 years would be

a*Less than compound interest

b*The same amount under simple and compound interest rates, since the amount is less than $ 125,000

c*The same amount under simple and compound interest rates, since the amount is less than $ 155,000

10. When you prepare the current assets section of the balance sheet under GAAP you see that two of the balance sheets of the bank accounts are negative. Where would you look to determine how these balances should be reported?

a*Rules and procedures of the American Banking Association

b*FASB coding system

c*IFRS pronouncements since negative balances are currently passive

d*None of the above since the balance sheets should be grouped in the balance sheet

11. Which of the following is not one of the steps for the ethical decision analysis model:

a*Identify the consequences of each possible course of action

b*determine the facts within the situation.

c*Consult with the review board (ethics review board) of AICPA

11. Which of the following is not one of the steps for the ethical decision analysis model:

a*Identify the consequences of each possible course of action

b*determine the facts within the situation.

c*Consult with the review board (ethics review board) of AICPA

Answer 1

according to policy first four questions will be answered

1. c*Ensure that all countries in the world use the same accounting standards ( this was done to promote international trade and simplify recording of business transactions)

2. c*Provide relevant and reliable information for external users (internal stakeholders like employees, management may easily get the information regarding the financial performance of the company because they exist in the internal enviorment but financial report is only through which external stakeholders such as suppliers, investors, shareholders, etc get information regarding the company's financial performance).

3.a*Those that are more liquid first ( assets are recored in the balance sheet in order of their liquidity and thus current assets are recorded first)

4. c*Non-current accounts are presented after checking accounts (because checking accounts are very liquid and thus part of current accounts).