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单项选择题

At the beginning of 2007, Bryan’ s Bakery Company purchased a secret cookie recipe for $ 25000. In addition, Bryan developed a new cake recipe at a cost of $ 5000. Bryan expects to use both recipes indefinitely ; however, the useful (economic) life of similar recipes has been 10 years. Assuming straight-line amortization, what amount of recipe expense should Bryan report for the year ended 2007 and what amount should Bryan report as a tangible asset on its balance sheet at the end of 2007 Recipe expense Balance sheet（）①A. $ 7500 $ 22500 ②B. $ 3000 $ 27500 ③C. $ 7500 $ 0

A. ①
B. ②
C. ③

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单项选择题

A company has the following changes in its balance sheet accounts:（）

A．$500
B．$90
C．$56
单项选择题

The RR Corporation had cash flow from operations of $ 20 million. RR purchased $ 5 million in equipment and sold $ 3 million of equipment during the period. Cash flows from financing were $ 2 million. What is RR' s free cash flow for the period（）

A. $18.
B. $22.
C. $20.
单项选择题

All of the following are considered a potentially dilutive securities EXCEPT:（）

A. warrants.
B. preferred stock.
C. stock options.
单项选择题

An examination of the cash receipts and payments of Xavier Corporation reveals the following:（）

A．2000
B．5000
C．10000
单项选择题

When a reliable estimate of costs exists, ultimate payment is assured, and revenue is earned as costs are incurred. Which of the following revenue recognition methods should be used（）

A. Installment sales method.
B. Cost recovery method.
C. Percentage-of-completion method.
单项选择题

The following information is from the balance sheet of Silverstone Company: Net Income for 5/1/05 to 5/31/05 : $ 8000

A．Balance 5/01/05
B．Account
C．Balance 5/31/05
D．$2000
E．Inventory
F．$1750
G．$1200
H．Prepaid exp.
I．$1700
J．$800
K．Accum.Depr.
L．$975
M．$425
N．Accounts payable
O．$625
P．$650
Q．Bonds payable
R．$550
单项选择题

Which of the following would NOT be a component of cash flow from investing（）

A．Sale of land.
B．Purchase of securities.
C．Dividends paid.
单项选择题

Firebird Company reported the following financial information at the end of 2007 (in millions) :

A．Merchandise inventory
B．$240
C．Minority interest
D．70
E．Cash and equivalents
F．275
G．Accounts receivable
H．1150
I．Accounts payable
J．225
K．Property & equipment
L．2160
M．Accrued expenses
N．830
O．Current portion of long-term debt
P．120
Q．Long-term debt
R．1570
S．Retained earnings
T．4230
单项选择题

Which of the following is NOT a cash flow in the calculation of cash flow from operations（）

A．Dividends received.
B．Dividends paid.
C．Interest income.
单项选择题

The Beeline Company has the following balance sheet and income statement.（）

A．$50
B．$150
C．$ 210.
单项选择题

Assume that the exercise price of an option is $11, and the average market price of the stock is $16. Assuming 1039 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the Diluted EPS（）

A. 289.
B. 1039.
C. 325.
单项选择题

All of the following are cash flows from operations EXCEPT:（）

A. interest payments.
B. dividends paid to shareholders.
C. dividends received.
单项选择题

Under U.S. GAAP, land owned by the firm is most likely to be reported on the balance sheet at :（）

A. fair market value.
B. fair market value minus selling costs.
C. historical cost.
单项选择题

For the year ended December 31,2007, Challenger Company reported the following financial information :（）

A．$50000
B．$100000
C．$31000
单项选择题

Which of the following items is NOT found in the financing cash flow part of the statement of cash flows（）

A. Dividends paid.
B. Change in paid-in capital.
C. Change in retained earnings.
单项选择题

The category of items on the balance sheet that typically offers an analyst the best inlbrmation on a non-financial firm' s investing activities is:（）

A. current liabilities.
B. noncurrent liabilities.
C. noncurrent assets.
单项选择题

Assume that the exercise price of an option is $ 6, and the average market price of the stock is $10. Assuming 802 options are outstanding during the entire year, what is the number of shares to be added to the denominator of the Diluted EPS（）

A. 802.
B. 481.
C. 321.
单项选择题

Determine the cash flow from operations given the following table.（）

A．$35
B．$30
C．$25
单项选择题

Which revenue recognition method is used when the payment is assured and revenue is earned as costs are incurred（）

A. Installment sales method.
B. Completed contract method.
C. Percentage-of-completion method.
单项选择题

Securities that improve basic per share earnings, or reduce per share losses, if they are exercised or converted to common stock are called:（）

A. dilutive securities.
B. antidilutive securities.
C. contingent securities.
单项选择题

Which of the following activities would appear as a source of' funds on the Statement of Cash Flows（）

A. Inventory is increased.
B. A decrease in accounts payable.
C. Depreciation expense.
单项选择题

Peterson Painting Company is a commercial painting contractor. At the beginning of 20×7, Peterson' s net working capital was $ 350000. The following transactions occurred during 20×7 :

A．Performed services on credit
B．$150000
C．Purchased office equipment for cash
D．10000
E．Recognized salaries expense
F．54000
G．Purchased paint supplies on on credit
H．25000
I．Consumed paint supplies
J．20000
K．Paid salaries
L．50000
M．Collected accounts receivable
N．157000
O．Recognized straight-line depreciation expenses
P．2000
Q．Paid accounts payable
R．15000
单项选择题

Which of the following does NOT represent a cash fl0w relating to operating activity（）

A．Cash received from customers.
B．Interest paid to bondholders.
C．Dividends paid to stockholders.
单项选择题

Information related to Bledsoe Corporation's inventory, as of December 31,2007, follows:

A．Estimated selling price
B．$3500000
C．Estimated disposal costs
D．50000
E．Estimated completions
F．3000000
G．Original FIFO cost
H．3200000
I．Replacement cost
J．3300000
单项选择题

Which of the following items would NOT be included in cash flow from investing（）

A．Buying or selling a building.
B．Buying stock of a different company.
C．Selling stock of the company.
单项选择题

JME Construction always uses the percentage of completion method of recognizing revenue. During 2004 JME signs a contract in the amount of $10 million with the following data available:（）

A．300000
B．2200000
C．8800000
单项选择题

Cash collection is a critical event for income recognition under the: Cost-Recovery Method Installment Method（）①A. No Yes ②B. No No ③C. Yes Yes

A. ①
B. ②
C. ③
单项选择题

Depending on certain circumstance, revenue may be recognized:（）

A. when production is complete and as production occurs.
B. at the time of sale and when production is complete.
C. All of these choices are correct.
单项选择题

Given the following data what is the ending inventory value using the LIFO method（）

A．$2650.
B．$3650.
C．$3850.
单项选择题

Interest payments, either as part of a coupon payment or to creditors, are always considered which type of cash flow（）

A. Investing.
B. Operating.
C. Financing.
单项选择题

Based on the following information to answer questions：
BWT, Inc. shows the following data in its financial statements at the end of the year. Assume all securities were outstanding at the beginning of the year:
6.125% convertible bonds, convertible into 33 shares of common stock. Issue price $1000100 bonds outstanding.
6.25% convertible preferred stock, $100 par, 2315 shares outstanding. Convertible into 3.3 shares of common stock, Issue price $100. 8% convertible preferred stock, $100 par, 2572 shares outstanding. Convertible into 5 common shares, Issue price $ 80.
9986 warrants are outstanding with an exercise price of $ 38. Each warrant is convertible into 1 share of common. Average market price of common is $ 52.00 per share. Common shares outstanding at the beginning of the year were 40045.
Net income for the period was $ 200000 while the tax rate was 40%.
What were the preferred dividends paid this whole year（）

A. $ 35045.
B. $ 20576.
C. $ 14469.
单项选择题

For a manufacturing company and for a financial services company, is interest expense most likely classified as an operating or non-operating component of income Manufacturing Financial services（） ①A. Operating Operating ②B. Operating Non-operating ③C. Non-operating Operating

A. ①
B. ②
C. ③
单项选择题

The correct set of cash flow treatments as they relate to interest paid according to U. S. generally accepted accounting principles (GAAP) and International Accounting Standards (IAS) GAAP is : U.S. GAAP IAS GAAP（） ①A. CFO CFO or CFF ②B. CFF CFF ③C. CFO CFO

A. ①
B. ②
C. ③
单项选择题

In calculating the numerator for diluted Earnings Per Share, the dividends on convertible preferred stock are:（）

A. subtracted from earnings available to common shareholders without an adjustment for taxes.
B. added to earnings available to common shareholders with an adjustment for taxes.
C. added to earnings available to common shareholders without an adjustment for taxes.
单项选择题

Calculate the change in cash from the following items: Decrease in inventory $ 10 million Net income $ 60 million Repayment of long-term debt $ 20 million Increase in accounts receivable $15 million Purchase of new machinery $ 75 million Depreciation expense $15 million Sale of common stock $ 40 million Dividend expense $10 million（）①A. + $ 30 million. ②B. $ 30 million. ③C. + $ 5 million.

A. ①
B. ②
C. ③
单项选择题

The Widget Company had net income of $1 million for the period. There were 1 million shares of Widget common stock outstanding for the entire period. If there are 100000 options outstanding with an exercise price of $ 40, what is the diluted earnings per share for Widget common stock if the average price per share over the period was $ 50（）

A. $0.98.
B. $0.99.
C. $1.00.
单项选择题

Which of the following statements about the appropriate revenue recognition method to use, given the status of completion of the earning process and assurance of payment, is least likely correct Use the:（）

A. completed contract method when the firm cannot reliably estimate the outcome of the project.
B. cost recovery method when future cash collection is highly uncertain.
C. installment method when collectability of payments for a sale can be reasonably estimated.
单项选择题

When the cost of goods and services used are recognized as an expense in the same period that its generated revenue is recognized, which of the following principle (s) is/are being described（）

A. The matching principle for revenue and expense recognition.
B. The accrual and expense recognition principles.
C. The depreciation and accrual principles.
单项选择题

During 2000, Rory, Inc. , reported net income of $15000 and had 2000 shares of common stock outstanding for the entire year. Rory also had 2000 shares of 10% , $50 par value preferred stock outstanding during 2000. During 1998, Rory issued 100, $1000 par, 6% bonds for $100000. Each of these is convertible to 50 shares of common stock. The tax rate is 40%. Assuming these bonds are dilutive, basic earnings per share(EPS) and diluted EPS for Rory are closest to : Basic EPS Diluted EPS（）①A. $2.50 $0.71 ②B. $2.50 $1.23 ③C. $2.88 $0.71

A. ①
B. ②
C. ③
单项选择题

Based on the following information to answer questions：
BWT, Inc. shows the following data in its financial statements at the end of the year. Assume all securities were outstanding at the beginning of the year:
6.125% convertible bonds, convertible into 33 shares of common stock. Issue price $1000100 bonds outstanding.
6.25% convertible preferred stock, $100 par, 2315 shares outstanding. Convertible into 3.3 shares of common stock, Issue price $100. 8% convertible preferred stock, $100 par, 2572 shares outstanding. Convertible into 5 common shares, Issue price $ 80.
9986 warrants are outstanding with an exercise price of $ 38. Each warrant is convertible into 1 share of common. Average market price of common is $ 52.00 per share. Common shares outstanding at the beginning of the year were 40045.
Net income for the period was $ 200000 while the tax rate was 40%.
What was the after-tax interest charge（）

A. $ 6215.
B. $ 2450.
C. $ 3675.
单项选择题

Stanley Corp. had 100000 shares of common stock outstanding throughout 2004. It also had 20000 stock options with an exercise price of $ 20 and another 20000 options with an exercise price of $ 28. The average market price for the company’ s stock was $ 25 throughout the year. The stock closed at $ 30 on December 31,2004. What are the number of shares used to calculate diluted earnings per share for the year（）

A. 105000.
B. 110000.
C. 104000.
单项选择题

Napa Corp. sells one-year memberships to its Fine Wine Club for $180. Wine Club members each receive a bottle of white wine and a bottle of red wine, selected by the Club director, four times each year at the beginning of each quarter. To properly account for sales of Wine Club memberships, Napa will record:（）

A. an asset called prepaid sales.
B. a liability called accrued expenses.
C. a liability called unearned revenue.
单项选择题

A firm pays accrued wages with cash. Assuming a current ratio and a quid (acid test) ratio that are both greater than 1.0, what will be the impact on the current ratio, the quick ratio and net income Current ratio Quick ratio Net income（）①A. Decrease Decrease Decrease ②B. Decrease Increase Increase ③C. Increase Increase Stay the same

A. ①
B. ②
C. ③
单项选择题

Coleman Corporation’s unadjusted trial balance at the end of 2007 reflected compensation expense of $ 90 million. The trial balance did not include the following: Because of the holidays, no salary accrual was made for the last week of the year. Salaries for the last week totaled $ 3.5 million and were paid on January 4, 2008. Employee bonuses for 2007 totaled $ 5 million. The bonuses were paid on January 31,2008. Ignoring payroll taxes, what is Coleman’ s adjusted compensation expense for the year ended 2007 and what impact will the adjustment have on Coleman’ s 2007 current ratio Compensation expense Current ratio（）①A. $ 98.5 million Decrease ②B. $ 98.5 million No effect ③C. $ 94.5 million Decrease

A. ①
B. ②
C. ③
单项选择题

Young Distributors, Inc. issued convertible bonds two years ago, and those bonds are the only potentially dilutive security Young has issued. In 2005, Young’ s basic earnings per share (EPS) and diluted EPS were identical, but in 2004 they were different. Which of the following factors could NOT explain the difference between EPS and Diluted EPS The:（）

A. bonds were redeemed by Young Distributors at the beginning of 2005.
B. average market price of Young increased in 2005.
C. bonds were antidilutive in 2005 but not in 2004.
单项选择题

An analyst gathered the following data about a company: 1000 common shares are outstanding(no change during the year). Net income is $ 5000. The company paid $ 500 in preferred dividends. The company paid $ 600 in common dividends. The average market price of their common stock is $ 60 for the year. The company had 100 warrants(for one share each) outstanding for the entire year exercisable at $50. The company’ s diluted earnings per share is closest to:（）

A. $3.83.
B. $4.42.
C. $4.55.
单项选择题

Based on the following information to answer questions：
BWT, Inc. shows the following data in its financial statements at the end of the year. Assume all securities were outstanding at the beginning of the year:
6.125% convertible bonds, convertible into 33 shares of common stock. Issue price $1000100 bonds outstanding.
6.25% convertible preferred stock, $100 par, 2315 shares outstanding. Convertible into 3.3 shares of common stock, Issue price $100. 8% convertible preferred stock, $100 par, 2572 shares outstanding. Convertible into 5 common shares, Issue price $ 80.
9986 warrants are outstanding with an exercise price of $ 38. Each warrant is convertible into 1 share of common. Average market price of common is $ 52.00 per share. Common shares outstanding at the beginning of the year were 40045.
Net income for the period was $ 200000 while the tax rate was 40%.
How many new shares had to be issued to facilitate warrant conversion（）

A. 13665.
B. 9986.
C. 2689.
单项选择题

Which of the following statements about the analysis of cash flows is least accurate（）

A. Interest payments on debt are not a financing cash flow under U. S. GAAP.
B. Dividends received are an operating cash flow under U. S. GAAP.
C. Both the direct and indirect methods involve adding back noncash items such as depreciation and amortization.
单项选择题

Favor, Ine. ’ s capital and related transactions during 2005 were as follows: On January 1, $1000000 of 5-year 10 percent annual interest bonds were issued to Cover In-dustries in exchange for old equipment owned by Cover. On June 30, $ 50000 of interest was paid to Cover On July 1, the bonds were returned to Favor in exchange for $1500000 par value six percent preferred stock. On December 31, preferred stock dividends of $ 45000 were paid to Cover. Favor, Inc. ’s cash flow from financing (CFF) for 2005 (assume U. S. GAAP) is:（）

A. $95000.
B. $1045000.
C. $45000.
单项选择题

Does the Financial Accounting Standards Board require firms to disclose information about operating leases and detailed information about defined benefit pension plans in the financial statement footnotes Operating lease information Defined benefit pension plans（）①A. Yes No ②B. Yes Yes ③C. No Yes

A. ①
B. ②
C. ③
单项选择题

Which of the following transactions would least likely be reported in the cash flow statement as investing cash flows（）

A. Purchase of real estate with cash borrowed from a bank.
B. Sale of held-to-maturity securities for cash.
C. Purchase of plant and equipment used in the manufacturing process with financing provided by the seller.
单项选择题

An analyst gathered the following data about a company: The company had 500000 shares of common stock outstanding for the entire year. The company’ s beginning stock price was $40, its ending price was $ 60, and its average price is $ 50. The company has 120000 warrants outstanding for the entire year. Each warrant allowed the holder to buy one share of common stock at $ 45 per share. How many shares of common stock should the company use in computing its diluted earnings per share（）

A. 488000.
B. 500000.
C. 512000.
单项选择题

Based on the following information to answer questions：
BWT, Inc. shows the following data in its financial statements at the end of the year. Assume all securities were outstanding at the beginning of the year:
6.125% convertible bonds, convertible into 33 shares of common stock. Issue price $1000100 bonds outstanding.
6.25% convertible preferred stock, $100 par, 2315 shares outstanding. Convertible into 3.3 shares of common stock, Issue price $100. 8% convertible preferred stock, $100 par, 2572 shares outstanding. Convertible into 5 common shares, Issue price $ 80.
9986 warrants are outstanding with an exercise price of $ 38. Each warrant is convertible into 1 share of common. Average market price of common is $ 52.00 per share. Common shares outstanding at the beginning of the year were 40045.
Net income for the period was $ 200000 while the tax rate was 40%.
What were the Basic and Diluted EPS for the year Basic EPS Diluted EPS（）①A. $4.12 $2.95 ②B. $4.12 $3.06 ③C. $3.97 $3.06

A. ①
B. ②
C. ③
单项选择题

The net income for Miller Bat Company was $ 3 million for the year ended December 31,2004. Additional information is as follows: Depreciation on fixed assets $1500000 Gain from cash sales of land 200000 Increase in accounts payable 300000 Dividends paid on preferred stock 400000 The net cash provided by operating activities in the statement of cash flows for the year ended December 31,2004 is :（）

A. $ 4200000.
B. $ 4600000.
C. $ 4500000.
单项选择题

Which, if any, of the following statements about the installment sales method and cost recovery method is correct（）

A. The cost recovery method recognizes revenue and associated costs of goods sold only when cash is received, based on gross profit margin.
B. The installment sales method recognizes sales when cash is received, but no gross profit is recognized until all of the cost of goods sold is collected.
C. Neither statement is correct.
单项选择题

Which of the following institutions are federally-related institutions（）

A. Student Loan Marketing Association.
B. Government National Mortgage Association.
C. Federal National Mortgage Association.
单项选择题

Which of the following statements about revenue recognition methods is most accurate（）

A. The completed contract method recognizes revenue at the time of the sale.
B. The cost recovery method recognizes profit as cash is received.
C. The percentage of completion method recognizes profit corresponding to the costs incurred as a proportion of estimated total costs.
单项选择题

The Fischer Company had net income of $1500000. Fischer paid preferred dividends of $ 5 on each of the 100000 preferred shares. There are 1 million Fischer common shares outstanding. In addition to the common and preferred stock, Fischer has $ 25 million of 4 percent bonds outstanding. The face value of each bond is $1000. Each bond is convertible into 40 common shares. If Fischer’ s tax rate is 40 percent, determine its basic and diluted earnings per share Basic EPS Diluted EPS（）①A. $1.00 $1.25 ②B. $1.50 $1.25 ③C. $1.00 $0.80

A. ①
B. ②
C. ③
单项选择题

An analyst gathered the following data about a company: Collections from customers are $ 5000. Depreciation is $ 800. Cash expenses (including taxes) are $ 2000. Tax rate = 30%. Net cash increased by $1000. If inventory increases over the period by $ 800, cash flow from operations equals:（）

A. $1600.
B. $ 2400.
C. $ 3000.
单项选择题

Jodi Lein, small business consultant, is currently working with RJ Landscaping, a sole proprietorship. She is trying to educate the owner on the importance of monitoring cash flows. Operating information as of the end of the most recent month appears below: Cash from sale of truck of $ 7000. Cash salaries paid of $17000. Cash from customers of $ 45000. Depreciation expense of $ 5500. Interest on bank line of credit of $1000. Cash paid to suppliers of $ 22000. Other cash expenses, including rent, of $ 6300. No taxes due. Using this information, Lein calculates the cash flow from operations for the month at:（）

A. $ 1300.
B. $11200.
C. $300.
单项选择题

According to the Financial Accounting Standards Board, what is the appropriate balance sheet treatment for available-for-sale securities and where are the unrealized gains and losses reported Balance sheet Unrealized gains and losses（）①A. Fair value Net income ②B. Fair value Other comprehensive income ③C. Amortized cost Other comprehensive income

A. ①
B. ②
C. ③
单项选择题

Loose Truck, Inc. has cash of $100000, accounts receivable of $ 500000, and inventory of $ 400000. The firm has accounts payable of $ 200000, notes payable of $ 300000, and long-term debt of $ 200000. The firm wishes to increase its current ratio to 2.4. How much would current assets or current liabilities need to change in order to increase the current ratio to 2.4 Current assets Current liabilities（）①A. + $ 200000 $ 83333 ②B. + $200000 + $ 83333 ③C. + $ 680000 $ 83333

A. ①
B. ②
C. ③
单项选择题

To convert an indirect statement of cash flows to a direct basis, the analyst would:（）

A. add decreases in accounts receivables to net sales.
B. subtract customer cash advances from net sales.
C. subtract increases in accounts payable from the cost of goods sold.
单项选择题

Which of the following statements about cash flow is least likely correct Under U.S. GAAP, cash flow from:（）

A. operations includes cash operating expenses and changes in working capital accounts.
B. financing includes the proceeds of debt issued and from the sale of the company’ s common stock.
C. investing includes interest income from investment in debt securities.
单项选择题

When preparing cash flow statements using the direct method and the indirect method, an increase in accrued liabilities for rent during the year would result in what adjustment to "rent expense" recorded on the income statement Direct method Indirect method（） ①A. Increase Decrease ②B. Decrease Decrease ③C. Decrease Increase

A. ①
B. ②
C. ③
单项选择题

To convert an indirect statement of cash flows to a direct basis, the analyst would:（）

A. subtract write-offs of inventory advances from the cost of goods sold.
B. add increases in accounts receivables to net sales.
C. subtract decreases in accounts payable from the cost of goods sold.
单项选择题

Ascot Corporation has 4 million shares of common stock authorized, 2.4 million shares of common stock issued, and 1.8 million shares of common stock outstanding. How many shares of treasury stock does Ascot own and is the treasury stock reported as an asset in Ascot’ s balance sheet Treasury shares Reported as an asset（）①A. 600000 Yes ②B. 1.6 million No ③C. 600000 No

A. ①
B. ②
C. ③
单项选择题

In comparing two companies, an analytical team discovers Company A uses zero-coupon bonds for debt financing, while Company B uses par value coupon debt. Analyst 1 feels that Company A’ s operating cash flow should be reduced by the amount of its interest expense to compare it to Company B. Analyst 2 feels that Company B’ s operating cash flow should be increased by the amount of its interest expense to compare it to Company A. Analyst 3 feels that no adjustments should be made. Which analyst is taking appropriate action（）

A. Analyst 1.
B. Analyst 1 and Analyst 2.
C. Analyst 3.
单项选择题

Juniper Corp. has the following transactions in 2005. Juniper’ s equipment with a book value of $ 55000 was sold for $ 85000 cash. A parcel of land was purchased for $100000 worth of Juniper common stock. ABC company paid Juniper preferred dividends of $ 40000. Juniper declared and paid a $100000 cash dividend. Using the indirect method, what is cash flow from financing (CFF) for Juniper for 2005（）

A. $ 60000.
B. $100000.
C. $15000.
单项选择题

When the market value of an investment in a debt security is less than its carrying value, how should the investor report the investment on the balance sheet if the security is classified as held-to-maturity and what amount should be reported if the security is classified as available-for-sale Held-to-maturity Available-for-sale（）①A. Amortized cost Amortized cost ②B. Fair value Fair value ③C. Amortized cost Fair value

A. ①
B. ②
C. ③
单项选择题

Are the following statements about the par value of a firm’s common stock true or false Statement 1: Par value is a nominal dollar value assigned to shares of stock in a corporation’ s charter. Statement 2: The par value of common stock represents the amount the corporation received when the stock was issued. Statement 1 Statement 2（）①A. True True ②B. False False ③C. True False

A. ①
B. ②
C. ③
单项选择题

For the year ended December 31,2007, Milan Company reported the following financial information : Gross profit from sales 600000 Operating expenses 100000 Unrealized loss from foreign currency translation 30000 Dividends received from available-for-sale securities 15000 Increase in minimum pension liability 45000 Interest expense 25000 Acquired treasury stock for $ 25000 more than original book value 75000 Unrealized gain from available-sale-securities 20000 Ignoring taxes, calculate Milan’ s net income and comprehensive income for 2007. Net income Comprehensive income（）①A. $ 490000 $ 435000 ②B. $ 490000 $ 2000 ③C. $ 40000 $ 44000

A. ①
B. ②
C. ③
单项选择题

Galaxy Corporation manufactures custom motorcycles. Galaxy finances the motorcycles over 36 months for customers who make a minimum down payment of 10 percent. Historically, Galaxy has experienced bad debt losses equal to 1 percent of sales. Galaxy also provides a 24 month unlimited warranty on all new motorcycles. In the past, warranty expense has averaged 3 percent of sales. Ignoring taxes, how does the recognition of bad debt expense and warranty expense at the time of sale affect Galaxy’s liabilities Bad debt expense Warranty expense（）①A. No effect No effect ②B. Increase Increase ③C. No effect Increase

A. ①
B. ②
C. ③
单项选择题

To convert an indirect statement of cash flows to a direct basis, the analyst would:（）

A. subtract any depreciation that was included in the cost of goods sold.
B. subtract decreases in accounts receivables from net sales.
C. add decreases in inventory to the cost of goods sold.
单项选择题

What is the difference between the direct and the indirect method of calculating cash flow from operations（）

A. The indirect method starts with gross income and adjusts to cash flow from operations, while the direct method starts with gross profit and flows through the income statement to calculate cash flows from operations.
B. The direct method starts with sales and follows cash as it flows through the income statement, while the indirect method starts with net income and adjusts for non-cash charges and other items.
C. Balance sheet items are not included in the cash flow from operations for the direct method, while they are included for the indirect method.
单项选择题

A company has the following sequence of events regarding their stock: One million shares outstanding at the beginning of the year. On June 30th, they declared and issued a 10% stock dividend. On September 30th, they sold 400000 shares of common stock at par. Basic earnings per share at year-end will be computed on how many shares（）

A. 1600000.
B. 1000000.
C. 1200000.
单项选择题

When a firm recognizes revenue in excess of expenses on a product not covered by a warranty before cash is collected, what is the impact on the firm’s assets and liabilities, ignoring taxes Assets Liabilities（）①A. Increase Increase ②B. Increase No effect ③C. No effect No effect

A. ①
B. ②
C. ③
单项选择题

The primary difference between basic EPS and diluted EPS is that:（）

A. proprietors and partners report basic EPS but corporations report diluted EPS.
B. small firms report basic EPS but large firms(over $100 million in sales) must report diluted EPS.
C. diluted EPS includes the potential effects of convertible securities while basic EPS does not.
单项选择题

A software company pays a substantial amount of its compensation expense in the form of stock options. Without these options the company feels it will not be able to keep its key engineers. When adjusting for stock options, the EPS calculation is affected only when the stock price:（）

A. is less than the exercise price.
B. is greater than the exercise price.
C. is greater than the stock price at the end of the previous year.
单项选择题

At the beginning of 2007, Bryan’ s Bakery Company purchased a secret cookie recipe for $ 25000. In addition, Bryan developed a new cake recipe at a cost of $ 5000. Bryan expects to use both recipes indefinitely ; however, the useful (economic) life of similar recipes has been 10 years. Assuming straight-line amortization, what amount of recipe expense should Bryan report for the year ended 2007 and what amount should Bryan report as a tangible asset on its balance sheet at the end of 2007 Recipe expense Balance sheet（）①A. $ 7500 $ 22500 ②B. $ 3000 $ 27500 ③C. $ 7500 $ 0

A. ①
B. ②
C. ③
单项选择题

Pinto Corporation is an automobile manufacturer located in North America. Pinto owns a 5 percent interest in one of its suppliers, Continental Supply Company. Each year, Pinto receives a cash dividend from Continental. Pinto’ s engine supplier, National Supply Company, recently increased prices on goods sold to all customers due to higher labor costs. Should Pinto report the dividends received from Continental and the price increase from National as an operating or non-operating component on its year-end income statement Dividends received Price increase（）①A. Nonoperating Nonoperating ②B. Operating Operating ③C. Nonoperating Operating

A. ①
B. ②
C. ③
单项选择题

Bentlom Company’ s common sized financial statements show the following information: Earnings after taxes 15 % Current liabilities 20% Equity 45 % Sales $ 800 Cash 10% Total assets $ 2000 Accounts receivable 15% Inventory 20% Bentlom’ s long-term debt-to-equity ratio and current ratio are closest to. Long-term debt-to-equity ratio Current ratio（）①A. 77.8 % 2.25 ②B. 98.2% 2.50 ③C. 98.2% 2.25

A. ①
B. ②
C. ③
单项选择题

Bug-Be-Gone is a residential pest control company that offers a 12 month home-service contract to eliminate insect infestation. Customers are required to prepay for the service at the beginning of each year. If Bug-Be-Gone erroneously records these payments as revenue and include the estimated cost of performing the service, what is the most likely effect on the firm’ s liabilities and equity compared to the correct treatment Liabilities Equity（） ①A. Understated Overstated ②B. Overstated Overstated ③C. Understated Understated

A. ①
B. ②
C. ③
单项选择题

If Jackson Ski Company issues common stock, and uses the proceeds to purchase fixed assets such as equipment:（）

A. cash flow from financing would decrease and cash flow from investing would increase.
B. both cash flow from operations and cash flow from financing would decrease.
C. cash flow from financing would increase and cash flow from investing would decrease.
单项选择题

Which of the following is least likely a required financial statement disclosure according to the Financial Accounting Standards Board and the International Accounting Standards Board（）

A. A description of the entity including its domicile, legal form, and place of incorporation.
B. Judgments made in applying accounting policies that may have a significant effect on the amounts reported in the financial statements.
C. The liquidation values of equipment used in the production of goods and services for a firm that is expected to continue to operate in the foreseeable future.
单项选择题

An analyst gathers the following information: Net income $100 Decrease in accounts receivable 30 Depreciation 25 Increase in inventory 17 Increase in accounts payable 10 Decrease in wages payable 5 Increase in deferred taxes 17 Sale of fixed assets 150 Purchase of fixed assets 340 Profit from the sale of fixed assets 5 Dividends paid out 35 Sale of new common stock 120 Based on the above information, the company’s cash flow from operations is:（）

A. $155.
B. $165.
C. $175.
单项选择题

A company’ s financial statements show the following data for the latest year: Net sales $1250 Cost of goods sold 650 Increase in inventory 100 Decrease in MR 25 Increase in A/P 50 Cash interest paid 45 Dividends paid 25 Cash interest received 20 Sale of common stock 275 Retirement of long-term debt 125 Purchase of equipment 120 Income tax oaid 50 The company’ s cash flow from operations (CFO) and cash flow from financing (CFF) are closest to : CFO CFF（）① A. $500 $425 ②B. $500 $125 ③ $650 -$425

A. ①
B. ②
C. ③
单项选择题

Which of the following statements about accounting procedures and their impact on the statement of cash flows is least valid All else equal:（）

A. a nonprofitable company that uses LIFO to account for inventory will have higher total cash flow than a nonprofitable company that uses FIFO during a period of rising prices.
B. a company that finances through common stock issues may have the same cash flow from financing(CFF) as a firm that issues debt.
C. the cash flow from operations(CFO) for a company that has a capital lease will be overstated compared to that of a firm that has an operating lease.
单项选择题

A project has the following estimated revenues of $10.0 million and estimated costs are $ 7.5 million. The table below provides information on amounts billed, cash received, and cost incurred for each year of the 3-year project(data is in millions of dollars). Year1 Year2 Year3 Amounts billed 4.0 3.5 2.5 Cash received 2.0 5.0 3.0 Cost incurred 3.0 3.0 1.5 Which of the following statements relating to the cumulative balance sheet and income statement at year-end is least accurate（）

A. Using the accounting method that smooths income, the company will recognize profit of $ 0.5 million in year 3.
B. Considering this project only, and using the percentage of completion method, total assets at the end of year 3 will be $ 2.5 million.
C. If ultimate payment is assured and the cost estimates are unreliable, the company will recognize profit of $1 million in year 2.
单项选择题

GTO Corporation purchased all of the common stock of Charger Company for $ 4 million. At the time, Charger reported total assets of $ 3 million and total liabilities of $ 1 million. At the acquisition date, the fair value of Charger’ s assets was $ 3.5 million and the fair value of Charger’ s liabilities was $1.3 million. What amount of goodwill should GTO report as a result of the acquisition and is it necessary for GTO to amortize the goodwill Goodwill Amortization required（）①A. $1.8 million Yes ②B. $1.8 million No ③C. $ 2.2 million No

A. ①
B. ②
C. ③
单项选择题

An analyst gathered the following data about Bands Forever: In 2007 Bands Forever reported net income of $ 22500 and had 3000 shares of stock outstanding for the entire year. The company also had 1200 shares of 10% , $ 50 par value preferred stock outstanding for the entire year. The company had 50,10% coupon, $1000 par value bonds convertible into 50 shares of stock each, also outstanding for the entire year. The average market price of the stock for 2007 was $ 20. The tax rate is 40%. The convertible bonds are:（）

A. dilutive, with diluted earnings per share(EPS) of $ 2.45 versus basic EPS of $ 0.50.
B. dilutive, with diluted EPS of $ 3.55 versus basic EPS of $ 5.50.
C. antidilutive, with diluted EPS of $ 8.50 versus basic EPS of $ 7.50.
单项选择题

In the computation of diluted earnings per share(EPS) , common shares issued when convertible preferred stock is converted are added to the denominator of the equation, and the basic EPS numerator is adjusted by:（）

A. adding back convertible preferred stock dividends.
B. adding back non-convertible preferred stock dividends.
C. adding back non-convertible bond interest.
单项选择题

Which of the following statements about the percentage-of-completion and completed contract methods is FALSE The completed contract method will produce:（）

A. the same cash flows as that using the percentage-of-completion method.
B. smaller net worth and retained earnings than using the percentage-of-completion method.
C. greater net income in the periods before construction is completed, but not at the end of the contract, than using the percentage-of-completion method.
单项选择题

As of January 1, a company had 22500 $10 par value common shares outstanding. On July 1, the company repurchased 5000 shares. The company also has 11000,10% , $100 par value preferred shares. If the company’ s net income is $ 210000, its diluted earnings per share is closest to :（）

A. $5.00.
B. $7.50.
C. $10.00.
单项选择题

The following sequence’ of events involves a company’ s stock. The company: Had 100000 shares of common’ stock Outstanding at the beginning of the year. Issued 20000 shares of common Stock on June 1. Issued a 10% stock dividend on July 1. Issued 1000,10% bonds convertible into 21 shares of stock each, on September 1. Assuming the convertible bonds are dilutive, what is the weighted average number of shares that the company will use to compute its basic and diluted earnings per share Basic Diluted（）①A. 132000 129833 ②B. 122833 129833 ③C. 132000 146000

A. ①
B. ②
C. ③
单项选择题

Use the following data for Questions
Cash payments to supppliers
(114000)
Purchase of equipment
(68000)
Cash payment of dividends
(72000)
Purchase of land
(64000)
Cash payment for salary
(106000)
Sale of fixed assets
60000
Repurchase of common stock
(28000)
Cash collections from customers
200000
Cash payments of interest
(8000)
What is the cash flow from operations（）

A. 28000.
B. 20000.
C. 12000.
单项选择题

On January 1,2007, Omega Corporation paid $45000 to renew its property insurance for 3 years. What amount of insurance expense should Omega report for the year-ended December 31, 20×7 and what is the balance of Omega’ s prepaid insurance account on December 31,20×8 Insurance expense Prepaid insurance（）①A. $15000 $ 30000 ②B. $15000 $15000 ③C. $ 45000 $15000

A. ①
B. ②
C. ③
单项选择题

Use the following data for Questions
Cash payments to supppliers
(114000)
Purchase of equipment
(68000)
Cash payment of dividends
(72000)
Purchase of land
(64000)
Cash payment for salary
(106000)
Sale of fixed assets
60000
Repurchase of common stock
(28000)
Cash collections from customers
200000
Cash payments of interest
(8000)
What is the cash flow from investing（）

A. 132000.
B. 72000.
C. 52000.
单项选择题

Use the following data for Questions
Cash payments to supppliers
(114000)
Purchase of equipment
(68000)
Cash payment of dividends
(72000)
Purchase of land
(64000)
Cash payment for salary
(106000)
Sale of fixed assets
60000
Repurchase of common stock
(28000)
Cash collections from customers
200000
Cash payments of interest
(8000)
The cash flow from financing is:（）

A. 100.
B. 68.
C. 102.
单项选择题

Which of the following statements about the indirect method of calculating the statement of cash flows is least accurate（）

A. Depreciation is added back to net income because it is an expense not requiring cash.
B. No adjustment is needed to account for changes in accounts receivable because no cash is involved.
C. No adjustment is needed for the payment of taxes because the tax payment is already in net income.
单项选择题

Use the following financial data for Moose Printing Corporation to calculate the cash flow from operations (CFO) using the indirect method. Net income $ 225 Increase m accounts receivable 55 Decrease m inventory 33 Depreciation 65 Decrease in accounts payable 25 Increase m wages payable 15 Decrease m deferred taxes 10 Purchase of new equipment 65 Dividends paid 75（）

A. Increase in cash of $183.
B. Increase in cash of $ 173.
C. Increase in cash of $ 248.
单项选择题

The Better Building Company has a contract to build a building for $100 million. The estimate of the cost of the project is $ 75 million. In the first year of the project, BB had costs of $ 30 million. The Better Building Company’ s reported profit for the first year of the contract, using the percentage-of-completion method, is:（）

A. $0.
B. $15 million.
C. $10 million.
单项选择题

Which of the following statements about types of nonrecurring items is least accurate（）

A. Unusual or infrequent items are included in income from continuing operations.
B. Extraordinary items are unusual and infrequent items that are reported net of taxes and included in nonrecurring income from continuing operations.
C. Discontinued operations are reported net of taxes below income from continuing operations.
单项选择题

Where in the financial statements should a firm recognize the unrealized gains and losses on cash flow hedging derivatives and the unrealized gains and losses on available-for-sale securities Cash flow hedging derivatives Available-for-sale securities（）①A. Other comprehensive income Other comprehensive income ②B. Other comprehensive income Net income ③C. Net income Other comprehensive income

A. ①
B. ②
C. ③
单项选择题

Are the following essential characteristics of an asset Characteristic 1 : The asset provides future economic benefits as a result of past transactions. Characteristic 2: The asset is tangible and is obtained at a cost. Characteristic 1 Characteristic 2（）①A. Yes Yes ②B. Yes No ③C. No No

A. ①
B. ②
C. ③
单项选择题

Earlier this year, Slayton Corporation repurchased 5% of its total shares outstanding. At the time, the book value of Slayton shares exceeded their market value. The shares are expected to be reissued in the future when the market price of Slayton’ s stock increases. Do Slayton’ s repurchased shares continue to have voting rights and to pay cash dividends Voting rights Cash dividends paid（）①A. No Yes ②B. Yes No ③C. No No

A. ①
B. ②
C. ③
单项选择题

According to the Financial Accounting Standards Board, what is the appropriate measurement basis for equipment used in the manufacturing process and inventory that is held for sale Equipment Inventory（）①A. Historical cost Historical cost ②B. Fair value Lower of cost or market ③C. Historical cost Lower of cost or market

A. ①
B. ②
C. ③
单项选择题

According to U.S. Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS) GAAP, should dividends paid be treated as a cash flow from financing (CFF) or as a cash flow from operations (CFO) U.S. GAAP IAS GAAP（）①A. CFO CFF ②B. CFF CFO ③C. CFF CFF or CFO

A. ①
B. ②
C. ③
单项选择题

When using the indirect method for computing cash flow from operating activities, a change in accounts payable will require which of the following（）

A. A negative (positive) adjustment to net income when accounts payable increases (decreases ).
B. A positive (negative) adjustment to net income when accounts payable increases (decreases ).
C. A positive adjustment to net income regardless of whether accounts payable increases or decreases.
单项选择题

Are the following statements about copyrights and patents acquired from an independent third party, correct or incorrect Statement 1: Copyrights and patents are tangible assets that can be separately identified. Statement 2: Purchased copyrights and patents are amortized on a straight line basis over 30 years. Statement 1 Statement 2（）①A. Incorrect Correct ②B. Correct Incorrect ③C. Incorrect Incorrect

A. ①
B. ②
C. ③
单项选择题

Which of the following statements about dilutive securities is least likely correct（）

A. A simple capital structure is one that contains only common stock and antidilutive securities.
B. A complex capital structure is one that contains potentially dilutive securities.
C. A dilutive security is one that will cause earnings per share (EPS) to decrease if it is converted into common stock.
单项选择题

What is the impact on accounts receivable if sales exceed cash collections and what is the impact on accounts payable if cash paid to suppliers exceeds purchases Accounts receivable Accounts payable（） ①A. Increase Decrease ②B. Increase Increase ③C. Decrease Decrease

A. ①
B. ②
C. ③
单项选择题

Given the following information, what is the adjustment to net income when calculating cash flow from operations using the indirect method Increase in accounts payable of $ 25. Sold one share of stock for $15. Paid dividends of $10 to shareholders. Depreciation expense of $100. Increase in inventory of $ 20.（）

A. $50.
B. $95.
C. + $105.
单项选择题

A company reported the following for the year: Net sales $ 500 Increase in accounts receivable 20 Decrease in accounts payable 40 Increase in inventory 30 Sale of new common stock 100 Repayment of debt 10 Depreciation 2 Net income 100 Interest expense on debt 5 The company’s cash flow from operations(CFO) and cash flow from investing(CFI) are closest to ; CFO CFI（）①A. $12 $100 ②B. $12 $0 ③C. $92 $100

A. ①
B. ②
C. ③
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