37.
Award: 10.00 points
An investor provides a company with $105,000 of cash by purchasing stock at the end of 2022, receives $1,800 of dividends from the company during
2023, and sells the ownership interest at the end of 2023 for $122,100. What is the rate of return that will be generated for 2023?
Cannot be determined from the information supplied.
17%
1%
18%
Share price appreciation = $122,100 − $105,000 = $17,100
Rate of return = ($1,800 dividends + $17,100 share price appreciation) ÷ $105,000 initial investment = 18%
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
38.
Award: 10.00 points
An investor provides a company with $100,000 of cash by purchasing stock at the end of 2022, receives $1,000 of dividends from the company during
2023, and sells the ownership interest at the end of 2023 for $120,000. What is the rate of return that will be generated for 2023?
21%
20%
Cannot be determined from the information supplied.
1%
Share price appreciation = $120,000 − $100,000 = $20,000
Rate of return = ($1,000 dividends + $20,000 share price appreciation) ÷ $100,000 initial investment = 21%
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-01 Describe the function and primary focus
of financial accounting.
39.
Award: 10.00 points
Which of the following was the first private-sector entity that set accounting standards in the United States?
Accounting Principles Board
Committee on Accounting Procedure
Financial Accounting Standards Board
AICPA
References
Multiple Choice Difficulty: 2 Medium Learning Objective: 01-03 Define generally accepted accounting
principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and
international standards.
40.
Award: 10.00 points
Which of the following does not provide guidance about GAAP for companies that are publicly listed on a stock exchange?
FASB
IASB
GASB
EITF
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-03 Define generally accepted accounting
principles (GAAP) and discuss the historical development of
accounting standards, including convergence between U.S. and
international standards.
41.
Award: 10.00 points
Porite Company recognizes revenue in the period in which it records an asset for the related account receivable, rather than in the period in which the
account receivable is collected in cash.
Porite's practice is an example of:
Accrual accounting.
Economic entity.
The matching principle.
Cash basis accounting.
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-02 Explain the difference between cash
and accrual accounting.
42.
Award: 10.00 points
Which of the following is not a potential benefit of accrual accounting, compared to cash-basis accounting?
Better reflecting economic activity
Timeliness
Better matching of revenues and expenses
Periodicity
References
Multiple Choice Difficulty: 1 Easy Learning Objective: 01-02 Explain the difference between cash
and accrual accounting.
43.
Award: 10.00 points
In a recent annual report, Apple Computer reported the following in one of its disclosure notes: "Warranty Expense: The Company provides currently for
the estimated cost for product warranties at the time the related revenue is recognized." This note exemplifies Apple's use of:
Matching.
Economic entity.
Conservatism.
Revenue recognition.
References
Multiple Choice Learning Objective: 01-07
Identify the objective and
qualitative characteristics of
financial reporting information
and the elements of financial
statements.
Learning Objective: 01-09 Describe the recognition,
measurement, and disclosure concepts that guide accounting
practice.
Difficulty: 2 Medium Learning Objective: 01-08
Describe the four basic
assumptions underlying GAAP.
44.
Award: 10.00 points
GAAP is an abbreviation for:
Generally authorized accounting procedures.
Generally accepted accounting principles.
Generally accepted auditing practices.
Generally applied accounting procedures.
References