Financial Reporting and Analysis: Using Financial Accounting Information 13th test bank

NAT:  BUSPROG: Communication           
STA:   AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP:   Traditional Assumptions of the Accounting Model             KEY:  Bloom's: Knowledge
NOT:  Time: 1 min.            
 
   26.   Which of these measurement attributes is not currently used in practice?
a.
Historical cost

b.
Relevant cost

c.
Current market value

d.
Current cost

e.
Present value

 
 
ANS:  B                    PTS:   1                    DIF:    Difficulty: Moderate 
NAT:  BUSPROG: Communication           
STA:   AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP:   Traditional Assumptions of the Accounting Model             KEY:  Bloom's: Knowledge
NOT:  Time: 1 min.            
 
   27.   The following data relate to Swift Company for the year ended December 31, 2012. Swift Company uses the accrual basis.
 
Sales on credit
$250,000

Cost of inventory sold on credit
170,000

Collections from customers
220,000

Purchase of inventory on credit
150,000

Payment for purchases
140,000

Selling expenses (accrual basis)
40,000

Payment for selling expenses
45,000

 
Which of the following amounts represents income for Swift Company for the year ended December 31, 2012?
a.
$60,000

b.
$50,000

c.
$40,000

d.
$35,000

e.
$30,000

 
 
ANS:  C                    PTS:   1                    DIF:    Difficulty: Easy        
NAT:  BUSPROG: Communication           
STA:   AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP:   Traditional Assumptions of the Accounting Model             KEY:  Bloom's: Application
NOT:  Time: 3 min.            
 
   28.   The following data relate to Rocket Company for the year ended December 31, 2012. Rocket Company uses the cash basis.
 
Sales on credit
$180,000

Cost of inventory sold on credit
130,000

Collections from customers
170,000

Purchase of inventory on credit
140,000

Payment for purchases
150,000

Selling expenses (accrual basis)
20,000

Payment for selling expenses
25,000

 
Which of the following amounts represents income for Rocket Company for the year ended December 31, 2012?
a.
$30,000

b.
$5,000 loss

c.
$40,000

d.
$45,000

e.
$50,000

 
 
ANS:  B                    PTS:   1                    DIF:    Difficulty: Easy        
NAT:  BUSPROG: Communication           
STA:   AICPA: FN: Measurement | ACBSP: GAAP | IMA: Financial Statement Analysis
TOP:   Traditional Assumptions of the Accounting Model             KEY:  Bloom's: Application
NOT:  Time: 3 min.            
 
   29.   The following data relate to Gorr Company for the year ended December 31, 2012. Gorr Company uses the accrual basis.