We have sent an email with your new password.

Close this window

Acct425 Unit 2

43 Questions  I  By Lpalmer8
ACCT425 Unit 2
Chapters 6-10 

  
Changes are done, please start the quiz.


Question Excerpt

Removing question excerpt is a premium feature

Upgrade and get a lot more done!
1.  2. Regency Corp. recently acquired $500,000 of the bonds of Safire Co., one of its subsidiaries, paying more than the carrying  value of the bonds. According to the most practical view of this intra-entity transaction, to whom would the loss be attributed?
A.
B.
C.
D.
E.
2.  3. Where do dividends paid to the noncontrolling interest of a subsidiary appear on a consolidated statement of cash flows? 
A.
B.
C.
D.
E.
3.  4. Where do dividends paid by a subsidiary to the parent company appear in a consolidated statement of cash flows? 
A.
B.
C.
D.
E.
4.  5. Where do intra-entity sales of inventory appear in a consolidated statement of cash flows? 
A.
B.
C.
D.
E.
5.   Buckette Co. owned 60% of Shuvelle Corp. and 40% of Tayle Corp., and Shuvelle owned 35% of Tayle.   1a. When Buckette prepared consolidated financial statements, it should include 
A.
B.
C.
D.
E.
6.   Buckette Co. owned 60% of Shuvelle Corp. and 40% of Tayle Corp., and Shuvelle owned 35% of Tayle.     2. What is this pattern of ownership called?
A.
B.
C.
D.
E.
7.   Buckette Co. owned 60% of Shuvelle Corp. and 40% of Tayle Corp., and Shuvelle owned 35% of Tayle. 3. What percentage of Tayle's income is attributed to Buckette's ownership interest? 
A.
B.
C.
D.
E.
8.  5. In a tax-free business combination, 
A.
B.
C.
D.
E.
9.  8. Which of the following statements is true regarding the filing of income taxes for an affiliated group? 
A.
B.
C.
D.
E.
10.  2. Kaycee Corporation's revenues for the year ended December 31, 2012, were as follows:        Consolidated revenue per the income statement: $1,200,000        Upstream intersegment sales: $180,000        Downstream intersegment sales: $60,000 For purposes of the Revenue Test, what amount will be used as the benchmark for determining whether a segment is reportable?
A.
B.
C.
D.
E.
11.  1. Meisner Co. ordered parts costing §100,000 for a foreign supplier on May 12 when the spot rate was $.24 per stickle.      A one-month forward contract was signed on that date to purchase §100,000 at a forward rate of $.25 per stickle. On June 12,      when the parts were received and payment was made, the spot rate was $.28 per stickle.      At what amount should inventory be reported? 
A.
B.
C.
D.
E.
12.  2. Mills Inc. had a receivable from a foreign customer that is due in the local currency of the customer (stickles). On      December 31, 2010, this receivable for §200,000 was correctly included in Mills' balance sheet at $132,000. When the      receivable was collected on February 15, 2011, the U.S. dollar equivalent was $144,000. In Mills' 2011 consolidated income      statement, how much should have been reported as a foreign exchange gain? 
A.
B.
C.
D.
E.
13.  3. A spot rate may be defined as 
A.
B.
C.
D.
E.
14.  4. The forward rate may be defined as 
A.
B.
C.
D.
E.
15.  5. Which statement is true regarding a foreign currency option? 
A.
B.
C.
D.
E.
16.  6. A U.S. company sells merchandise to a foreign company denominated in U.S. dollars.     Which of the following statements is true? 
A.
B.
C.
D.
E.
17.  7. A U.S. company sells merchandise to a foreign company denominated in the foreign currency.     Which of the following statements is true? 
A.
B.
C.
D.
E.
18.  9. Which of the following approaches is used in the United States in accounting for foreign currency transactions? 
A.
B.
C.
D.
E.
19.  1. In accounting, the term translation refers to 
A.
B.
C.
D.
E.
20.  2. What is a company's functional currency? 
A.
B.
C.
D.
E.
21.  4. The translation adjustment from translating a foreign subsidiary's financial statements should be shown as 
A.
B.
C.
D.
E.
22.  5. Which accounts are translated using current exchange rates? 
A.
B.
C.
D.
E.
23.  8. Under the current rate method, common stock would be translated at what rate? 
A.
B.
C.
D.
E.
24.  9. Where is the disposition of a translation loss reported in the parent company's financial statements? 
A.
B.
C.
D.
E.
25.  Ch.6  1. An enterprise that holds a variable interest in a variable interest entity (VIE) is required to consolidate the assets, liabilities, revenues, expenses, and noncontrolling interest of that entity if: 
A.
B.
C.
D.
26.  Ch. 6 3. The parent company acquires all of a subsidiary's common stock but only 70 percent of its preferred shares. This preferred stock pays a 7 percent annual cumulative dividend. No dividends are in arrears at the current time. How is the noncontrolling interest's share of the subsidiary's income computed?
A.
B.
C.
D.
27.  Ch. 6 11. Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon's controlling interest while the remaining $35,000 was attributable to the noncontrolling interest. Mattoon has 100,000 shares of common stock outstanding and Effingham has 25,000 shares outstanding. Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should be reported as Mattoon's earnings per share?
A.
B.
C.
D.
28.  Ch. 7 1. In a father-son-grandson business combination, which of the following is true? 
A.
B.
C.
D.
29.  Ch. 7  4. Which of the following is correct for two companies that want to file a consolidated tax return as an affiliated group?
A.
B.
C.
D.
30.  Ch. 7  5. How does the amortization of tax-deductible goodwill affect the computation of a parent company's income taxes? 
A.
B.
C.
D.
31.  Ch. 7 11. Plumas, Inc., owns 85 percent of Santa Cruz Corporation. Both companies have been profitable for many years. During the current year, the parent sold for $100,000 merchandise costing $70,000 to the subsidiary, which still held 20 percent of this merchandise at the end of the year. Assume that the tax rate is 25 percent and that separate tax returns are filed. What deferred income tax asset is created? 
A.
B.
C.
D.
32.  Ch. 8  3. Which of the following operating segment disclosures is not required under current U.S. accounting guidelines?
A.
B.
C.
D.
33.  Ch. 8  4. In determining whether a particular operating segment is of significant size to warrant disclosure, which of the following is true? 
A.
B.
C.
D.
34.  Ch. 8  7. Which of the following is a criterion for determining whether an operating segment is separately reportable? 
A.
B.
C.
D.
35.  Ch. 8  9. Plume Company has a paper products operating segment. Which of the following items does it not have to report for this segment? 
A.
B.
C.
D.
36.  Ch 8  10. Which of the following items is required to be disclosed by geographic area? 
A.
B.
C.
D.
37.  Ch. 8  13. Which of the following information items with regard to a major customer must be disclosed? 
A.
B.
C.
D.
38.  Ch. 8  17. For interim financial reporting, an extraordinary gain occurring in the second quarter should be 
A.
B.
C.
D.
39.  Chapter 9 5. On July 1, 2013, Houghton Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2014. The note due on July 1, 2014. The note is denominated in euros. The U.S. dollar equivalent of the note principal is as follows:  Date                                                                              Amount July 1, 2013 (date borrowed)..................................... 195,000 December 31,2013 (Houghton's year-end)............ 220,000 July 1, 2014 (date repaid) .......................................... 230,000 In its 2014 income statement, what amount should Houghton include as a foreign exchange gain or loss on the note? 
A.
B.
C.
D.
40.  Chapter 9  8. A U.S. exporter has a Thai baht account receivable resulting from an export sale on April 1 to a customer in Thailand. The exporter signed a forward contract on April 1 to sell Thai baht and designated it as a cash flow hedge of a recognized Thai baht receivable.  The spot rate was .022 on that date, and the forward rate was .023. Which of the following did the U.S. exporter report in net income? 
A.
B.
C.
D.
41.  Chapter 10  2. In comparing the translation and the remeasurement process, which of the following is true? 
A.
B.
C.
D.
42.  Chapter 10 16. Which of the following items is not remeasured using historical exchange rates under the temporal method? 
A.
B.
C.
D.
43.  Chapter 10 20. Gains from remeasuring a foreign subsidiary's financial statements from the local currency, which is not the functional currency, into the parent's currency should be reported as a(n) 
A.
B.
C.
D.
Back to top

Removing ad is a premium feature

Upgrade and get a lot more done!
Take Another Quiz