Question 1 (1 point) The following trial balance of Flip Corp. at December 31, year 1, has been adjusted except for income tax expense. Account Debit Credit Cash $600,000 Accounts Receivable, net 3,500,000 Cost in excess of billings on long-ter contracts 1,600,000 Billings in excess of cost on long-term   contracts $700,000 Prepaid taxes 450,000 Property, plant, and equipment, net 1,480,000 Notes Payable, noncurrent 1,620,000 Common Stock 750,000 Additional Paid In Capital 2000,000 Retained Earnings - unappropriated 900,000 Retained Earnings - restricted for Notes Payable 160,000 Earning from long-term contracts 6,680,000 Cost and Expenses 5,180,000 ________        Totals $12,810,000 $12,810,000 Other financial data for the year ended December 31, year 1, are Flip uses the percentage-of-completion method to account for long-term construction contracts for financial statement and income tax purposes. All receivables on these contracts are considered to be collectible within twelve months. During year 1, estimated tax payments of $450,000 were charged to prepaid taxes. Flip has not recorded income tax expense. There were no temporary or permanent differences, and Flip's tax rate is 30%. In Flip's December 31, year 1 balance sheet, what amount should be reported as total noncurrent liabilities? Question 1 options: $2,480,000 $1,780,000 $1,620,000 $2,320,000 Save Question 2 (1 point) The following trial balance of Flip Corp. at December 31, year 1, has been adjusted except for income tax expense. Account Debit Credit Cash $600,000 Accounts Receivable, net 3,500,000 Cost in excess of billings on long-ter contracts 1,600,000 Billings in excess of cost on long-term   contracts $700,000 Prepaid taxes 450,000 Property, plant, and equipment, net 1,480,000 Notes Payable, noncurrent 1,620,000 Common Stock 750,000 Additional Paid In Capital 2000,000 Retained Earnings - unappropriated 900,000 Retained Earnings - restricted for Notes Payable 160,000 Earning from long-term contracts 6,680,000 Cost and Expenses 5,180,000 ________        Totals $12,810,000 $12,810,000 Other financial data for the year ended December 31, year 1, are Flip uses the percentage-of-completion method to account for long-term construction contracts for financial statement and income tax purposes. All receivables on these contracts are considered to be collectible within twelve months. During year 1, estimated tax payments of $450,000 were charged to prepaid taxes. Flip has not recorded income tax expense. There were no temporary or permanent differences, and Flip's tax rate is 30%. In Flip's December 31, year 1 balance sheet, what amount should be reported as total current assets? Question 2 options: $6,150,000 $5,700,000 $5,450,000 $5,000,000 Save Question 3 (1 point) Flip, Inc. was incorporated on January 1, year 1, with proceeds from the issuance of $750,000 in stock and borrowed funds of $110,000. During the first year of op ...

1. Question 1 (1 point)
The following trial balance of Flip Corp. at December 31, year
1, has been adjusted except for income tax expense.
Account
Debit
Credit
Cash
$600,000
Accounts Receivable, net
3,500,000
Cost in excess of billings on long-ter contracts
1,600,000
Billings in excess of cost on long-term contracts
$700,000
Prepaid taxes
450,000
Property, plant, and equipment, net
1,480,000
Notes Payable, noncurrent
1,620,000
Common Stock
750,000
Additional Paid In Capital

2. 2000,000
Retained Earnings - unappropriated
900,000
Retained Earnings - restricted for Notes Payable
160,000
Earning from long-term contracts
6,680,000
Cost and Expenses
5,180,000
________
Totals
$12,810,000
$12,810,000
Other financial data for the year ended December 31, year 1, are
Flip uses the percentage-of-completion method to account for
long-term construction contracts for financial statement and
income tax purposes. All receivables on these contracts are
considered to be collectible within twelve months.
During year 1, estimated tax payments of $450,000 were
charged to prepaid taxes. Flip has not recorded income tax
expense. There were no temporary or permanent differences,
and Flip's tax rate is 30%.
In Flip's December 31, year 1 balance sheet, what amount
should be reported as total noncurrent liabilities?
Question 1 options:
$2,480,000
$1,780,000

3. $1,620,000
$2,320,000
Save
Question 2 (1 point)
The following trial balance of Flip Corp. at December 31, year
1, has been adjusted except for income tax expense.
Account
Debit
Credit
Cash
$600,000
Accounts Receivable, net
3,500,000
Cost in excess of billings on long-ter contracts
1,600,000
Billings in excess of cost on long-term contracts
$700,000
Prepaid taxes
450,000
Property, plant, and equipment, net
1,480,000
Notes Payable, noncurrent
1,620,000
Common Stock

4. 750,000
Additional Paid In Capital
2000,000
Retained Earnings - unappropriated
900,000
Retained Earnings - restricted for Notes Payable
160,000
Earning from long-term contracts
6,680,000
Cost and Expenses
5,180,000
________
Totals
$12,810,000
$12,810,000
Other financial data for the year ended December 31, year 1, are
Flip uses the percentage-of-completion method to account for
long-term construction contracts for financial statement and
income tax purposes. All receivables on these contracts are
considered to be collectible within twelve months.
During year 1, estimated tax payments of $450,000 were
charged to prepaid taxes. Flip has not recorded income tax
expense. There were no temporary or permanent differences,
and Flip's tax rate is 30%.
In Flip's December 31, year 1 balance sheet, what amount
should be reported as total current assets?
Question 2 options:

5. $6,150,000
$5,700,000
$5,450,000
$5,000,000
Save
Question 3 (1 point)
Flip, Inc. was incorporated on January 1, year 1, with proceeds
from the issuance of $750,000 in stock and borrowed funds of
$110,000. During the first year of operations, revenues from
sales
and consulting amounted to $82,000, and operating costs and
expenses totaled $64,000. On December 15, Flip declared a
$3,000 cash dividend, payable to stockholders on January 15,
year
2. No additional activities affected owners' equity in year 1.
Flip's liabilities increased to $120,000
by December 31, year 1. On Flip's December 31, year 1 balance
sheet, total assets should be
reported at current assets?
Question 3 options:
$885,000
$882,000
$878,000
$875,000
Save
Question 4 (1 point)

6. When preparing a draft of its year 1 balance sheet, Flip, Inc.
reported net assets totaling $875,000. Included in the asset
section of the balance sheet were the following:
Treasury Stock of Flip, Inc at cost, which approximates market
value on December 31
$24,000
Idle machinery
11,200
Sash surrender value o life insurance on corporate executives
13,700
Allowance for decline in market value of noncurrent equity
investments
8,400
At what amount should Flip's net assets be reported in the
December 31, year 1 balance sheet?
Question 4 options:
$850,100
$834,500
$851,000
$842,600
Save
Question 5 (1 point)
In analyzing a company's financial statements, which financial
statement would a potential investor primarily use to assess the
company's liquidity and financial flexibility?
Question 5 options:
Balance sheet

7. Income statement.
Statement of cash flows.
Statement of retained earnings.
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Question 6 (1 point)
Flip Co. acquired 100% of Flop Corp. prior to year 2. During
year 2, the individual companies included in their financial
statements the following:
Flip
Flop
Officers' salaries
$ 75,000
$50,000
Officers' expenses
20,000
10,000
Loans to officers
125,000
50,000
Intercompany sales
150,000
--
What amount should be reported as related-party disclosures in
the notes to Flip's year 2 consolidated financial statements
Question 6 options:
$330,000
$175,000

8. $150,000
$155,000
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Question 7 (1 point)
Flop Co. has entered into a joint venture with an affiliate to
secure access to additional inventory. Under the joint venture
agreement, Flop will purchase the output of the venture at
prices negotiated on an arm's-length basis. Which of the
following is(are) required to be disclosed about the related-
party transaction?
I. The amount due to the affiliate at the balance sheet date.
II. The dollar amount of the purchases during the year.
Question 7 options:
I only.
II only.
Both I and II.
Neither I nor II.
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Question 8 (1 point)
What is the purpose of information presented in notes to the
financial statements?
Question 8 options:
To correct improper presentation in the financial statements.
To present management's responses to auditor comments.

9. To provide disclosures required by generally accepted
accounting principles.
To provide recognition of amounts not included in the totals of
the financial statements.
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Question 9 (1 point)
Which of the following information should be included in Flop,
Inc.'s year 1 summary of significant accounting policies?
Question 9 options:
Business component year 1 sales are Alpha $1M, Beta $2M, and
Charlie $3M.
Property, plant, and equipment is recorded at cost with
depreciation computed principally by the straight-line method.
Future common share dividends are expected to
approximate 60% of earnings.
During year 1, the Delta component was sold.
Save
Question 10 (1 point)
Which of the following information should be disclosed in the
summary of significant accounting policies?
Question 10 options:
Guarantees of indebtedness of others.
Criteria for determining which investments are treated as cash
equivalents.

10. Refinancing of debt subsequent to the balance sheet date.
Adequacy of pension plan assets relative to vested benefits.
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Question 11 (1 point)
Flop Corp. prepares its financial statements for its fiscal year
ending December 31, year 1. Flop estimates that its product
warranty liability is $28,000 at December 31, year 1. On
February 12, year 2, before the financial statements were
issued, Flop received information about a product defect that
will require a recall of all units sold in year 1. It is expected the
product recall will cost an additional $40,000 in warranty
repairs. What should Flop present in its December 31, year 1
financial statements?
Question 11 options:
A footnote disclosure listing the estimated amount of $40,000 in
warranty repairs and an
explanation of the recall.
An estimated warranty liability of $68,000.
No disclosure is necessary.
A footnote disclosure explaining the product recall.
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Question 12 (1 point)
Flop Corp. has a fiscal year-end of December 31, year 1. On
that date, Flop reported total assets of $600,000. On February 1,
year 2, before the year 1 financial statements were issued, Flop
lost $250,000 of inventory due to a fire. The inventory was a
total loss and was uninsured. How should Flop present this

11. information in its December 31, year 1 financial statements?
Question 12 options:
should disclose the loss in a footnote to its
year 1 financial statements.
Flop should report an allowance for lost inventory in its year 1
balance sheet.
Flop should not report the loss.
Flop should report an extraordinary loss in its year 1 income
statement.
Save
Question 13 (1 point)
The fair value of an asset should be based upon
Question 13 options:
The replacement cost of an asset.
The price that would be received to sell the asset at the
measurement date under current market conditions.
The price that would be paid to acquire the asset.
The original cost of the asset plus an adjustment for
obsolescence.
Save
Question 14 (1 point)
Which of the following describes a principal market for
establishing fair value of an asset?
Question 14 options:

12. The market that has the greatest volume and level of activity for
the asset.
Any broker or dealer market that buys or sells the asset.
The market in which the amount received would be maximized.
The most observable market in which the price of the asset is
minimized.
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Question 15 (1 point)
Which of the following is true for valuing an asset to fair value?
Question 15 options:
The price should be adjusted for transportation costs to
transport the asset to its principal market.
The fair value price is based upon an entry price to purchase the
asset.
The fair value of the asset should be adjusted for costs to sell.
The price of the asset should be adjusted for transaction costs.
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Question 16 (1 point)
Which of the following would meet the qualifications as market
participants in determining fair value?
Question 16 options:
A subsidiary of the reporting unit interested in purchasing
assets similar to those being valued.

13. An independent entity that is knowledgeable about the asset.
A liquidation market in which sellers are compelled to sell.
A broker or dealer that wishes to establish a new market for the
asset.
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Question 17 (1 point)
The fair value of an asset at initial recognition is
Question 17 options:
The price paid to transfer or sell the asset.
The price paid to acquire the asset.
The price paid to acquire the asset less transaction costs.
The book value of the asset acquired.
Save
Question 18 (1 point)
Which of the following is not a valuation technique used in fair
value estimates?
Question 18 options:
Market approach.
Cost approach.
Residual value approach.
Income approach.

14. Save
Question 19 (1 point)
The market approach valuation technique for measuring fair
value requires which of the following?
Question 19 options:
The weighted-average of the present value of future cash flows.
The price to replace the service capacity of the asset.
Present value of future cash flows.
Prices and other relevant information of transactions from
identical or comparable assets.
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Question 20 (1 point)
A change in valuation techniques used to measure fair value
should be reported as
Question 20 options:
A change in accounting principle with retrospective
restatement.
An extraordinary item on the current year's income statement.
. An error correction with restatement of the financial
statements of previous periods.
A change in accounting estimate reported on a prospective
basis.
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Question 21 (1 point)

15. Which of the following are observable inputs used for fair value
measurements?
I. Bank prime rate.
II. Default rates on loans.
III. Financial forecasts.
Question 21 options:
I and III only.
I, II and III.
I only.
I and II only.
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Question 22 (1 point)
Which of the following best describes the content of the SEC
Form 10-Q?
Question 22 options:
Quarterly audited financial information and other information
about the company.
Quarterly reviewed financial information and other information
about the company.
Annual audited financial information and nonfinancial
information about the company.
Disclosure of material events that affect the company.
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Question 23 (1 point)

16. A company is required to file quarterly financial statements
with the United States Securities and Exchange Commission on
form 10-Q. The company operates in an industry that is not
subject to seasonal fluctuations that could have a significant
impact on its financial condition. In addition to the most recent
quarter-end, for which of the following periods is the company
required to present balance sheets on Form 10-Q?
Question 23 options:
The end of the preceding fiscal year and the end of the prior two
fiscal years.
The end of the preceding fiscal year.
The end of the corresponding fiscal quarter of
the preceding fiscal year.
The end of the preceding fiscal year and the end of the
corresponding fiscal quarter of the preceding fiscal years.
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Question 24 (1 point)
A company is an accelerated filer that is required to file Form
10-K with the United States Securities and Exchange
Commission (SEC). What is the maximum number of days after
the company's fiscal year-end that the company has to file Form
10-K with the SEC?
Question 24 options:
75 days.
120 days.

17. 90 days.
60 days.
Save
Question 25 (1 point)
Flop Inc is a publicly traded company. Recently, Flop entered
into a material long-term lease agreement. Which SEC form
discloses information about material events?
Question 25 options:
Form 8-K
Form 10-K
Form 10Q
Form S-1
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18
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20
21
2
22
23

18. 24
25
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1
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