acct 252 review for 253

  1. Property, plant and equipment assets are to be initially recorded at what value?

    D. historical cost
  2. How are property, plant and equipment assets to be subsequently valued?

    B. net book vlaue less impairment loss (if any)
  3. What is meant by "impairment" as it relates to property, plant, and equipment assets?

    D. Carrying amount of an asset is greater than the recoverable amount
  4. The test to determine if property, plant and equipment assets are impaired includes which of the following?

    • D. carrying value of the asset minus the undiscounted future cash flows
    • from the use of the asset
  5. How do we compute the impairment loss?

    C. carrying value of the asset minus the fair value of the asset
  6. Construction costs, to be capitalized include which of the following items?

    • B. materials, labor, variable overhead, pro-rata share of fixed overhead
    • and capitalized interest cost
  7. What are the four steps involved in recording a disposal of an asset?

    • B. depreciation up-to-date, remove related cost & accumulated
    • depreciation, and record gain/loss as appropriate
  8. The two criteria which determine whether a gain or a loss is recorded in an exchange transaction are?

    C. commerical substance and receipt of cash
  9. Depreciation expense for similar assets might vary from company to company due to judgments related to?

    D. all of the above
  10. How should a change in estimated service lives of property, plant, and equipment assets should accounted for?

    C. in current and future periods
  11. Costs incurred internally to create intangibles are

    B. expensed as incurred
  12. Costs incurred to purchase intanglibles are

    B. capitalized
  13. Which of the following intangibles assets should not be amoritzed?

    D. indefinite life intangibles
  14. The intangible asset goodwill may be

    D. capitalized only when purchased
  15. Purchased goodwill should

    B. not be amortized
  16. The actual impairment loss on an intangible asset is the difference between the asset's

    C. carrying amount and its fair value
  17. Limited-life intangibles are reported at their

    A. carrying amount unless impaired
  18. Liabiliteis are

    • D. obligations (arising from past transactions) that will be paid (or
    • settled) in the future
  19. Which of the following is the proper way to report a gain contingency?

    C. as a disclosure only if the favorable outcome is probable
  20. Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting priniples?

    • D. amount of loss is reasonably estimable and occurrence of event is
    • probable
  21. Long-Term Debt

    A. have original maturity dates that are longer than one year
  22. The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the

    A. bond indenture
  23. The interest rate written in the terms of the bond indenture is known as the

    B. stated rate
  24. The rate of interest actually earned by bondholders is called the

    B. effective rate
  25. The amount of principle to be repaid at maturity is

    B. par value
  26. The amount of interest expense to be recorded on a bond is

    B. the carrying value times the effective interest rate
  27. A major advantage of the corporate form of organization

    E. both a & b
  28. The term used to describe the type of preferred stock whereby dividends not paid in any year must be paid in the futuer before dividends can be paid to the common shareholders

    D. cumulative
  29. The amount per share assigned by the corporate charter to each share of common stock is

    C. par value
  30. The amount received from a sale of stock by a c orporation that is in excess of par value or stated value of the stock sold

    D. additional paid-in capital
  31. The number of shares issued (or sold) less the number of shares reacquired but have not been cancelled or retired

    B. outstanding shares
  32. Held-to-maturity securities are (reported at) valued using the

    C. amortized cost method
  33. Trading securities are (reported at) valued using the

    D. fair value method
  34. available-for-sale securities are (reported at) valued using

    A. fair value method
  35. Securities representing more than a 20% ownership interest are (reported at) valued using the

    A. equity method
  36. An unrealized holding loss on a company's available-for-sale securities should be reflected in the current financial statements as

    • D. other comprehensive income and deducted in the equity section of the
    • balance sheet
  37. Byner Corporation accounts for its investment in the common stock of Yount Company under the equity method. Byner Corporation should ordinarily record a cash dividend received from Yount as

    A. a reduction of the carrying value of the investment
  38. Under the equity method of accounting for investments, an investor recognizes its shares of the investee's earnins as

    C. an addition to the carrying value of the investment
  39. Ownership is considered to be a controlling interest

    B. over 50% equity ownership
  40. Ownership is considered to be a significant interest

    A. 20% to 50% equity ownership
Card Set
acct 252 review for 253
acct 252 review for 253