Reference no: EM131793511

1. When accounting for income taxes, advocates of partial allocation argue that
A. permanent differences should be considered when calculating income tax expense
B. the valuation account for deferred tax assets is unnecessary
C. the amounts of deferred tax liabilities will not reverse as new future transactions will generate continuous deferred tax liabilities
D. individual temporary differences should be reported same period as the related transactions

2. Though not specifically stated, both APB Statement No. 4 and SFAC No. 6 have defined assets, liabilities, and equities in a manner consistent with proprietary theory. Proprietary theory depicts the accounting equation as
A. assets - liabilities = equity
B. assets = liabilities + equity
C. assets = equities
D. assets - equities = liabilities

3. The accounting for uncertain tax positions has been addressed by FIN 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109." Under FIN 48 the evaluation of a tax position is a two-step process. These steps are
A. measurement and evaluation
B. recognition and measurement
C. recognition and assessment
D. evaluation and assessment

4. Under troubled debt restructuring, when a creditor's restructured measurement of a loan is less than the current carrying value of the loan (prior to restructuring) they will record a(n)
A. extraordinary loss, net of tax
B. bad debt loss
C. contra-account to the loan as a valuation account
D. loan receivable for the difference between the carrying value of the loan (prior to restructuring) and restructured measurement of the loan

5. Unrealized holding gains and losses from equity securities classified as available-for-sale
A. are reported as extraordinary items, net of tax
B. are reported as other gains or losses
C. are reported not reported on the income statement
D. are reported as other comprehensive income

6. The measurement and reporting of stock options as an expense was one of the most politically debated topics since the inception of the CAP, APB, and FASB. The end result is that
A. there is no recognition of an expense until the stock options are exercised
B. there is only recognition of expense for stock options that have not been exercised and expired
C. there is recognition of expense only for stock options exercised in the same year they are granted
D. there is recognition of expense for stock options in the year they are granted

7. Among the competing theories related to the recording and reporting of accounting theory, the theory which views management and control as important components of the firm is the
A. commander theory
B. fund theory
C. enterprise theory
D. residual equity theory

8. One of the criticisms of the lower of cost or market rule for inventories is that it does not consider holding gains, only holding losses. A viewpoint to counter this criticism is
A. materiality
B. cost/benefit
C. conservatism
D. fair value