ACCT 304 Intermediate Accounting I Week 8 Final Exam Answers

1. (TCO 1) The FASB's standard-setting process includes, in the correct order, (Points : 6)

2.  (TCO 1) The International Accounting Standards Board (Points : 6)

3. (TCO 2) The conceptual framework's qualitative characteristic of relevance includes (Points : 6)

4. (TCO 2) Enhancing qualitative characteristics of accounting information include (Points : 6)

5.  (TCO 3) Incurring an expense for advertising on an account would be recorded by (Points : 6)

6. (TCO 3) Accruals occur when cash flows (Points : 6)

7. (TCO 4) Which of the following accounts is not a current asset account? (Points : 6)

8. (TCO 4) Rent collected in advance is (Points : 6)

9. (TCO 5) Popson Inc. incurred a material loss that was not unusual in character but was clearly an infrequent occurrence. This loss should be reported as (Points : 6)

10. (TCO 5) On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2012. The following additional facts pertain to the transaction: 
     
    •The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations.
    •The book value of Footwear's assets totaled $48 million on the date of the sale. 
    •Footwear's operating income was a pre-tax loss of $10 million in 2012.
    •Foxtrot's income tax rate is 40%.
     
    In the 2012 income statement for Foxtrot Co., which of the following would it would report? (Points : 6)

11. (TCO 8) An argument against the use of LCM is its lack of (Points : 6)