FAR 무료 덤프문제 온라인 액세스

On January 2, 1993, Quo, Inc. hired Reed to be its controller. During the year, Reed, working closely with
Quo's president and outside accountants, made changes in accounting policies, corrected several errors
dating from 1992 and before, and instituted new accounting policies.
Quo's 1993 financial statements will be presented in comparative form with its 1992 financial statements.
This question represents one of Quo's transactions. List B represents the general accounting treatment
required for these transactions. These treatments are:
. Cumulative effect approach - Include the cumulative effect of the adjustment resulting from the
accounting change or error correction in the 1993 financial statements, and do not restate the 1992
financial statements.
. Retroactive or retrospective restatement approach - Restate the 1992 financial statements and adjust
1 992 beginning retained earnings if the error or change affects a period prior to 1992.
. Prospective approach - Report 1993 and future financial statements on the new basis but do not restate
1 992 financial statements.
Item to Be Answered
As a result of a production breakthrough, Quo determined that manufacturing equipment previously
depreciated over 15 years should be depreciated over 20 years.
List B (Select one)

• A.Cumulative effect approach.
• B.Prospective approach.
• C.Retroactive or retrospective restatement approach.

The following information pertains to Aria Corp. and its divisions for the year ended December 31, 1988:

Aria and all of its divisions are engaged solely in manufacturing operations. Aria has a reportable segment
if that segment's revenue exceeds:

• A.$204,000
• B.$264,000
• C.$260,000
• D.$200,000

Kell Corp.'s $95,000 net income for the quarter ended September 30, 1990, included the following aftertax
items:
. A $60,000 extraordinary gain, realized on April 30, 1990, was allocated equally to the second, third, and
fourth quarters of 1990.
. A $16,000 cumulative-effect loss resulting from a change in inventory valuation method was recognized
on August 2, 1990.
In addition, Kell paid $48,000 on February 1, 1990, for 1990 calendar-year property taxes. Of this amount,
$ 12,000 was allocated to the third quarter of 1990.
For the quarter ended September 30, 1990, Kell should report net income of:

• A.$115,000
• B.$111,000
• C.$103,000
• D.$91,000

According to the FASB conceptual framework, an entity's revenue may result from:

• A.A decrease in an asset from primary operations.
• B.An increase in an asset from incidental transactions.
• C.An increase in a liability from incidental transactions.
• D.A decrease in a liability from primary operations.

In general, an enterprise preparing interim financial statements should:

• A.Disregard permanent decreases in the market value of its inventory.
• B.Allocate revenues and expenses evenly over the quarters, regardless of when they actually occurred.
• C.Defer recognition of seasonal revenue.
• D.Use the same accounting principles followed in preparing its latest annual financial statements.