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When a firm sells a trading security, it recognizes A

Accounting

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1. When a firm sells a trading security, it recognizes
   A. amortizes any difference between the acquisition cost and maturity value as interest revenue over the life of the debt.
   B. amortizes any difference between the acquisition cost and maturity value as interest revenue over the life of the debt.
   C. the average of the selling price and the book value as a gain or loss in measuring net income.
   D. the difference between the selling price and the book value as a gain or loss in measuring net income.
2. Expenditures included in the cost of a long-lived asset are
   A. intangible
   B. capitalized
   C. charged off
   D. expensed
3. For U.S. GAAP, software development costs are capitalized as intangible assets
   A. once the product is introduced into the marketplace.
   B. from the beginning of development
   C. once the technological feasibility of the product is established.
   D. after a copyright is obtained
4. goodwill represents:
   A. the synergies that will be achieved through the acquisition.
   B. the difference between the acquisition cost and the book value of the identifiable assets and liabilities.
   C. the difference between the acquisition cost and the market value of the identifiable assets and liabilities.
   D. the merger premium
5. The method used to account for oil and gas exploration costs that capitalizes the exploration costs of all unsuccessful exploratory wells is the
   A. successful efforts approach
   B. reserve recognition accounting
   C. soft asset approach
   D. full-cost approach
6. Which of the following terms is least consistent with the allocation of costs using a rational and systematic method?
   A. amortization
   B. upward revaluation
   C. depreciation
   D. depletion
7. Focus Company's accounting manager decided to start capitalizing the company's routine repairs and maintenance expense, starting in 2011. What effect will this change have on the company's 2012 income and assets respectively?
   A. understate, overstate
   B. overstate, understate
   C. understate, understate
   D. overstate, overstate
8. A company would need to record an impairment loss for its equipment when
   A. the cash flows from the equipment are less than its fair value.
   B. the original cost of the equipment exceeds its fair value and is deemed not recoverable.
   C. the carrying amount of the equipment exceeds its fair value and is deemed not recoverable.
   D. management determines that the equipment will no longer be used.
9. When a foreign entity has the foreign currency as its functional currency, it uses which exchange rate to translate revenues and expenses in the income statement?
   A. the end of the period exchange rate
   B. the average exchange rate during the period
   C. the exchange rate on the date of the asset or liability was obtained
   D. the historical exchange rate
10. Which of the following items would be charged to the cost of land rather than the cost of the building?
    A. capitalization of interest financing charges
    B. architectural fees
    C. cost of foundation
    D. demolition of existing structure