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1) The process of formally recording or incorporating an item in the financial statements of an entity is A

Accounting

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1) The process of formally recording or incorporating an item in the financial statements of an entity is

A.  allocation

B.  articulation.

C.  realization.

D.  recognition.

 

2) The primary purpose of the statement of cash flows is to provide information

A.  about the operating, investing, and financing activities of an entity during a period.

B.  that is useful in assessing cash flow prospects.

C.  about the cash receipts and cash payments of an entity during a period.

D.  about the entity's ability to meet its obligations, its ability to pay dividends, and its needs for external financing.

 

3) Which of the following is considered cash?

A.  Travel Advances

B.  Money market checking accounts

C.  Money market savings certificates

D.  Postdated checks

 

4) A company offers a cash rebate of $1 on each $4 package of batteries sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1 rebates are mailed to customers. Assuming there is no beginning liability balance, what is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?

 A.  $600,000; $600,000

 B.  $600,000; $390,000

 C.  $390,000; $390,000

 D.  $210,000; $390,000

 

5) Which of the following is a debt security?

A.  Convertible bonds

B.  Certificate of deposit

C.  Loans receivable

D.  US treasury bill

 

6) The balance in Newsprint Corp.'s foreign exchange loss account was $10,000 on December 31, 2008, before any necessary year-end adjustment relating to the following:

(1) Newsprint had a $15,000 debit resulting from the restatement in dollars of the accounts of its wholly owned foreign subsidiary for the year ended December 31, 2008.

(2) Newsprint had an account payable to an unrelated foreign supplier, payable in the supplier's local currency unit (LCU) on January 15, 2009. The U.S. dollar–equivalent of the payable was $50,000 on the December 1, 2008, invoice date and $53,000 on December 31, 2008.

In Newsprint's 2008 consolidated income statement, what amount should be included as foreign exchange loss in computing net income, if the LCU is the functional currency and the translation method is appropriate?

A.  $28,000

B.  $13,000

C.  $25,000

D.  $8,000