1) Costs incurred internally to create intangibles are A

1) Costs incurred internally to create intangibles are

A.  capitalized.

B.  capitalized if they have an indefinite life.

C.  expensed as incurred.

D.  expensed only if they have a limited life.

2) The amount to be recorded as the cost of an asset under capital lease is equal to the

A.  present value of the minimum lease payments.

B.  present value of the minimum lease payments or the fair value of the asset, whichever is lower.

C.  present value of the minimum lease payments plus the present value of any unguaranteed residual value.

D.  carrying value of the asset on the lessor's books.

3) In computations of weighted average of shares outstanding, when a stock dividend or stock split occurs, the additional shares are

A.  weighted by the number of days outstanding.

B.  weighted by the number of months outstanding.

C.  considered outstanding at the beginning of the year.

D.  considered outstanding at the beginning of the earliest year reported.

4) Debt securities that are accounted for at amortized cost, NOT fair value, are

A.  held-to-maturity debt securities.

B.  trading debt securities.

C.  available-for-sale debt securities.

D.  never-sell debt securities.

5) Company purchases inventory for $70,000 on March 19, 2008, and sells it to Graceland Corporation for $95,000 on May 14, 2008. Graceland still holds the inventory on December 31, 2008, and determines that its market value (replacement cost) is $82,000 at that time. Graceland writes the inventory down from $95,000 to its lower market value of $82,000 at the end of the year. Elvis owns 75% of Graceland. Based on this information, what amount of inventory should be eliminated in the consolidation workpaper for 2008?

A.  $15,000

B.  $14,000

C.  $12,000

D.  $13,000

6) Which of the following objectives is considered the cornerstone of financial reporting by a governmental entity?

A.  Accountability

B.  Budgetary compliance

C.  Interperiod equity

D.  Service efforts and accomplishments