1. Eagle Co. has cosigned the mortgage note on the home of its president, guaranteeing the indebtedness in the event that the president should default. Eagle considers the likelihood of default to be remote. How should the guarantee be treated in Eagle’s financial statements?
(a) Disclosed only.
(b) Accrued only.
(c) Accrued and disclosed.
(d) Neither accrued nor disclosed.
2. APB Opinion No. 28, “Interim Financial Reporting,” concluded that interim financial reporting should be viewed primarily in which of the following ways?
(a) As useful only if activity is spread evenly throughout the year.
(b) As if the interim period were an annual accounting period.
(c) As reporting for an integral part of an annual period.
(d) As reporting under a comprehensive basis of accounting other than GAAP.