41. Gomdejil (4) sing from a business combination is reported on the balance sheet as a(n): a. be iorwerted to cash within twelve months. b. besoriperted to cash within twelve months or one operating cycle if the operating cycle is longer than twelve montis. c. reinais on the books for at least twelve months. d. remaikpn the books for at least twelve months or one operating cycle if the operating cycle is longer than twelve r(100 nths. 43. Joe Barie, head accountant, is using the indirect method and the account balance from the balance sheet and income statement to prepare a statement of cash flows. He notices that the Retained Earnings account increased from the beginning of the year. This information is used to: a. increase cash flow from financing as it indicates receipt of payments from customers. b. decrease cash flow from investing as it indicates payment of debt. c. increase cash flow from operations as it signifies a net income. d. decrease cash flow from operations as it indicates a net loss. 44. Net property, plant and equipment are reported on the balance sheet at: a. current market value. b. historical cost. c. historical cost minus accumulated depreciation. d. net realizable value. 45. Current liabilities are reported on the balance sheet at: a. current market value. b. historical cost. c. discounted present value. d. future value. 46. Long-term debt is reported on the balance sheet at: a. current market value. b. net realizable value. c. present value. d. future value. 47. Balance sheets developed under US GAAP: a. may, but are not required to, list assets from most d. must list assets in alphabetical order. 48. Balance sheets prepared under IFRS: a. may list assets and liabilities from least liquid to most liquid. b. must list assets, but not liabilities in order of liquidity. c. must list assets and liabilities from least liquid to most liquid. d. must list liabilities, but not assets, from most to least liquid. 49. The Additional Paid-In Capital account is reported on the balance sheet at the a. current market value of the stock minus par value. b. original sales price of the stock minus the par value. c. net realizable value of the stock minus par value. d. discounted present value of the future dividends minus par value. 50. The Retained Earnings account is comprised of a. cash retained in the business. b. cash reinvested in the business by shareholders. c. the cumulative earnings less dividends since the inception of the corporation. d. the earnings of the corporation for the current year. 51. Which of the following represents a change in accounting principle? a. Adopting a new standard issued by FASB. b. Switching from a non-GAAP method to a GAAP method. c. Changing from one GAAP depreciation method to another GAAP method. d. Adjusting the Cost of Goods Sold account for the difference between the inventory balance and the inventory on hand. 52. Adoption of ASC Topic 606 related to revenue recognition represents a a. mandatory change in accounting principle. b. voluntary change in accounting principle. c. mandatory change in accounting estimate. d. voluntary change in accounting estimate. 53. Adoption of ASC Topic 842 related to leases represents a a. mandatory change in accounting estimate. b. voluntary change in accounting estimate. c. mandatory change in accounting principle. d. voluntary change in accounting principle. 54. Bertram Inc. purchased new state-of-the-art equipment. Its previously used equipment, which was recently retired, was depreciated over a useful (service) life of ten years. The firm's accounting manager continued reven a ten-year useful life. Two years after acquisition, an audit reveals that a th have been more appropriate. Addressing this issue represents a a. change in accounting principle. fisposing of one of the company's four subsidiaries. Purchasing 10% of the outstanding shares of a supplier. d. All of thoie (iD) wer choices are correct. b. on in tre f(3)le financial statements. b. in ter francial statement notes. d. In ttorionagement discussion and analysis section. a. Changen accounting principle that are only permitted when FASB issues a standard that revises GAAP b. Chang requires accounting principle that are always accounted for using the retrospective approach which c. Changesin accounting principle years' presented financial information. require both a restatement of prior years' financial information and the recorciog of a cumulative adjustment to retained earnings. d. Tax effests are ignored when reporting changes in accounting principles. 58. A cumulative effect of a change in an accounting principle is measured as a. the difference between prior periods' net income under the old method and what would have been reported if the new method had been used in the prior years. b. the after-tax difference between prior periods' net income under the old method and what would have been reported if the new method had been used in the prior years. c. the difference between prior periods' net income and current net income under the old method and what would have been reported if the new method had been used in the prior years and the current year. d. the after-tax difference between prior periods' net income and current net income under the old method and what would have been reported if the new method had been used in the prior years and the current year. 59. When using the retrospective approach for a change in accounting principle, disclosure rules require that a. income statements presented for comparative purposes be restated to reflect use of the new principle unless it prior years? b. all prior years' income stotements be restated to reflect use of the new principle, and include a pro forma net is impractical to do so. income figure of the previously reported income. c. no prior years' income statements be restated, but a pro fort the new principle for each year presented. d. no prior years' income statements be restated, and no profo 60. Which of the following items is not a type of accounting change? LIFO to FIFO. a. Change in accounting principles used; for exany. Rancial statements from individual financial stemancial information? 61. Which of the following is not correct with respect to ant anda economic activities of a company and its con asset. c. Analysts need to under a. Analysts must always be vigilant about the possibility that accounting distortions are present and comp the intermptation of financial ratios, percentage relations, and trend indices. c. a) ercentage of some base year number for each "base number." 1. Dercentage of some "base number" on the finame litem. (9) (0) (3) 0 Q 03. De financial statement reporting "filter" is a. OB C reporting regulations that vary from GAAP for publicly traded companies. b. Ci)C required reporting regulations for all entities. c. (1)nagement's distortion of accounting data. d. Management's discretion to choose alternative accounting procedures within GAAP 64. Which one of the following helps the analyst remove the effects of an information filter? a. Financial statements. b. SEC Form 10-K. c. Note disclosures in financial statements. d. Trend analysis. 65. Trend statements are better than common size statements at indicating which of the following? a. stability. b. monetary changes. c. profitability. d. growth and decline. 66. Which statement below is not correct with respect to a company's strategy? a. There are numerous strategies for achieving superior performance in any business. b. Developing customer loyalty while controlling costs are conflicting strategies. c. Low-cost leadership along with product and service differentiation create strategic advantage for companies. d. Strategy is never dependent upon the company's industry. 67. Earnings Before Interest (EBI) adjusts net income for which one of the following groups of items? a. Nonrecurring items, interest, and distortions related to accounting quality concerns. b. Nonoperating items, after-tax interest, and distortions related to accounting quality concerns. d. Nonrecurring items, nonrecurring items, and distortions related to accounting quality concerns. c. Nonoperating items, after-tax interest, and iterter-tax interest. not cause the company's ROA to increase? a. Reducing company assets without impacting sales. b. Reducing costs. c. Increasing the selling price per unit. d. Increasing company assets. a. Increase the investment in ss successful strategies will inginess