Fsa Quiz 3

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Name: ______________________ Class: _________________ Date: _________ ID: A Quiz 3 Mock Multiple C hoice Identify the choice that best completes the statement or answers the question. ____ 1. All of the following are the general principles underlying the valuation of liabilities e xcept: a. Liabilities requiring future cash payments appear at the present value of the required future cash flows discounted at an interest rate that reflects the uncertainty that the firm will be able to make the cash payments. b. The fair value of a liability cannot differ from the amount appearing on the balance sheet, particularly for long-term debt. c. Liabilities representing cash advances from customers appear at the amount of the…show more content…
Operating L ease D isclosure (amounts in thousands) Operating Lease Commitments at the end of 2012 Year 2013 2014 2015 2016 2017 Beyond 2017 Reported Lease Commitments $148,239 $252,800 $278,327 $279,210 $285,452 $2,471,600 ____ 7. Using the information provided by Santa Corporation estimate the average life of the operating leases. a. 8.66 years b. 13.66 years c. 10 years d. Not able to determine ____ 8. Using the information provided by Santa Corporation calculate the company’s 2012 fixed asset ratio. a. 3.0 b. 3.65 c. 3.23 d. 5.21 3 Name: ______________________ ____ ID: A 9. Assuming that Santa Corporation was required to capitalize its operating lease how would the company’s fixed asset ratio change under this assumption. a. increase b. decrease c. no effect d. unable to determine ____ 10. Which of the following is n ot one of the three criteria for recognition of a liability? a. The obligation involves a probable future sacrifice of resources at a specified or determinable date. b. The firm is required to make a cash payment for the goods or services. c. The firm has little or no discretion to avoid the transfer. d. The transaction or event giving rise to the liability has already occurred. ____ 11. The
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