True or False S1: A branch is able to report an investment in another branch of the home office, as long as such investment account is to be eliminated in full when preparing combined financial statements. S2: Contingent considerations in a business combination are only recognized if the outflow of economic resources is probable and the estimated outflow can be measured reliably. a. TT b. TF c. FT d. FF

True or False S1: A branch is able to report an investment in another branch of the home office, as long as such investment account is to be eliminated in full when preparing combined financial statements. S2: Contingent considerations in a business combination are only recognized if the outflow of economic resources is probable and the estimated outflow can be measured reliably. a. TT b. TF c. FT d. FF

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter2: The Accounting Information System

Section: Chapter Questions

Problem 17CE

See similar textbooks

Similar questions

Statement 1: The balance in the “allowance for mark-up” account represents the home office’s realized mark-up on shipments to the branch. Statement 2: The branch records an allocated overhead expense form the home office as a credit to the “home office” account. Statement 3: A subsidiary is not excluded from consolidation simply because the investor is a venture capital organization, mutual fund, unit trust or similar entity. Statement 4: Influence is the power to govern the financial and operating polices of an entity so as to obtain benefits from its activities. Which of the statements above are correct?
PROBLEM True (t) or False (f) _____ Currently, both U.S. GAAP and the International Financial Reporting Standars are acceptable for international use. _____ The AICPA's Code of Professional Conduct requires that members prepare financial statements in accordance with generally accepted accotungin principles. _____ Companies consider only quantitative factors in determining whether an item is material. _____ Financial statements are the principal means through which financial information is communicated to those outside an enterprise. _____ The matching principle states that debits must equal credits in each transaction. _____ The income statement is useful for helping to assess the risk or uncertainty of achieving future flows. _____ Revenues, gains, and distributions to owners all increase equity. _____ The balance sheet omits many items that are of financial value to the business but cannot be recorded objectivelty. _____ A strength of the income statement as compared to the…
Conceptual Framework and Reporting Standard: Small and Medium Sized Enterprise 1. The PFRS for SMEs requires that entity’s financial statements should be prepared using an accrual basis of accounting. True of False? 2.The PFRS for SMEs states that the objective of financial statements is to provide information about the financial position, performance and cash flows of the entity that is useful for economic decision-making by a broad range of users who are not in a position to demand reports tailored to meet their particular information needs. True or False? 3. The PFRS for SMEs allows offsetting in assets and liabilities, or income and expenses. True or False?
S1: Only agency sales and operating expenses determines the sales agency’s profitability. S2: The primary advantages of the system described is that it is simple to establish and maintain. Only S1 is Only S2 is Both statements are Both statements are 2. S1:Controlis the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. S2: Consolidated financial statements shall be prepared using uniform accounting policies for like transactions and other events in similar circumstances. Only S1 is Only S2 is Both statements are Both statements are 3. In an acquisition where there is an exchange of assets for assets, how does the ownership structure of the acquiree change? The net assetsdecrease There is no change in the netassets The net assetsincrease The net assets may increase, decrease or remain the
Choose the incorrect statement:a.) The objective of the external financial statements is to communicate the economic effects of completed transactions and other events on the entity.b.) The practice of accounting requires considerable professional judgment.c.) Security analysis use information form financial statements and other sources to projects future earnings.d.) The assessment of earning quality has become an exact science.
7. Determine the response that best completes the following statements or questions. A) The primary objective of financial reporting is to provide information. multiple choice 1 About a firm's management team. Useful to capital providers. About a firm's financing and investing activities. Concerning the changes in financial position resulting from the income-producing efforts of the entity. B) Statements of Financial Accounting Concepts issued by the FASB multiple choice 2 Represent GAAP. Identify the conceptual framework within which accounting standards are developed. Have been superseded by SFASs. Are subject to approval of the SEC. C) In general, revenue is recognized when multiple choice 3 A good or service has been delivered to a customer. The sales price has been collected. A contract has been signed. A purchase order has been received. D) In depreciating the cost of an asset, accountants are most concerned with…
1. Companies present sufficient financial information so the creditors and reasonably prudent investor will not be misled. 2. Companies listed on the philippine stock exchange report audited financial information annually and report unaudited information quarterly. Choices: a. Full disclosure principle b. Time period assumption c. Materiality constraint d. Cost Principle e. Revenue recognition principle f. Conservatism Constraint g. Matching principle h. Economic entity assumption i. Monetary unit j. Going concern k. Some other answers
B) Indicate whether the following statements are (True) or (False) and correct the false statements: Time-series analysis is the evaluation of the firm's financial performance in comparison to other firm(s) at the same point in time. Marginal analysis means that projects must be implemented if their revenues are higher than their expenses. Choose the correct answer The officer responsible for the firm's financial activities such as financial planning and fund raising, making capital expenditure decisions, and managing cash, credit, the pension fund, and foreign exchange is (a) Treasurer. (b) Controller. (c) Foreign exchange manager. (d) None of the above.
Statement 1: Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Statement 2: Consolidated financial statements shall be prepared using uniform accounting policies for like transactions and other events in similar circumstances. Statement 3: An expense item allocated by the home office to a branch is recorded by the branch by a debit to an expense ledger account and a credit cash-home office. Statement 4: A debit to Home Office ledger account and a credit to the Trade Accounts Receivable account in the accounting records of a branch indicate that the home office collected accounts receivable of the branch. Statement 5: Under the acquisition method, if the fair values of identifiable net assets exceed the value implied by the purchase price of the acquired company, the excess should be accounted for goodwill. Statement 6: With an acquisition, direct and indirect expenses are considered a par of the total cost of…
4. Using Full PFRS instead of SME’s PFRS in a business supposed to used SME’s PFRS was there a material effect on the presentations of financial position and financial operation? How?
State whether the following statements are true or false. 4) Agency Problem creates when managers are acting on behalf of owners’ interest. 5) Increase in current liabilities and decrease in current asset represents inflow cash. 6) If an individual investor buys or sells a currently outstanding stock through a broker, this is a primary market transaction. 7) Activity ratios explain the firm ability to use assets efficiently.
Accounting is the process of matching Select one: a. Revenues and Costs b. Potential and Real performance c. Cash inflows and outflows d. Benefits and Costs Accounting provides information on Select one: a. All of the answers are correct b. Financial conditions of an institution c. Company's tax liability for a particular year d. Cost and income for managers Public Accounting, as a sub-discipline of accounting, includes: Select one: a. Management Accounting b. Cost accounting c. Internal auditing d. Managerial Advisory services