Which of the following statements is not true as it relates to the dollar-value LIFO inven¬tory method?
a. It is easier to erode LIFO layers using dollar-value LIFO techniques than it is with specific goods pooled LIFO.
b. Under the dollar-value LIFO method, it is possible to have the entire inventory in only one pool.
c. Several pools are commonly employed in using the dollar-value LIFO inventory method.
d. Under dollar-value LIFO, increases and decreases in a pool are determined and measured in terms of total dollar value, not physical quantity.
Answer: A
Accounting
- Per U.S. GAAP, which of the following statements is correct regarding accounting changes that result in financial statements that are, in effect, the statements of a different reporting entity?
- Under U.S. GAAP, a transaction that is unusual in nature and infrequent in occurrence should be reported separately as a component of income:
- On October 1, 20X3 , Wand , Inc. committed itself to a formal plan to sell its Kam division's assets early in 20X4. On that date, Wand estimated that the fair value of the component's assets was $25,000 less than the carrying value. Wand also estimated that Kam would incur operating losses of $100,000 for the period of October 1, 20X3 through December 31, 20X3 and $50 ,000 for the period January 1, 20X4 through February 28, 20X4. All estimates proved to be materially correct. Disregarding income taxes, what should Wand report as loss from discontinued operations in its comparative 20X3 and 20X4 income statements?
- During Year 2, Orea Corp. decided to change from the FIFO method of inventory valuation to the weighted average method. Inventory balances under each method were as follows:
- Lore Co. changed from the cash basis of accounting to the accrual basis of accounting during the current year. The cumulative effect of this change should be reported in Lore's current year financial statements as a:
- In open market transactions , Gold Corp. simultaneously sold its long-term investment in Iron Corp. bonds and purchased its own outstanding bonds. The broker remitted the net cash from the two transactions. Gold's gain on the purchase of its own bonds exceeded its loss on the sale of the Iron bonds. Assume the transaction to purchase its own outstanding bonds is unusual in nature and has occurred infrequently. Under U.S. GAAP , Gold should report the:
- On April 30, Deer Corp. approved a plan to dispose of a component of its business. For the period January 1 through April 30, the component had revenues of $500,000 and expenses of $800,000. The assets of the component were sold on October 15 at a loss. In its income statement for the year ended December 31, how should Deer report the component's operations from January 1 to April 30?
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- How should the effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimate be reported?
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- Scott Corporation sold a fixed asset used for operations for greater than its carrying amount. Scott should report the transaction in the income statement using the:
- According to the IASS conceptual framework, which of the following is an underlying assumption of financial statement preparation and presentation?
- According to the IASB conceptual framework, the usefulness of providing information in the financial statements is subject to the constraint of:
- Which of the following is not defined in FASB Statement of Financial Accounting Concepts Number 7 as one of the five elements of present value (or economic value) measurement used to establish the value of assets or liabilities using cash flow information?
- According to the FASB conceptual framework, which of the following relates to both relevance and reliability?
- According to the FASB conceptual framework, which of the following statements conforms to the realization concept?
- In order to calculate bond premium or discount, you need four pieces of information ?
- True or False? - The allowance method is required by the internal Revenue Service for tax reporting the direct write off method is required by GAAP.
- Which payroll taxes is withheld from an employee's paycheck?
- True or False? - Interest Rates are generally expressed as annual Rates ( over 12 months)
- True or False? - If you Issue a bond at a premium, you receive more than face value
- What is the formula to calculate basic interest?
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- What effect will the acquisition of treasury stock have on stockholders' equity and earnings per share, respectively?
- In computations of weighted average of shares outstanding, when a stock dividend or stock split occurs, the additional shares are