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> Under current U.S. accounting guidelines, which of the following items of information is a company not required to disclose, even if it were material in amount? a. Revenues generated from sales of its consumer products line of goods. b. Revenues generate

> What are the two extreme approaches that a company might follow in determining appropriate accounting policies for preparing its initial set of IFRS financial statements?

> Which of the following does U.S. GAAP not consider to be an objective of segment reporting? a. It helps users better understand the enterprise’s performance. b. It helps users better assess the enterprise’s prospects for future cash flows. c. It helps us

> Washburn Company owns 75 percent of Metcalf Company’s outstanding common stock. During the current year, Metcalf issues additional shares to outside parties at a price more than its per share consolidated value. How does this transaction affect the busin

> Which of the following statements is correct with respect to the IFRS accounting policy hierarchy in situations where a specifically relevant IASB standard dealing with an accounting issue does not exist? a. The IASB Conceptual Framework takes precedence

> How would an annual bonus paid at year-end be treated under IAS 34 and how does this treatment differ from what is required under U.S. GAAP?

> What type of segment information must companies provide in interim financial statements?

> What minimum information must an enterprise provide in an interim report?

> What procedures must companies follow to account for a change in accounting principle made in other than the first interim period of the year?

> How does a company determine the amount of income tax expense to report in an interim period?

> How should a company handle a LIFO liquidation in an interim period when the liquidated inventory is expected to be replaced by year-end?

> Discuss the objectives of the Securities Act of 1933 and the Securities Exchange Act of 1934. How are these objectives accomplished?

> Which of the following is necessary for a company to use fresh start accounting? a. The previous owners must hold at least 50 percent of the stock of the company when it emerges from bankruptcy. b. The reorganization value of the company must exceed the

> What approach are companies required to follow in preparing interim financial statements?

> Why are publicly traded companies in the United States required to prepare interim reports on a quarterly basis?

> What are the major differences between U.S. GAAP and IFRS 8 with respect to the disclosures that are required to be provided for each separately reportable operating segment?

> Under what conditions should a company disclose the amount of sales from a major customer?

> Which of the following does not accurately describe a requirement that a company must fulfill when adopting IFRS for the first time? a. The company must prepare an opening IFRS balance sheet at the beginning of the year for which the company is preparing

> Why might a subsidiary decide to issue new shares of common stock to parties outside the business combination?

> To satisfy geographic area disclosure requirements, what are the minimum and maximum numbers of countries for which information should be reported separately?

> What information must an enterprise report by geographic area?

> Under what conditions must an enterprise provide information about geographic areas?

> Under what conditions must an enterprise provide information about products and services?

> What accounting is made for professional fees incurred during a bankruptcy reorganization? a. They must be expensed immediately. b. They must be capitalized and written off over 180 months or less. c. They must be capitalized until the company emerges fr

> What are the different ways a country might use IFRS?

> What information must an enterprise provide for each of its separately reportable operating segments?

> Describe the three tests to identify reportable operating segments.

> How should a company determine operating segments when it organizes business activities in more than one way and the chief operating decision maker uses multiple sets of reports?

> What is an operating segment?

> The management approach requires a firm to define segments on the basis of its internal organizational structure. What are the advantages in defining segments on this basis?

> A company must prepare IFRS financial statements for the first time on December 31, 2020. According to IFRS 1, what is the date of transition to IFRS for this company? a. January 1, 2018. b. January 1, 2019. c. December 31, 2019. d. December 31, 2020.

> Hepner Corporation has the following stockholders’ equity accounts: Preferred stock (6% cumulative dividend) . . . . . . . . . $500,000 Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750,000 Additional paid-in capital . .

> According to the FASB, what is the major objective of segment reporting?

> A subsidiary has (1) a convertible preferred stock and (2) a convertible bond. How are these items factored into the computation of earnings per share for the parent company?

> Which of the following is not a reorganization item for purposes of reporting a company’s income statement during a Chapter 11 bankruptcy? a. Professional fees. b. Interest revenue. c. Interest expense. d. Gains and losses on closing facilities.

> One company purchases the outstanding debt instruments of an affiliated company on the open market. This transaction creates a gain that is appropriately recognized in the consolidated financial statements of that year. Thereafter, a worksheet adjustment

> Identify each of the following as they pertain to the SEC. a. Blue sky laws. b. S–8 Statement. c. Letter of comments. d. Public Company Accounting Oversight Board. e. Prospectus.

> Several years ago, Bennett, Inc., bought a portion of the outstanding bonds of Smith Corporation, a subsidiary organization. The acquisition was made from an outside party. In the current year, how should these intra-entity bonds be accounted for within

> When a company acquires an affiliated company’s debt instruments from a third party, how is the gain or loss on extinguishment of the debt calculated? When should this balance be recognized?

> In question (4), why is the consolidation process simpler if the bonds had been acquired directly from the subsidiary than from a third party? In question (4) A parent company acquires from a third party bonds that had been issued originally by one of i

> A parent company acquires from a third party bonds that had been issued originally by one of its subsidiaries. What accounting problems are created by this purchase?

> What is disaggregated financial information?

> When is a firm required to consolidate the financial statements of a VIE with its own financial statements?

> What are variable interests in an entity and how might they provide financial control over an entity?

> For which of the following does IFRS for SMEs not provide a simplification of full IFRS? a. Goodwill. b. Borrowing costs. c. Development costs. d. Inventory.

> Why were several original standards issued by the IASC revised in 1993?

> What is a variable interest entity (VIE)?

> A law firm is preparing to file a federal estate tax return (Form 706). The estate’s executor has elected to use the alternate valuation date. The partner in charge of filing this return is not certain about all of the ramifications of having chosen to u

> What is EDGAR? a. A system the SEC uses to reject registration statements that do not contain adequate information. b. The enforcement arm of the SEC. c. A system designed by the SEC to allow electronic filings. d. A branch of the government that oversee

> A client, Beth Voga, asks for advice. She tells you that her grandmother, a widowed resident of Montana, has no will. She asks whether any portion of her grandmother’s estate will pass to her (Beth’s) cousins, whom her grandmother despises. Required Use

> A staff employee for the CPA firm of O’Brien, Leahy, and Sweeney is currently preparing Form 1041 as an income tax return for an estate. The staff employee knows that the estate is allowed a deduction for income distributions to beneficiaries up to the a

> The CPA firm of Simon, Winslow, and Tate has been approached by a client who is interested in information about the possibility of establishing a minor’s Section 2503(c) trust. Go to the website http://www.finaid.org/savings/2503ctrust.phtml. Alternative

> The will of Josh O’Brien has the following stipulations: Antique collection goes to Ilsa Lunn. All money in the First Savings Bank goes to Richard Blaine. Cash of $9,000 goes to Nelson Tucker. All remaining assets are put into a trust fund with the incom

> Answer each of the following questions: a. What are the objectives of probate laws? b. What tasks does the executor of an estate perform? c. What assets are normally included as estate properties? d. What claims have priority to the distributions made by

> How does the consolidation process tend to disguise information needed to analyze the financial operations of a diversified organization?

> On a balance sheet prepared for a company during its reorganization, at what balance are liabilities reported? a. At the expected amount of the allowed claims. b. At the present value of the expected future cash flows. c. At the expected amount of the se

> Define each of the following terms: a. Will b. Estate c. Intestate d. Probate laws e. Trust f. Inter vivos trust g. Charitable remainder trust h. Remainderman i. Executor j. Homestead allowance

> For which of the following types of companies is IFRS for SMEs intended? a. Private companies. b. Publicly traded companies. c. Multinational corporations. d. Foreign companies.

> An estate has the following income: Rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,000 Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 Dividend income . . . . . . . . . . . . . . . . . .

> What is a shelf registration? a. A registration statement that the SEC formally rejects. b. A registration statement that the SEC rejects due to the lapse of a specified period of time. c. A registration process for large companies that allows them to of

> The estate of Nancy Hanks reports the following information: Value of estate assets . . . . . . . . . . . . . . . . . . . . . . . . . $8,400,000 Conveyed to spouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000 Conveyed to children . .

> Which of the following is a charitable lead trust? a. The income of the trust fund goes to an individual until death, at which time the principal is conveyed to a charitable organization. b. Charitable gifts are placed into the trust until a certain doll

> What is the difference between a testamentary trust and an inter vivos trust? a. A testamentary trust conveys money to a charity; an inter vivos trust conveys money to individuals. b. A testamentary trust is created by a will; an inter vivos trust is cre

> In recording the transactions of an estate, when are liabilities recorded? a. When incurred. b. At the date of death. c. When the executor takes responsibility for the estate. d. When paid.

> In an estate, which of the following is charged to income rather than to principal? a. Funeral expenses. b. Investment costs. c. Property taxes. d. Losses on the sale of investments.

> What is a remainderman? a. A beneficiary that receives the principal left in an estate or trust after a specified time. b. The beneficiary of the decedent’s life insurance policy. c. An executor or administrator after an estate has been completely settle

> The New England Company has a debt to a bank of $55,000. The company is currently being liquidated and believes that between $12,000 and $20,000 will be paid on that debt. According to the liquidation basis of accounting, what amount is reported for this

> The executor of an estate is filing an income tax return for the current period. Revenues of $25,000 have been earned. Which of the following is not a deduction allowed in computing taxable income? a. Income distributed to a beneficiary. b. Funeral expen

> A married couple have written a will that leaves part of their money to a trust fund. The income from this trust will benefit the surviving spouse until death, with the principal then going to their children. Why was the trust fund created? a. To reduce

> The FASB ASC Subtopic “Variable Interest Entities” affects thousands of business enterprises that now, as primary beneficiaries, consolidate entities that qualify as controlled VIEs. Retrieve the annual reports of one or more of the following companies (

> The following information has been taken from the consolidation worksheet of Peak and its 90 percent–owned subsidiary, Valley: ∙ Peak reports a $12,000 gain on the sale of a building. The building had a book value of $32,000 but was sold for $44,000 cash

> On January 1, 2016, Aronsen Company acquired 90 percent of Siedel Company’s outstanding shares. Siedel had a net book value on that date of $480,000: common stock ($10 par value) of $200,000 and retained earnings of $280,000. Aronsen paid $584,100 for th

> What is a private placement of securities?

> Which of the following is not true concerning gift taxes? a. Gift taxes are not abolished but a lifetime exclusion of $5.45 million is available in 2016. b. The American Taxpayer Relief Act of 2012 will eventually eliminate the federal gift tax. c. Histo

> M. Wilson Waltman died on January 1, 2016. All of his property was conveyed to beneficiaries on October 1, 2016. For federal estate tax purposes, the executor chose the alternate valuation date. On what date was the value of the property determined? a. J

> Sally Anne Williams died on January 1, 2016. All of her property was conveyed to several relatives on April 1, 2016. For federal estate tax purposes, the executor chose the alternate valuation date. On what date was the value of the property determined?

> The following unmarried individuals died in 2016. The estate of John Lexington has a taxable value of $4,590,000. The estate of Dorothy Alexander has a taxable value of $4.9 million. The estate of Scotty Fitzgerald has a taxable value of $5.6 million. No

> On June 30, 2018, Plaster, Inc., paid $916,000 for 80 percent of Stucco Company’s outstanding stock. Plaster assessed the acquisition-date fair value of the 20 percent noncontrolling interest at $229,000. At acquisition date, Stucco rep

> In computing federal estate taxes, deductions from an estate’s value are allowed for all of the following except a. Charitable bequests. b. Losses on the disposal of investments. c. Funeral expenses. d. Debts of the decedent.

> Which of the following is true concerning the American Taxpayer Relief Act of 2012? a. This tax law leads to the immediate elimination of the federal estate tax. b. This tax law leads to the immediate elimination of the federal gift tax. c. This tax law

> For estate tax purposes, what date is used for valuation purposes? a. Property is always valued at the date of death. b. Property is always valued at the date of distribution. c. Property is valued at the date of death unless the alternate date, which is

> What is the objective of the process of abatement? a. To give legal structure to the reductions that must be made if an estate has insufficient assets to satisfy all legacies. b. To ensure that all property distributions take place in a timely manner. c.

> A will has the following statement: “I leave $20,000 cash from my savings account in the Central Fidelity Bank to my sister, Angela.” This gift is an example of a. A residual legacy. b. A general legacy. c. A demonstrative legacy. d. A specific legacy.

> Which of the following is a specific legacy? a. The gift of all remaining estate property to a charity. b. The gift of $44,000 cash from a specified source. c. The gift of $44,000 cash. d. The gift of 1,000 shares of stock in IBM.

> Which of the following is usually not filed with the SEC on a regular periodic basis? a. A Form 10–Q b. A prospectus c. A proxy statement d. A Form 10–K

> According to the IFRS Foundation, approximately how many countries either require or permit the use of IFRS by publicly traded companies? a. 40 countries. b. 80 countries. c. 115 countries. d. 195 countries.

> Download Pfizer’s 2015 annual report (search Pfizer Investor Relations). Locate the firm’s consolidated statement of cash flows and answer the following: ∙ Does the firm employ the direct or indirect method of accounting for operating cash flows? ∙ Why d

> What is the homestead allowance? a. A reduction of $20,000 in estate assets prior to computing the amount of federal estate taxes. b. The amount of property conveyed in a will to a surviving spouse. c. An allotment from an estate to a surviving spouse an

> How are assets to be reported when the liquidation basis of accounting is being applied? a. At cost less accumulated depreciation. b. At the estimated amount of cash to be received. c. At fair value. d. At the lower of cost or market value.

> How does a devise differ from a legacy? a. A devise is a gift of money and a legacy is a nonmonetary gift. b. A devise is a gift to an individual and a legacy is a gift to a charity or other organization. c. A devise is a gift of real property and a lega

> Which of the following claims against an estate does not have priority? a. Funeral expenses because the amounts incurred are usually at the discretion of family members. b. Medical expenses associated with the decedent’s last illness. c. The costs of adm

> Why are claims against an estate put into an order of priority? a. To help the executor determine the due date for each claim. b. To determine which claims are to be paid if funds are insufficient to pay all claims. c. To assist in determining which spec

> How are claims against a decedent’s estate discovered by an executor? a. Public notice must be printed in an appropriate newspaper to alert all possible claimants. b. The executor waits for nine months until all possible bills have been received. c. The

> Which of the following is not a goal of probate laws? a. To gather and preserve all of the decedent’s property. b. To ensure that each individual produces a valid will. c. To discover the decedent’s intent for property held at death and then to follow th

> A deceased individual owned a bond. Which of the following is included in the estate principal? a. All interest collected prior to distributing the bonds to a beneficiary is considered part of the estate principal. b. Only the first cash payment after de

> What is the purpose of the laws of distribution? a. To guide the distribution of personal property when an individual dies without a will. b. To verify the legality of a will, especially an oral will. c. To guide the distribution of real property when an

> Which of the following is not exempt from registration with the SEC under the Securities Act of 1933? a. Securities issued by a nonprofit religious organization. b. Securities issued by a government unit. c. A public offering of $40 million to unaccredit

> Why might real estate be omitted from an inventory of estate property? a. Real estate is subject to a separate inheritance tax. b. State laws prohibit real property from being conveyed by an estate. c. State laws require a separate listing of all real es

> Which of the following countries uses IFRS? a. Canada. b. Mexico. c. Brazil. d. All of these answer choices are correct.

> What financial statements must be reported when the liquidation basis of accounting is being applied? a. Statement of activities and a statement of financial position. b. Income statement and balance sheet. c. Statement of liquidating cash flows and stat