Question 1

Rosser Company sold supplies in the amount of 25,000 euros to a French company when the exchange rate was $1.21 per euro. At the time of payment, the exchange rate decreased to $0.82. Rosser must record a:

Accepted Answer

A)   gain of $9,750.
B)   gain of $20,500.
C)   loss of $9,750.
D)   loss of $20,500.
E)   neither a gain nor loss.F) B) and E)
G) A) and C)

Question 2

Select the correct statement from the following:

Accepted Answer

A)   Profit margin reflects a company's ability to produce net sales from total assets.
B)   Total asset turnover reflects the percent of net income in each dollar of net sales.
C)   Return on total assets can be separated into gross margin ratio and price-earnings ratio.
D)   High returns on total assets are desirable.
E)   Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis.F) C) and E)
G) A) and D)

Question 3

Doherty Corporation had net income of $30,000, net sales of $1,000,000, and average total assets of $500,000. Its return on total assets is:

Accepted Answer

A)   3%
B)   200%
C)   6%
D)   17%
E)   1.5%F) None of the above
G) A) and B)

Question 4

All of the following statements regarding accounting for trading securities under U.S. GAAP are True except:

Accepted Answer

A)   The entire portfolio of trading securities is reported at is fair value.
B)   An unrealized gain or loss from a change in fair value is reported on the income statement.
C)   An unrealized gain or loss is recorded with an adjusting entry when the securities are sold.
D)   An unrealized gain or loss is recorded with an adjusting entry at the end of each period.
E)   Unrealized gains and losses are recorded in a temporary account that is closed to Income Summary at the end of the period.F) B) and C)
G) C) and D)

Question 5

A company had net income of $45,000, net sales of $390,000, and average total assets of $250,000 for the current year. Calculate the company's profit margin, total asset turnover, and return on total assets.

Accepted Answer

The answer of A company had net income of $45,000,...

Question 6

Acadia had no investments prior to the current year. It had the following transactions involving available-for-sale and held-to-maturity securities during the year. The stock purchases are considered short-term available-for-sale securities. Prepare journal entries to record the transactions and events associated with the investment purchases.

Accepted Answer

The answer of Acadia had no investments prior to the...

Question 7

Breanna Boutique purchased on credit  ≤\leq≤ 50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound. At the year-end balance sheet date the exchange rate increased to $2.76. Breanna Boutique must record a:

Accepted Answer

A)   gain of $39,500.
B)   loss of $39,500.
C)   gain of $138,000.
D)   loss of $138,000.
E)   neither a gain nor loss. F) C) and D)
G) B) and C)

Question 8

An investing company that owns _________ of another (investee) company's voting stock (but not more than 50%) is presumed to have a significant influence over the investee.

Accepted Answer

The answer of An investing company that owns _________ of...

Question 9

Foreign exchange rates fluctuate due to changing _______________ and ___________ conditions.

Accepted Answer

The answer of Foreign exchange rates fluctuate due to changing...

Question 10

On November 12, Kera, Inc., a U.S. Company, sold merchandise on credit to Kakura of Japan at a price of 1,500,000 yen. The exchange rate was $0.00837 on the date of sale. On December 31, when Kera prepared its financial statements, the exchange rate was $0.00843. Kakura paid in full on January 12, when the exchange rate was $0.00861. On January 12, Kera should prepare the following journal entry:

Accepted Answer

A)   Debit Cash $12,915; credit Accounts Receivable-Kakura $12,555; credit Foreign Exchange Gain $360.
B)   Debit Cash $12,555; debit Foreign Exchange Loss $360; credit Accounts Receivable-Kakura $12,915.
C)   Debit Cash $12,915; credit Accounts Receivable-Kakura $12,645; credit Foreign Exchange Gain $90.
D)   Debit Cash $12,645; debit Foreign Exchange Loss $90; credit Accounts Receivable-Kakura $12,915.
E)   Debit Cash $12,915; credit Accounts Receivable-Kakura $12,645; credit Foreign Exchange Gain $270.F) A) and B)
G) A) and E)

Question 11

Trading securities are securities that are purchased by trading other securities rather than by paying cash.

Accepted Answer

A) True 
 B)False

Question 12

Short-term investments:

Accepted Answer

A)   Are securities that management intends to convert to cash within the longer of one year or the current operating cycle, and are readily convertible to cash.
B)   Include funds earmarked for a special purpose such as bond sinking funds.
C)   Include stocks not intended to be converted into cash.
D)   Include bonds not intended to be converted into cash.
E)   Include sinking funds not intended to be converted into cash.F) B) and E)
G) All of the above

Question 13

A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets equals:

Accepted Answer

A)   3.01%.
B)   10.64%.
C)   32.00%.
D)   33.25%.
E)   300.75%.F) C) and D)
G) A) and E)

Question 14

Management's intent determines whether an available-for-sale security is classified as long-term or short-term.

Accepted Answer

A) True 
 B)False

Question 15

What are the accounting basics for debt securities, including recording their acquisition, interest earned, and their disposal?

Accepted Answer

At acquisition, debt securities are reco...

Question 16

A company reported net sales of $900,000, net income of $100,000 and average total assets of $425,000. Calculate its return on total assets.

Accepted Answer

The answer of A company reported net sales of $900,000,...

Question 17

All of the following statements regarding other comprehensive income are True except:

Accepted Answer

A)   Other comprehensive income includes unrealized gains and losses on available-for-sale securities.
B)   Other comprehensive income is not considered when calculating comprehensive income.
C)   Other comprehensive income includes foreign currency adjustments.
D)   Other comprehensive income includes pension adjustments.
E)   Accumulated other comprehensive income is defined as the cumulative impact of other comprehensive income.F) A) and D)
G) B) and D)

Question 18

Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividend transaction would include a:

Accepted Answer

A)   Credit to Long-Term Investments for $16,450.
B)   Debit to Long-Term Investments for $16,450.
C)   Debit to Cash for $47,000.
D)   Credit to Cash for $16,450.
E)   Credit to Investment Revenue for $47,000.F) All of the above
G) A) and D)

Question 19

All of the following statements regarding accounting for influential securities under U.S. GAAP and IFRS are True except:

Accepted Answer

A)   Under the equity method, the share of investee's net income is reported in the investor's income in the same period the investee earns that income.
B)   Under the consolidation method, investee and investor revenues and expenses are combined.
C)   Under the equity method, the investment account equals the acquisition cost plus the share of investee income plus the share of investee dividends.
D)   Under the consolidation method, nonintercompany assets and liabilities are combined (eliminating the need for an investment account) .
E)   U. S. GAAP companies commonly refer to noncontrolling interests in consolidated subsidiaries as minority interests whereas IFRS companies use noncontrolling interests.F) C) and D)
G) A) and E)

Question 20

Any unrealized gain or loss for the portfolio of available-for-sale securities is reported on the income statement in the other gain or loss section.

Accepted Answer

A) True 
 B)False

Exam 15: Investments and International Operations

All of the following statements regarding accounting for trading securities under U.S. GAAP are True except:

Correct Answer
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Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividend transaction would include a:

Correct Answer
verified

What are the accounting basics for debt securities, including recording their acquisition, interest earned, and their disposal?

Correct Answer
verified
At acquisition, debt securities are reco...
View Answer

Breanna Boutique purchased on credit $\leq$ 50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound. At the year-end balance sheet date the exchange rate increased to $2.76. Breanna Boutique must record a:

Correct Answer
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A company had net income of $45,000, net sales of $390,000, and average total assets of $250,000 for the current year. Calculate the company's profit margin, total asset turnover, and return on total assets.

Correct Answer
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Select the correct statement from the following:

Correct Answer
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Correct Answer
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Foreign exchange rates fluctuate due to changing _____ and _ conditions.

Correct Answer
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Any unrealized gain or loss for the portfolio of available-for-sale securities is reported on the income statement in the other gain or loss section.

Correct Answer
verified

An investing company that owns _________ of another (investee) company's voting stock (but not more than 50%) is presumed to have a significant influence over the investee.

Correct Answer
verified

Management's intent determines whether an available-for-sale security is classified as long-term or short-term.

Correct Answer
verified

Short-term investments:

Correct Answer
verified

Doherty Corporation had net income of $30,000, net sales of $1,000,000, and average total assets of $500,000. Its return on total assets is:

Correct Answer
verified

All of the following statements regarding other comprehensive income are True except:

Correct Answer
verified

Correct Answer
verified

All of the following statements regarding accounting for influential securities under U.S. GAAP and IFRS are True except:

Correct Answer
verified

A company reported net sales of $900,000, net income of $100,000 and average total assets of $425,000. Calculate its return on total assets.

Correct Answer
verified

A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets equals:

Correct Answer
verified

Trading securities are securities that are purchased by trading other securities rather than by paying cash.

Correct Answer
verified

Rosser Company sold supplies in the amount of 25,000 euros to a French company when the exchange rate was $1.21 per euro. At the time of payment, the exchange rate decreased to $0.82. Rosser must record a:

Correct Answer
verified

Exam 15: Investments and International Operations

All of the following statements regarding accounting for trading securities under U.S. GAAP are True except:

Correct AnswerverifiedShow Answer

Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividend transaction would include a:

Correct AnswerverifiedShow Answer

What are the accounting basics for debt securities, including recording their acquisition, interest earned, and their disposal?

Correct AnswerverifiedAt acquisition, debt securities are reco...View AnswerShow Answer

Breanna Boutique purchased on credit ≤\leq≤ 50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound. At the year-end balance sheet date the exchange rate increased to $2.76. Breanna Boutique must record a:

Correct AnswerverifiedShow Answer

A company had net income of $45,000, net sales of $390,000, and average total assets of $250,000 for the current year. Calculate the company's profit margin, total asset turnover, and return on total assets.

Correct AnswerverifiedShow Answer

Select the correct statement from the following:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Foreign exchange rates fluctuate due to changing _______________ and ___________ conditions.

Correct AnswerverifiedShow Answer

Any unrealized gain or loss for the portfolio of available-for-sale securities is reported on the income statement in the other gain or loss section.

Correct AnswerverifiedShow Answer

An investing company that owns _________ of another (investee) company's voting stock (but not more than 50%) is presumed to have a significant influence over the investee.

Correct AnswerverifiedShow Answer

Management's intent determines whether an available-for-sale security is classified as long-term or short-term.

Correct AnswerverifiedShow Answer

Short-term investments:

Correct AnswerverifiedShow Answer

Doherty Corporation had net income of $30,000, net sales of $1,000,000, and average total assets of $500,000. Its return on total assets is:

Correct AnswerverifiedShow Answer

All of the following statements regarding other comprehensive income are True except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following statements regarding accounting for influential securities under U.S. GAAP and IFRS are True except:

Correct AnswerverifiedShow Answer

A company reported net sales of $900,000, net income of $100,000 and average total assets of $425,000. Calculate its return on total assets.

Correct AnswerverifiedShow Answer

A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets equals:

Correct AnswerverifiedShow Answer

Trading securities are securities that are purchased by trading other securities rather than by paying cash.

Correct AnswerverifiedShow Answer

Rosser Company sold supplies in the amount of 25,000 euros to a French company when the exchange rate was $1.21 per euro. At the time of payment, the exchange rate decreased to $0.82. Rosser must record a:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
At acquisition, debt securities are reco...
View Answer

Breanna Boutique purchased on credit $\leq$ 50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound. At the year-end balance sheet date the exchange rate increased to $2.76. Breanna Boutique must record a:

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Foreign exchange rates fluctuate due to changing _____ and _ conditions.

Correct Answer
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