CGC1 Wgu No Answers

Topics: Balance sheet, Bond, Dividend Pages: 23 (4256 words) Published: March 17, 2015


11.
Which two statements are true about policy-setting bodies?
 
Choose 2 answers
 
A.

The Financial Accounting Standards Board (FASB) establishes and improves standards of financial accounting and reporting for the guidance and education of the public. B.

The FASB is an agency of the federal government that has the broad powers to prescribe accounting standards to be employed by companies that fall within its jurisdiction. C.

The SEC is an agency of the federal government that has the broad powers to prescribe accounting standards to be employed by companies that fall within its jurisdiction. D.

The Securities and Exchange Commission (SEC) establishes and improves standards of financial accounting and reporting for the guidance and education of the public

12.
What are two purposes of Generally Accepted Accounting Principles (GAAP)?  
Choose 2 answers
 
A.

To establish procedures for banking institutions
B.

To establish principles of reporting with substantial authoritative support C.

To establish and improve standards of financial accounting and reporting for the guidance and education of the public D.

To establish principles of reporting for the securities industry


14.
Which agency does the Securities and Exchange Commission (SEC) primarily work with to develop accounting standards in the U.S.?

Choose 1 answer
 
 
A.

International Accounting Standards Board (IASB)
B.

American Institute of Certified Public Accountants (AICPA)
C.

IRS
D.

Financial Accounting Standards Board (FASB)


13.
What is the role of the rule-setting authority of the Financial Accounting Standards Board (FASB)?

Choose 1 answer
 
 
A.

To establish and improve standards of financial accounting for state and local governments B.

To establish and improve standards of financial accounting and reporting for the guidance and education of the public C.

To establish regulations for banking auditing practices
D.

To issue standards through it's Committee on Accounting Procedure and Accounting Principles Board

15.
What is the rule setting authority of the International Accounting Standards Board (IASB) regarding a domestic company in the United States?

Choose 1 answer
 
 
A.

They are NOT required to follow IASB rules.
B.

They may choose to follow either IASB or Financial Accounting Standards Board (FASB). C.

They must follow the IASB rules.
D.

They must follow both IASB and FASB rules.

16.
At December 31st, before adjusting entries, the balances in selected accounts were: Accounts Receivable $20,000 debit, Allowance for Doubtful Accounts $100 debit, and Sales $100,000 credit. Bad debts are estimated to be 5% of Sales.

What would the entry to record the bad debt estimate at December 31st include?

Choose 1 answer
 
 
A.

Bad Debt Expense debit $5,000
B.

Bad Debt Expense debit $6,100
C.

Bad Debt Expense debit $1,000
D.

Bad Debt Expense debit $2,100

17.
Company A factors $1,000,000 of accounts receivable with Company B. A finance charge of 4% is charged by Company B, who also retains an amount equal to 6% of the accounts receivable.

If this is on a With Recourse basis, with $10,000 as the recourse obligation, which journal entry is correct for Company A?

Choose 1 answer
 
 
A.

Cash
900,000
 
Due from Factor
60,000
 
Loss on Sale of Receivables
50,000
 
Accounts Receivable
 
1,000,000
Recourse Liability
 
 10,000

B.

Cash
890,000  
 
Due from Factor
60,000  
 
Loss on Sale of Receivables
50,000  
 
Accounts Receivable
 
 990,000
Recourse Liability
 
 10,000

C.

Cash
890,000  
 
Loss on Sale of Receivables
60,000  
 
Due from Factor
50,000  
 
Accounts Receivable
 
 990,000
Recourse Liability
 
10,000

D.

Cash
900,000
 
Loss on Sale of Receivables
60,000
 
Due from Factor
50,000
 
Accounts Receivable
 
1,000,000
Recourse...
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