Cited Source: Gleim Income Multiple-Choice Section 3 A.pptFOR TEST -22 Pertains to Examination 2 33.

Which of the following should be reflected, net of applicable income taxes, in the statement of equity as an adjustment of the opening balance in retained e arnings? A. Correction of an error in previously issued financial statements. B. Cumulative effect of a change in depreciation method. C. Loss on disposal of a component of an entity D. Extraordinary item. ANSWER: According to SFAS 16, Prior Period Adjustments, the correction of an error occur ring in a prior period should be accounted for as a prior-period adjustment. It should be charged or credited net of tax to retained earnings and reported as an adjustment in the statement of equity. It is not included in net income for the current period. As it reads on test: #22. Which of the following should be reflected, net of applicable income taxes, in the statement of equity as an adjustment of the opening balance in retained earnings? I. Loss on disposal of a component of an entity. II. Correction of an error in previously issued financial statements. III. Cumulative effect of a change in depreciation method. IV. Extraordinary item. A. II only B. I and II C. II and III D. II and IV E. None of the above. On test and /I marked A for II only Correction of error in previously issued finan cial statements. Pertains to Examination 2 #7. I thought it was marked wrong on test but it was actually right. Sorry! #8. Reads on test as: Barber Company will receive $800,000 in 7 years. If the approximate interest rat e is 10% the present value of the $800,000 receipt is A. $ 1,558,976. B. C. D. E. $ 1,208,000. $410,528. $408,000 None of the above

Fv = $800,000 N = 7 years I/Y = 10% Answer is: Pv = $410,526.4946 or rounded $410,527 **** Reason why I chose none of the above / E For numbers 8 and 22 Above Matching Problems *****With Matching Problems being worth 2 points apiece this would be equivalent to 4 points.

Pertaining to Diagnostic Examination: Question # 6 Reads: Park & Company was recently formed with a $5,000 investmen t in the company by stockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equi pment by paying $2,000 in cash and signing a promissory note for the balance. Ba sed on these transactions, the company's total assets are: A. $7,000 B. $9,000

C. $ 10,000 D. $11,000 E. None of the Above On test I marked: D. $ 11,000 This is correct based on my findings of I found another on line test and took it and the answer is the same Please see below: I also found the same question on scribds.com and the answer i s the same as well. 15 CORRECT Park & Company was recently formed with a $5,000 investment in the company by st ockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equipment by paying $2,000 in cash and signing a promissory note for the balance. Based on these transacti ons, the company's total assets are: A) $7,000. B) $9,000. C) $10,000. D) $11,000. Feedback: Difficulty: Hard LO: 2 AACSB: analytic AICPA BB: resource management AICPA FN: reporting # 28. On test reads: If total assets increase, then either liabilities or stock holders equity s must increase. T or F Cited Source: E:\IFRS\Chapter 2 Solution of fundamental of financial accouting by EDMONDS (4th edition).htm An asset source transaction increases assets and increases either liabilities or equity ****Question 6 is equivalent to 2 points and Question 28 is equivalent to 1 poin t Pertains to Examination 3 #23.

Cited Source: Gleim Income Multiple-Choice Section 3 A.pptFOR TEST -22 Pertains to Examination 2 33. Which of the following should be reflected, net of applicable income taxes, in the statement of equity as an adjustment of the opening balance in retained e arnings? A. Correction of an error in previously issued financial statements. B. Cumulative effect of a change in depreciation method. C. Loss on disposal of a component of an entity D. Extraordinary item. ANSWER: According to SFAS 16, Prior Period Adjustments, the correction of an error occur ring in a prior period should be accounted for as a prior-period adjustment. It should be charged or credited net of tax to retained earnings and reported as an adjustment in the statement of equity. It is not included in net income for the current period. As it reads on test: #22. Which of the following should be reflected, net of applicable income taxes, in the statement of equity as an adjustment of the opening balance in retained earnings? I. Loss on disposal of a component of an entity. II. Correction of an error in previously issued financial statements. III. Cumulative effect of a change in depreciation method. IV. Extraordinary item. A. II only B. I and II C. II and III D. II and IV E. None of the above. On test and /I marked A for II only Correction of error in previously issued finan cial statements. Pertains to Examination 2 #7. I thought it was marked wrong on test but it was actually right. Sorry! #8. Reads on test as: Barber Company will receive $800,000 in 7 years. If the approximate interest rat e is 10% the present value of the $800,000 receipt is A. $ 1,558,976. B. C. D. E. $ 1,208,000. $410,528. $408,000 None of the above

Fv = $800,000 N = 7 years I/Y = 10% Answer is: Pv = $410,526.4946 or rounded $410,527 **** Reason why I chose none of the above / E For numbers 8 and 22 Above Matching Problems *****With Matching Problems being worth 2 points apiece this would be equivalent to 4 points.

Pertaining to Diagnostic Examination: Question # 6 Reads: Park & Company was recently formed with a $5,000 investmen t in the company by stockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equi pment by paying $2,000 in cash and signing a promissory note for the balance. Ba sed on these transactions, the company's total assets are: A. $7,000 B. $9,000

C. $ 10,000 D. $11,000 E. None of the Above On test I marked: D. $ 11,000 This is correct based on my findings of I found another on line test and took it and the answer is the same Please see below: I also found the same question on scribds.com and the answer i s the same as well. 15 CORRECT Park & Company was recently formed with a $5,000 investment in the company by st ockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equipment by paying $2,000 in cash and signing a promissory note for the balance. Based on these transacti ons, the company's total assets are: A) $7,000. B) $9,000. C) $10,000. D) $11,000. Feedback: Difficulty: Hard LO: 2 AACSB: analytic AICPA BB: resource management AICPA FN: reporting # 28. On test reads: If total assets increase, then either liabilities or stock holders equity s must increase. T or F Cited Source: E:\IFRS\Chapter 2 Solution of fundamental of financial accouting by EDMONDS (4th edition).htm An asset source transaction increases assets and increases either liabilities or equity ****Question 6 is equivalent to 2 points and Question 28 is equivalent to 1 poin t Pertains to Examination 3 #23.

Cited Source: Gleim Income Multiple-Choice Section 3 A.pptFOR TEST -22 Pertains to Examination 2 33. Which of the following should be reflected, net of applicable income taxes, in the statement of equity as an adjustment of the opening balance in retained e arnings? A. Correction of an error in previously issued financial statements. B. Cumulative effect of a change in depreciation method. C. Loss on disposal of a component of an entity D. Extraordinary item. ANSWER: According to SFAS 16, Prior Period Adjustments, the correction of an error occur ring in a prior period should be accounted for as a prior-period adjustment. It should be charged or credited net of tax to retained earnings and reported as an adjustment in the statement of equity. It is not included in net income for the current period. As it reads on test: #22. Which of the following should be reflected, net of applicable income taxes, in the statement of equity as an adjustment of the opening balance in retained earnings? I. Loss on disposal of a component of an entity. II. Correction of an error in previously issued financial statements. III. Cumulative effect of a change in depreciation method. IV. Extraordinary item. A. II only B. I and II C. II and III D. II and IV E. None of the above. On test and /I marked A for II only Correction of error in previously issued finan cial statements. Pertains to Examination 2 #7. I thought it was marked wrong on test but it was actually right. Sorry! #8. Reads on test as: Barber Company will receive $800,000 in 7 years. If the approximate interest rat e is 10% the present value of the $800,000 receipt is A. $ 1,558,976. B. C. D. E. $ 1,208,000. $410,528. $408,000 None of the above

Fv = $800,000 N = 7 years I/Y = 10%

Answer is: Pv = $410,526.4946 or rounded $410,527 **** Reason why I chose none of the above / E For numbers 8 and 22 Above Matching Problems *****With Matching Problems being worth 2 points apiece this would be equivalent to 4 points.

Pertaining to Diagnostic Examination: Question # 6 Reads: Park & Company was recently formed with a $5,000 investmen t in the company by stockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equi pment by paying $2,000 in cash and signing a promissory note for the balance. Ba sed on these transactions, the company's total assets are: A. $7,000 B. $9,000

C. $ 10,000 D. $11,000 E. None of the Above On test I marked: D. $ 11,000 This is correct based on my findings of I found another on line test and took it and the answer is the same Please see below: I also found the same question on scribds.com and the answer i s the same as well. 15 CORRECT Park & Company was recently formed with a $5,000 investment in the company by st ockholders. The company then borrowed $2,000 from a local bank, purchased $1,000 of supplies on account, and also purchased $5,000 of equipment by paying $2,000 in cash and signing a promissory note for the balance. Based on these transacti ons, the company's total assets are: A) $7,000. B) $9,000. C) $10,000. D) $11,000. Feedback: Difficulty: Hard LO: 2 AACSB: analytic AICPA BB: resource management AICPA FN: reporting # 28. On test reads: If total assets increase, then either liabilities or stock holders equity s must increase. T or F Cited Source: E:\IFRS\Chapter 2 Solution of fundamental of financial accouting by EDMONDS (4th edition).htm An asset source transaction increases assets and increases either liabilities or

equity ****Question 6 is equivalent to 2 points and Question 28 is equivalent to 1 poin t Pertains to Examination 3 #23.

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