Test Bank Financial Reporting and Analysis 4th Ed Revsine, Collins, Johnson, Mittelstaedtr 396 PAGES

Test Bank for Financial Reporting and Analysis 4th Edition Revsine, Collins, Johnson, Mittelstaedtr 396 PAGES Exam (elaborations) Test Bank For Financial Reporting And Analysis 4th Edition Revsine, Collins, Johnson, Mittelstaedtr Test Bank For Financial Reporting And Analysis 4th Edition Revsine, Collins, Johnson, Mittelstaedtr Full file at Collins,-Johnson,-Mittelstaed Chapter 02 Accrual Accounting and Income Determination True / False Questions 1. To measure earnings under accrual accounting, revenues are recognized when they are received. FALSE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 1 2. Recognition of revenue under the cash basis occurs when the revenue is received. TRUE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 1 3. Under the cash basis, expenses are recognized when the costs expire or assets are used. FALSE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Easy Learning Objective: 1 2-1 Full file at Collins,-Johnson,-Mittelstaed 4. Accrual accounting decouples measured earnings from operating cash inflows and outflows. TRUE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 5. Cash-basis accounting provides the most useful measure of future operating performance. FALSE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 6. Accrual accounting can produce large discrepancies between the firm's reported profit performance and the amount of cash generated from operations. TRUE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 7. The principles that govern revenue and expense recognition under accrual accounting are designed to alleviate the mismatching problems that exist under cash-basis accounting. TRUE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 2-2 Full file at Collins,-Johnson,-Mittelstaed 8. Reported accrual accounting income for a period always provides an accurate picture of underlying economic performance. FALSE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 1 9. Revenues are earned when the seller substantially completes performance required by an agreement. TRUE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 2 10. The activities comprising the operating cycle are generally consistent across firms. FALSE AACBS: Analytic AICPA BB: Critical Thinking Difficulty: Medium Learning Objective: 2 11. Since income is earned as a result of complex, multiple-stage processes, the key issue in income determination is the timing of income recognition. TRUE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 2 2-3 Full file at Collins,-Johnson,-Mittelstaed 12. According to generally accepted accounting principles, revenue should be recognized at the earliest time that the "critical event" has taken place and the proceeds are collected. FALSE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 2 13. GAAP specifies three conditions that must be satisfied in order for revenue to be appropriately recognized. FALSE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 2 14. Book value refers to the amount at which an account (or set of related accounts) is carried in the company's records as opposed to the amount reported in the company's financial statements. FALSE AACBS: Analytic AICPA BB: Critical Thinking Difficulty: Medium Learning Objective: 2 15. Net asset valuation and income determination are inextricably intertwined. TRUE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measurement Difficulty: Medium Learning Objective: 2 2-4 Full file at Collins,-Johnson,-Mittelstaed 16. A ship building company is likely to recognize revenue at the completion of production. FALSE AACBS: Analytic AICPA BB: Critical Thinking AICPA FN: Measuremen...

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