ACCT 312 DeVry Week 4 Midterm Exam Latest
1. Question : (TCO 1) Which creates a deferred tax liability?
An unrealized loss from recording inventory at lower cost than market.
Estimated warranty expense
Subscriptions collected in advance
Accelerated depreciation in the tax return
Question 2. Question : (TCO 1) Of the following temporary differences, which one ordinarily creates a deferred tax asset?
Intangible drilling costs
Rent received in advance
Question 3. Question : (TCO 2) Interest cost is calculated by multiplying the
ABO by the expected return on the plan assets.
ABO by the discount rate.
PBO by the expected return on plan assets.
PBO by the discount rate.
Question 4. Question : (TCO 2) Which of the following constitutes the accumulated benefit obligation?
Present value of vested benefits at present pay levels
Present value of nonvested benefits at present pay levels
Present value of additional benefits related to projected pay increases
Present value of both vested and nonvested benefits at present pay levels
Question 5. Question : (TCO 3) According to GAAP, accounting for postretirement benefits other than pensions must adhere to the
cash basis of accounting.
accrual basis of accounting.
modified accrual basis.
modified cash basis.
Question 6. Question : (TCO 4) Retained earnings represents
Question 7. Question : (TCO 4) Any dividend that is considered to be a liquidating dividend will
reduce retained earnings.
reduce paid-in capital.
increase paid-in capital.
reduce the common stock account.
Question 8. Question : (TCO 5) The most important accounting objective for executive stock options is
measuring their fair value for balance sheet purposes.
measuring and reporting the amount of compensation expense during the service period.
to disclose increases or decreases in the stock options held at the end of each accounting period.
None of the above
Question 9. Question : (TCO 5) Our company granted options for 2 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $35 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $9 per option. If the options have a vesting period of 5 years, which would be the balance in paid-in-capital stock options three years after the grant date?
A credit of $10.8 million
A credit of $18 million
A debit of $70 million
A debit of $3.6 million
Question 10. Question : (TCO 6) Which of the following is not a potential common stock?
Convertible preferred stock
Participating preferred stock
Question 11. Question : (TCO 6) Which of the following results in increasing basic earnings per share?
Paying more than carrying value to retire outstanding bonds
Issuing cumulative preferred stock
Purchasing treasury stock
All of the above
Question 12. Question : (TCO 1) Please describe a deferred tax liability. Also, please provide three examples of timing differences that result in a deferred tax liability.
Question 13. Question : (TCO 2) Please describe defined-benefit plans. Who bears this risk? What factors contribute to the amount that the employee receives upon retirement? What are the key elements of a defined-benefit plan?
Question 14. Question : (TCO 4) Differentiate the rights of common shareholders with the rights of preferred shareholders. Please list at least three rights of each type of stock.
Question 15. Question : (TCO 5) Please describe a stock option plan. What are the key dates? What are some different ways that these plans can vest?