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ACCT 312 DeVry Week 4 Midterm Exam Latest

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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

MACRS depreciation

Installment sales

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

earned capital.

cash.

assets.

net assets.

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

Convertible bonds

Stock rights

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?