21) Tim's Tams donated 100 baseball caps to the local homeless shelter. The company will record the donation as an operating expense. The caps cost Tim's Tams $2.00 each and the company usually sells them for $8.50. If Tim's Tams reports a charity expense of $850, this accounting choice would be considered ________.
A) conservative
B) fundamental
C) basic
D) aggressive
22) Tom's Ware donated 100 T-shirts to the local high school. The company will record the donation as an operating expense. The shirts cost Tom's Ware $6.00 each and the company usually sells them for $10.50. If Tom's Ware reports a charity expense of $1,050, this accounting choice would be considered ________.
A) conservative
B) fundamental
C) basic
D) aggressive
23) Tom's Ware donated 100 T-shirts to the local high school. The company will record the donation as an operating expense. The shirts cost Tom's Ware $6.00 each and the company usually sells them for $10.50. If Tom's Ware reports a charity expense of $600, this accounting choice would be considered ________.
A) conservative
B) fundamental
C) basic
D) aggressive
24) The town of Columbia gave a piece of land to Wind Energy, Inc. so that the company would build its new factory in Columbia and create many local jobs. One appraiser said the land was worth $200,000, while a second appraiser said the land was worth $220,000. If Wind Energy, Inc. records the land at $200,000, this accounting choice would be considered ________.
A) conservative
B) fundamental
C) basic
D) aggressive
25) The town of Columbia gave a piece of land to Wind Energy, Inc. so that the company would build its new factory in Columbia and create many local jobs. One appraiser said the land was worth $200,000, while a second appraiser said the land was worth $220,000. If Wind Energy, Inc. records the land at $220,000, this accounting choice would be considered ________.
A) conservative
B) fundamental
C) basic
D) aggressive
26) Ken's Candy has been selling to Art's Quik Mart for thirty years. Lately Art's has been paying its bills increasingly slowly. Right now, Ken's Candy has $10,000 in accounts receivable on its books from Art's Quik Mart for candy sold to Art's over the last six months. Art's Quik Mart says it will pay the bill as soon as it can. Ken's Candy is trying to decide whether it should increase its allowance for uncollectible accounts to cover the amount owed by Art's. If Ken's Candy increases the allowance, this accounting choice would be considered ________.
A) conservative
B) fundamental
C) basic
D) aggressive
27) Ken's Candy has been selling to Art's Quik Mart for thirty years. Lately Art's has been paying its bills increasingly slowly. Right now, Ken's Candy has $10,000 in accounts receivable on its books from Art's Quik Mart for candy sold to Art's over the last six months. Art's Quik Mart says it will pay the bill as soon as it can. Ken's Candy is trying to decide whether it should increase its allowance for uncollectible accounts to cover the amount owed by Art's. If Ken's Candy does not increase the allowance, this accounting choice would be considered ________.
A) conservative
B) fundamental
C) basic
D) aggressive
28) A firm with high quality earnings may indicate the firm ________.
A) has fewer internal controls
B) postpones recognition of revenue
C) delays recognition of expenses
D) has fewer external risks than internal risks
29) A firm with low quality earnings may indicate the firm ________.
A) has made conservative accounting choices resulting in lower net income
B) postpones recognition of revenue
C) delays recognition of expenses
D) has fewer external risks than internal risks
30) Quality of earnings is considered higher if management ________.
A) depreciates its long-term assets over a shorter period than the industry average
B) uses larger salvage values for its long-term, depreciable assets
C) uses a lower percentage for its bad debts expense estimate
D) reduces its internal controls