51.Information is considered material if:
a.it would have a bearing on decisions of those who use the financial statements.
b.there is a substantial likelihood that a reasonable investor would not be concerned about the information.
c.an item is so insignificant that users would likely ignore it.
d.the FASB explicitly rules the transaction or item to be material.
52.Why would a company recognize the cost of an asset on its balance sheet rather than treat it as an expense on the date it is acquired?
Conservatism requires this recognition.
Matching requires costs to be matched against the related revenues of the asset.
Strictly to record the amount in the most economically favorable manner possible for the company.
The stable dollar concept will not allow inflation to be added to expenses, but does allow inflation to be added to assets.
53.When in doubt, financial statements should:
understate assets, overstate liabilities, delay the recognition of gains, and accelerate the recognition of losses.
understate assets and liabilities and delay the recognition of gains and losses.
understate assets, overstate liabilities, and delay the recognition of gains and losses.
overstate assets and understate liabilities.
54.Jeter Company ordered 400 toy wagons from Lamar, Inc. on May 1, 2010. Jeter Company paid for them on May 20 at a cost of $2 each. Jeter sold 50 of them on June 2, 2010, for $4 each to Gilloz Company. Gilloz Company paid Jeter on June 10.
On which date should Jeter Company recognize revenue?
a.May 1
b.May 20
c.June 10
d.June 2
55.Jeter Company ordered 400 toy wagons from Lamar, Inc. on May 1, 2010. Jeter Company paid for them on May 20 at a cost of $2 each. Jeter sold 50 of them on June 2, 2010, for $4 each to Gilloz Company. Gilloz Company paid Jeter on June 10.
How much revenue should Jeter Company recognize at the preferred point of revenue recognition?
a.$240
b.$100
c.$1,000
d.$200
56.Jeter Company ordered 400 toy wagons from Lamar, Inc. on May 1, 2010. Jeter Company paid for them on May 20 at a cost of $2 each. Jeter sold 50 of them on June 2, 2010, for $4 each to Gilloz Company. Gilloz Company paid Jeter on June 10.
Which amount represents Jeter Company’s input markets related to this sale?
a.$300
b.$800
c.$1,600
d.$250
57.Equipment with an original cost of $39,000 has a fair market value of $34,000, current replacement cost of $41,000, and a depreciated value of $36,000 on December 31, 2010. At what amount would net equipment be measured on the December 31, 2010 balance sheet?
a.$38,000
b.$36,000
c.$41,000
d.$34,000
58.Short-term investments have an original cost of $29,000 and a market price of $31,000 at December 31, 2010. At what amount would the investments be measured on the December 31, 2010 balance sheet?
a.$29,000
b.$31,000
c.($2,000)
d.$2,000
59.Sheena Company has accounts receivable of $13,000, with an estimated net realizable value of $12,000 on December 31, 2010. At what amount would the accounts receivable be measured on the December 31, 2010 balance sheet?
a.$1,000
b.$13,000
c.$12,000
d.($1,000)
60.Seinfeld Company has land with an original cost of $68,000 and a fair market value of $81,000. Seinfeld has considered selling its business next year and listing the land with a realtor for $100,000. At what amount would land be measured on the December 31, 2010 balance sheet?
a.$100,000
b.$81,000
c.$15,000
d.$68,000