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In 2003, FASB and IASB met and established four criteria for establishing revenue recognition. To recognize revenue, which of the following conditions must be present?

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In 2003, FASB and IASB met and established four criteria for establishing revenue recognition. To recognize revenue, which of the following conditions must be present?;?;A change in assets has occurred and can be appropriately measured.;?;Payment for the sale must be received prior to recognizing the revenue.;?;The product or deliverable, in the case of a service business, has been received by the customer.;?;A promise to deliver has been established.;2;Failure to provide any care in fulfilling a duty owed to another is called;?;gross negligence;?;constructive fraud;?;breach of contract;?;negligence;3;Which of the following is a fundamental characteristic of the market system?;?;Unselfish behavior;?;Central planning by government;?;Government-set wages and prices;?;Property rights;4;The income effect indicates that;?;consumers should substitute among various products until the marginal utility from the last unit of each product purchased is the same;?;a rise in money income will cause consumers to buy smaller quantities of normal goods;?;when the price of a product falls, a consumer will be able to buy more of it with a specific income;?;when the price of a product falls, the lower price will induce the consumer to buy more of that product now that it is relatively cheaper;5;The price elasticity of demand coefficient measures;?;the slope of the demand curve;?;how far business executives can stretch their fixed costs;?;buyer responsiveness to price changes;?;the extent to which a demand curve shifts as incomes change;6;A normative statement is one that;?;applies only to microeconomics;?;is based on the law of averages;?;is based on value judgments;?;applies to macroeconomics;7;Many conflicts of interest in business contracts can be remedied ethically by which of the following?;?;Deception and disclosure;?;Camouflage and consent;?;Disclosure and consent;?;Conflicts of interest can never be remedied ethically;8;Four professional general standards and responsibilities for Certified Public Accountants are quality control and assurance, professional judgment, competence, and;?;integrity;?;diligence;?;independence;?;knowledge;9;In 2002, Adelphia Cable filed bankruptcy when it was discovered that;?;excess fictitious expenses of $1 million were added to the income statement;?;bank debt in excess of $2.3 billion was not shown on the financial statements;?;assets on the financial statements were considerably undervalued;?;sales in excess of $72 billion were omitted from the financial statements;When budgets are used to measure performance, there is a danger that budgetary slack may occur. This happens when;?;sales budgets are set too high and cost budgets are set too low;?;sales budgets are set too low and cost budgets are set too high;?;sales budgets are set too low and cost budgets are set too low;?;sales budgets are set too high and cost budgets are set too high;11;ABC Company owes XYZ Enterprises $1 million for goods purchased from XYZ over a year ago. XYZ Enterprises continues to list the $1 million in their accounts receivable balance and does not record any allowance for doubtful accounts. XYZ Enterprises is failing to follow;?;SFAS 169;?;Financial Accounting Standards Board FAS 157;?;Financial Accounting Standards Board Statement No. 5;?;SFAS 101;12) The EU Privacy Directive presents problems for the United States in that;?;data may not be transferred to a non-EU entity unless guarantees are provided that equal security measures are in place;?;transferred data may not be translated into another language;?;high transfer charges are required to be paid by the recipient in the currency of the country transferring the data;?;several layers of approval are necessary before any data may be transferred to a non-EU entity;13) When revenue is recognized and shipment has not been made and the criteria for recognizing revenue on bill-and-hold transactions set out in SEC Staff Accounting Bulletin No. 101 have not been met, this is known as;?;timely revenue recognition;?;postrevenue recognition;?;premature revenue recognition;?;conservative revenue recognition;14;According to the Agency Theory, in a corporation there are two types of information consumers known as;?;principals and vendors;?;customers and agents;?;vendors and customers;?;agents and principals;15;Tom Donaldson and Tom Dunfee are proponents of ethical guidelines related to technology that are based on differentiating hypernorms from nonhypernorms. This theory is known as;?;Integrative Social Contracts Theory;?;Transparent Ethical Dilemma Theory;?;Electronic Communications Privacy Theory;?;Social Contract Network Theory;When the economist says that economic wants are insatiable, this means that;?;economic resources?land, labor, capital, and entrepreneurial ability?are scarce;?;these wants are virtually unlimited and therefore incapable of complete satisfaction;?;the structure of consumer demand varies from time to time and from country to country;?;economic resources are valuable only because they can be used to produce consumer goods;17;The pursuit of self-interest;?;is highly detrimental to the market system;?;means the same as selfishness;?;gives direction to the market system;?;is reflected in the behavior of firms, but not in the behavior of consumers;18) The bankruptcy of WorldCom in 2002 was due to the company?s actions in;?;expensing equipment purchases rather than capitalizing these purchases;?;failing to record revenues;?;classifying expenses as assets;?;recording fictitious liabilities;19) Productive efficiency refers to;?;the production of the product-mix most wanted by society;?;production at some point inside of the production possibilities curve;?;the full employment of all available resources;?;the use of the least-cost method of production;20;Agency costs arise when agents fail to act in the best interests of the principals. One example of losses from poor decisions would be;?;purchasing inferior material to earn yearly bonus;?;investing additional funds in profitable projects;?;prioritizing projects, according to the best interests of the corporation;?;increasing the scope of the audit of the financial statements;21) If the price of normal good X rises, the income;?;effect will induce the consumer to buy more of X and the substitution effect will induce him to buy less;?;and substitution effects will both induce the consumer to buy more of X;?;effect will induce the consumer to buy less of X and the substitution will induce him to buy more;?;and substitution effects will both induce the consumer to buy less of X;22) Section 55 of the Principles of Professional Conduct of the AICPA states that;?;members should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professionalism;?;a member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities;?;a member should observe the profession?s technical and ethical standards, strive continually to improve competence and quality of services, and discharge professional responsibility to the best of the member?s ability;?;members should perform all professional responsibilities with the highest sense of integrity;23) The concept of economic efficiency is primarily concerned with;?;the limited wants-unlimited resources dilemma;?;the conservation of irreplaceable natural resources;?;considerations of equity in the distribution of wealth;?;obtaining the maximum output from available resources;24;Which of the following is a normative statement?;?;The temperature is high today.;?;It is too hot to play tennis today.;?;It will cool off later this evening.;?;The humidity is high today.;25;Suppose that as the price of Y falls from $2.00 to $1.90 the quantity of Y demanded increases from 110 to 118. Then, the price elasticity of demand is;?;4.00;?;3.94;?;2.09;?;1.37;26) Other things equal, an excise tax on a product will;?;increase its supply;?;increase the quantity sold;?;increase its demand;?;increase its price;27) If a conflict of interest arises prior to entering into a business contract, the parties should;?;cease and desist because all conflicts of interest are irreconcilable;?;determine the type of conflict and if disclosure of the conflict of interest is sufficient to proceed with the contract;?;commence a cooling-off period until the conflict is removed;?;stop negotiations immediately and contact a mediator to negotiate the terms of the contract;28) Assuming an economy has fixed quantities of resources, that economy;?;is able to produce the same amount of output regardless of the production technologies it chooses;?;is able to satisfy all consumer wants;?;is more efficient, the larger the amount of goods and services it produces;?;will produce the same output whether or not resources are used efficiently;29) When evaluating the performance of managers in investment centers, performance metrics should be based on;?;only costs under their control;?;revenues, costs, and investments under their control;?;only investments under their control;?;revenue and costs under their control;30;When applying for a bank loan or trade credit, one way a company can appear to be in a healthier financial position would be to;?;overstate its expenses;?;understate its sales;?;undervalue its assets;?;understate its liabilities

 

Paper#30369 | Written in 18-Jul-2015

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