Analytical Issues In Financial Accounting Done
Question 1:
2A4-LS12
All of the following are forms of off-balance sheet financing except:
Completing a horizontal merger.
Creating a special purpose entity.
Factoring accounts receivable.
Forming a joint venture.
The four common techniques used by companies to engage in off-balance sheet financing are; factoring of receivables, creating a special purpose entity, operating leases and joint ventures.
Question 2:
2A4-LS34
Which of the following costs, when subtracted from total revenue, yields economic profit?
*Source: Retired ICMA CMA Exam Questions.
Variable costs.
Recurring operating costs.
Fixed and variable costs.
Opportunity costs of all inputs.
Total revenue minus opportunity costs of all inputs = economic profit.
Question 3:
2A4-LS10
SFAS 52 permits two different methods for converting the financial statements of foreign subsidiaries into U.S. dollars. Transaction gains and losses as a result of foreign currency translation are reported as:
Income from discontinued operations.
An extra-ordinary item.
Income from continuing operations.
An adjustment to retained earnings.
Foreign currency exchange-rate adjustments to a company's financial statements are recorded as "exchange gains" in current period activity.
Question 4:
2A4-CQ04
Paulson Incorporated acquired all of the common stock of Sampson Company on January 1, 20x1 for $80,000 LCU, which was equal to the fair value of the company. Paulson continued to operate Sampson as a subsidiary in the foreign country. On January 1, 20x1 Sampson borrowed $200,000 LCU and signed a 5-year note agreeing to pay 10% annual interest beginning on January 1, 20x2. Sampson purchased a building for $280,000 LCU and estimated its useful life as 20 years with no salvage value. The building will be depreciated using the straight-line method. The subsidiary rents the building for $10,000 LCU per month and as of December 31, 20x1, they received 11 payments for the year. During the year, $8,000 in maintenance expenses
2A4-LS12
All of the following are forms of off-balance sheet financing except:
Completing a horizontal merger.
Creating a special purpose entity.
Factoring accounts receivable.
Forming a joint venture.
The four common techniques used by companies to engage in off-balance sheet financing are; factoring of receivables, creating a special purpose entity, operating leases and joint ventures.
Question 2:
2A4-LS34
Which of the following costs, when subtracted from total revenue, yields economic profit?
*Source: Retired ICMA CMA Exam Questions.
Variable costs.
Recurring operating costs.
Fixed and variable costs.
Opportunity costs of all inputs.
Total revenue minus opportunity costs of all inputs = economic profit.
Question 3:
2A4-LS10
SFAS 52 permits two different methods for converting the financial statements of foreign subsidiaries into U.S. dollars. Transaction gains and losses as a result of foreign currency translation are reported as:
Income from discontinued operations.
An extra-ordinary item.
Income from continuing operations.
An adjustment to retained earnings.
Foreign currency exchange-rate adjustments to a company's financial statements are recorded as "exchange gains" in current period activity.
Question 4:
2A4-CQ04
Paulson Incorporated acquired all of the common stock of Sampson Company on January 1, 20x1 for $80,000 LCU, which was equal to the fair value of the company. Paulson continued to operate Sampson as a subsidiary in the foreign country. On January 1, 20x1 Sampson borrowed $200,000 LCU and signed a 5-year note agreeing to pay 10% annual interest beginning on January 1, 20x2. Sampson purchased a building for $280,000 LCU and estimated its useful life as 20 years with no salvage value. The building will be depreciated using the straight-line method. The subsidiary rents the building for $10,000 LCU per month and as of December 31, 20x1, they received 11 payments for the year. During the year, $8,000 in maintenance expenses