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NEW QUESTION 50
Which of the following situations is an example of materiality in accounting?

A. Company A receives an order from its largest customer, but it is a relatively small order. Company A does not make any entry into the accounts at the time it receives the order.B. Company A wants to purchase $100,000 worth of fabric to use in its upholstery business. However, the supplier will not grant credit for a purchase that large, so Company A reduces the order to $20,000.C. Company A initiates a relatively small new advertising campaign. Company A decides to include these costs as part of selling, general, and administrative expenses on the income statement rather than disclose them separately.D. Company A owns land that it purchased for $100,000 twenty years ago. The land is now appraised at $250,000, but Company A does not adjust the value of the land in its accounts.

Answer: C

 

NEW QUESTION 51
A company's Balance Sheet for the year ended Dec. 31, 2013 is as follows:

(In millions)
The company is MOST likely in which of the following industries?

A. PharmaceuticalB. Civil aviationC. Commercial bankingD. Retailing

Answer: D

 

NEW QUESTION 52
What can an analyst conclude about an industry that has a high level of government regulation, including permits and licenses?

A. The willingness to pay for products produced in this industry will increase as more firms enter.B. There will likely be few firms in the industry.C. Customers will incur high switching costs if they choose to purchase from a new firm.D. Firms in the industry will earn negative economic profits.

Answer: B

 

NEW QUESTION 53
Changing accounting assumptions from year to year without having justifiable reasons for the changes is a departure from the accounting principle of:

A. VerifiabilityB. ConservatismC. ConsistencyD. Historical cost

Answer: C

 

NEW QUESTION 54
Which of the following options is presented in the above accounting journal entry?

A. Sale of goods on accountB. Sale of fixed assets on creditC. Sale of goods at costD. Capitalization of inventory

Answer: A

 

NEW QUESTION 55
......

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