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HBX CORe Final Examination Sample Questions (Q79-Q84):

NEW QUESTION # 79
Company B sold a service contract that covers a two-year period for $10,000. The service period commenced on July 1, Year 1. Service revenue is recognized evenly throughout the contract period. What amount should Company B report as deferred revenue from this service contract on its balance sheet on December 31, Year 1?

A. $10,000B. $5,000C. $7,500D. $2,500

Answer: C


NEW QUESTION # 80
An individual has an extremely rare item and intends to sell it via an English (open outcry) auction. In which situation should the seller forgo the auction and sell the item for a fixed price?

A. The seller knows that consumers' willingness to pay varies between $500 and $1,000 and knows that only one consumer is willing to pay above $900.B. The seller knows that consumers' willingness to pay varies between $500 and $1,000 and knows that at least three consumers are willing to pay above $950.C. The seller has no information about consumers' willingness to pay.D. The seller knows that consumers' willingness to pay varies between $1,000 and $5,000.

Answer: A


NEW QUESTION # 81
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 # 82
In determining free cash flows, how is the change in net working capital calculated?

A. Current Assets minus Current Liabilities (year projected) - Current Assets minus Current Liabilities (previous year)B. Current Assets (previous year) - Current Assets (year projected)C. Receivables minus Payables (year projected) - Receivables minus Payables (previous year)D. Ending balance of cash (previous year) - Ending balance of cash (year projected)

Answer: A


NEW QUESTION # 83
Which of the following options impact the balances shown in the investing section of the statement of cash flows? (Select all that apply.)

A. Payments made in connection with business acquisitionsB. Sale of investment securitiesC. Proceeds from issuance of common stockD. Stock based compensation expenseE. Financing working capital

Answer: A,B


NEW QUESTION # 84
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