Question 5 Which one of the following is FALSE regarding earnings management? Earnings management is a purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain Earnings management can be accomplished through misclassifying expenses to extraordinary items. ○ Management incentive may lead to earnings management. Earnings management should be a common business practice. 2 pts Question 1 Valuating assets using different valuation methods (e.g., historical cost, replacement cost, selling price, NRV, etc) will cause total assets less accurate because: ○ Assets valued with different costs do not represent their true value Assets valued with different costs are inconsistent with GAAP Assets valued with different costs show a lack of additivity ○ Assets valued with different costs are classified differently Question 2 Asset valuation is based on: ○ The replacement cost. The fair market value. The net present value of future economic benefit. O The original acquisition cost. Question 3 Which one of the following should not be reported as a nonoperating item? Discontinued operations ● Extraordinary items Accounting changes O Foreign currency risk 2 pts 2 pts 2 pts Question 4 The recognition of revenues or expenses in accrual basis of accounting does not depend on relevant cash transaction. 2 pts True O False
Question 5 Which one of the following is FALSE regarding earnings management? Earnings management is a purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain Earnings management can be accomplished through misclassifying expenses to extraordinary items. ○ Management incentive may lead to earnings management. Earnings management should be a common business practice. 2 pts Question 1 Valuating assets using different valuation methods (e.g., historical cost, replacement cost, selling price, NRV, etc) will cause total assets less accurate because: ○ Assets valued with different costs do not represent their true value Assets valued with different costs are inconsistent with GAAP Assets valued with different costs show a lack of additivity ○ Assets valued with different costs are classified differently Question 2 Asset valuation is based on: ○ The replacement cost. The fair market value. The net present value of future economic benefit. O The original acquisition cost. Question 3 Which one of the following should not be reported as a nonoperating item? Discontinued operations ● Extraordinary items Accounting changes O Foreign currency risk 2 pts 2 pts 2 pts Question 4 The recognition of revenues or expenses in accrual basis of accounting does not depend on relevant cash transaction. 2 pts True O False
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...
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Transcribed Image Text:Question 5
Which one of the following is FALSE regarding earnings management?
Earnings management is a purposeful intervention in the external financial reporting process, with the intent of obtaining some private gain
Earnings management can be accomplished through misclassifying expenses to extraordinary items.
○ Management incentive may lead to earnings management.
Earnings management should be a common business practice.
2 pts
Transcribed Image Text:Question 1
Valuating assets using different valuation methods (e.g., historical cost, replacement cost, selling price, NRV, etc) will cause total assets less accurate because:
○ Assets valued with different costs do not represent their true value
Assets valued with different costs are inconsistent with GAAP
Assets valued with different costs show a lack of additivity
○ Assets valued with different costs are classified differently
Question 2
Asset valuation is based on:
○ The replacement cost.
The fair market value.
The net present value of future economic benefit.
O The original acquisition cost.
Question 3
Which one of the following should not be reported as a nonoperating item?
Discontinued operations
● Extraordinary items
Accounting changes
O Foreign currency risk
2 pts
2 pts
2 pts
Question 4
The recognition of revenues or expenses in accrual basis of accounting does not depend on relevant cash transaction.
2 pts
True
O False
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