會計審計英語 習(xí)題修訂（賀欣）

1、會計審計英語習(xí)題修訂Part 1 Accounting PrincipleAccounting and Its EnvironmentQUESTIONSAccounting has been defined as a service activity. Who is served by accounting and how are they benefited?What are the major objectives of financial reporting as specified by the IASB?Briefly describe the four traditional as

2、sumptions that influence the conceptual framework.Identify and describe the underlying assumptions specified by the IASB.Alan Rod has recently completed his first year of studying accounting. His instructor for next semester has indicated that the primary focus will be the area of financial accounti

3、ng.Differentiate between financial accounting and managerial accounting.One part of financial accounting involves the preparation of financial statements. What are the financial statements most frequently provided?What is the difference between financial statements and financial reporting?Accounting

4、 Concepts and PrinciplesQUESTIONSOne characteristic of useful accounting information is understandability. Understandable to whom?Distinguish between the qualities of relevance and faithful presentation.Does faithful presentation imply absolute accuracy? Explain.Define comparability.Why is it so dif

5、ficult to measure the cost and the benefit of accounting information?For each item below, indicate to which category of elements of financial statements it belongs.(a) Retained earnings (b) Sales(c) Additional paid-in capital(d) Inventory(e) Depreciation(f) Dividends(g) Gain on sale of investment(h)

6、Interest payable(i)Loss on sale of equipment(j) Issuance of common stockWhat three elements are contained in a balance sheet?What are the two measurement methods of performance that may be used to determine income? How do they differ?shares were selling for $9 a share. What amount should Mini Corp,

7、record for the patent?In January, 2006, Findley Corporation purchased a patent for a new consumer product for $720 000. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten y

8、ears. During 2011 the product was permanently removed from the market under governmental order because of a potential health hazard present in the product. What amount should Findley charge to expense during 2011, assuming amortization is recorded at the end of each year?During 2010, Noller Co. sold

9、 equipment that had cost $98 000 for $58 800. This resulted in a gain of $4 300. The balance in Accumulated Depreciation-Equipment was $325 000 on January 1, 2010, and $310 000 on December 31. No other equipment was disposed of during 2010. What was the Depreciation expense for 2010?On January 1, 20

10、11, Woon Inc. purchased equipment with a cost of HK$4 668 000 a useful life of 12 years and no salvage value. The company uses straight-line depreciation. At December 31, 2011, the company determines that impairment indicators are present. The fair value less cost to sell the asset is estimated to b

11、e Hk$4 620 000. The assets value-in-use is estimated to be HK$4 305 000. There is no change in the assefs useful life or salvage value. What is Loss on Impairment on the 2011 income statement?EXERCISESExercise 1. During 2012, Light Company purchased trading securities as a short-term investment. The

12、 costs of the securities and their market values on December 31, 2012, are listed below: SecurityCostMarket value, December 31,2012C220000226000At the beginning of 2012, Light Company had no investment in trading securities. Before any adjustments related to these trading securities, Light Company h

13、ad net income of $300 000.InstructionsWhat is net income after making any necessary trading security adjustments? (Ignore income taxes.)What would net income be if the market value of Security B were $95 000?Exercise 2. On January 10, 2012, Booker Inc. acquired 16 000 shares of the outstanding commo

14、n stock of Pacific Company for $800 000. at the time of purchase, Pacific Company had outstanding 80 000 shares with a book value of $4 million. On December 31, 2012, the following events took place.Pacific reported net income of $180 000 for the year 2012.Booker received from Pacific a dividend of

15、$0.75 per share of common stock.The market value of Pacific Company stock had temporarily declined to $40 per share.InstructionsPrepare the entries that would be required to reflect the purchase and subsequent events on the books of Booker Inc., assuming the equity method is appropriate.Exercise 3.

16、A machine is purchased at the beginning of 2012 for $36 000. Its estimated life is 6 years. Freight costs on the machine are $2 000. Installation costs are $1 200. The machine is estimated to have a residual value of $500 and a useful life of 40 000 hours. It was used 6 000 hours in 2012.Instruction

17、sWhat is the cost of the machine for accounting purposes?Compute the depreciation charge for 2012 using (a) the straight-line method and (b) the service-hours method.Exercise 4. Delta Company purchased a plant building 10 years ago for $1 300 000. The building has been depreciated using the straight

18、-line method with a 30-year useful life and 10% residual value. Deltas operations have experienced significant losses for the past 2 years, so Delta has decided that the building should be evaluated for possible impairment. Delta estimated that the recoverable amount of the building is $780 000.Inst

19、ructionsDetermine whether an impairment loss should be recognized.Exercise 5. Needle Company purchased an asset for $17 000 on January 2, 2010. The asset has an expected residual value of $1 000. the depreciation expense for 2010 and 2011 is shown next for two alternative depreciation methods:YearMe

20、thod AMethod B2010$4 000$6 40020114 0004 800InstructionsWhich depreciation method is the company using in each example?Compute the depreciation expense for 2012 and 2013 under each method.Exercise 6. On January 1, 2010, the Easy Corporation purchased some machinery. The machinery has an estimated li

21、fe of 10 years and an estimated residual value of $5 000. The depreciation on this machinery was $20 000 in 2012.InstructionsCompute the acquisition cost of the equipment under the following depreciation methods:Straight-lineSum-of-the-years9-digitsDouble-declining-balanceChapter 7 LiabilitiesQUESTI

22、ONSDistinguish between current and noncurrent liabilities.Define legal and nonlegal liabilities and give some examples.What is meant by market rate of interest, stated or contract rate and effective or yield rate? Which of these rates changes during the lifetime of the bond issue?What are the distin

23、guishing features of convertible debt securities? What questions relate to the nature of this type of security?How does the accounting for convertible debt under IAS32?The appropriate method of amortizing a premium or discount on issuance of bonds is the effective interest method. What is the effect

24、ive interest method amortization and how is it different from and similar to the straight-line method of amortization?On September 1, Hydra purchased $9 500 of inventory items on credit with the terms 1/15, net 30, FOB destination. Freight charges were $200. Payment for the purchase was made on Sept

25、ember 18. Assuming Hydra uses the perpetual inventory system and the net method of accounting for purchase discounts, what amount is recorded as accounts payable from this purchase?Vista newspapers sold 4 000 of annual subscriptions at $125 each on September 1. How much unearned revenue will exist a

26、s of December 31?On January 1, Martinez Inc. issued $3 000 000, 11% bonds for $3 195 000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond premium. At the end of the first year, what amount

27、 should Martinez report for bonds payable?Mann, Inc., which owes Doran Co. $600 000 in notes payable with accrued interest of $54 000, is in financial difficulty. To settle the debt, Doran agrees to accept from Mann equipment with a fair value of $570 000, an original cost of $840 000, and accumulat

28、ed depreciation of $195 000. What is the gain or loss to Mann on the settlement of the debt? What is the gain or loss to Mann on the transfer of the equipment?EXERCISESExercise 1. On December 1, 2012, Sun Company purchased merchandise, invoice price $25 000, and issued a 12%, 120-day note to Moon Co

29、mpany. Sun uses the calendar year as its fiscal year and uses the periodic inventory system.InstructionsPrepare journal entries on Sun Companys books to record the preceding information, including the adjusting entry at the end of the year and payment of the note at maturity.Exercise 2. During Augus

30、t, Mountain Company had following summary transactions:Cash sales of $210 000, subject to sales taxes of 6%.Sales on account of $260 000, subject to sales taxes of 6%.Paid the sale taxes to the tax authority.InstructionsPrepare journal entries to record the preceding transactions.Exercise 3. On Augu

31、st 1, 2011 Apple Company had ready for sale 2 000 large scientific calculators. During the next 5 months, 1 600 calculators were sold at $460 each with a 1 -year warranty. Apple Company estimated that the warranty cost on each calculator would probably average $10 per unit. In current period, Apple

32、Company incurred warranty costs of $9 200. Cost for 2012 were $7 000.InstructionsPrepare journal entries for the preceding transactions, using the sales warranty accrual method.Exercise 4. Listed below are several issuances of bonds.Company A sold 1 500 of its $1 000, 8% stated-rate bonds when the m

33、arket rate was 7%.Company B sold 500 of its $2 000, 8.5% bonds to yield 9%.Company C sold 5 000 of its 12% contract-rate bonds with a stated value of $1 000 at an effective rate of 12%.InstructionsIn each of the following independent cases, state whether the bonds were issued at par, a premium or a

34、discount? Explain your answers.Exercise 5. On January 1, 2011, Tree Company sold $100 000 of 10-year, 8% bonds at 92.5, an effective rate of 9%. Interest is to be paid on July 1 and December 31.InstructionsCompute the premium or discount to be amortized in 2011 and 2012 using (a) the straight-line m

35、ethod and (b) the effective-interest method. Make journal entries to record the amortization when the effective-interest method is used.Owners EquityQUESTIONSWhat basic rights are held by common stockholders?Distinguish between common and preferred stock.Why might a company purchase its own stock?Wh

36、y is the distinction between paid-in capital and retained earnings important?Describe the accounting entry for a stock dividend, if any.Dividends are sometimes said to have been paid “out of retained earnings.What is the error, if any, in that statement?EXERCISESExercise 1.Johns Corporation issued 6

37、00 shares of $10 par value common stock for $8,100.InstructionsPrepare Johns Corporation journal entry.Exercise 2.Paul Corporation issued 1200 shares of no-par common stock for $20,200.InstructionsPrepare Paufs journal entry if (a) the stock has no stated value, and (b) the stock has a stated value

38、of $2 per share.Exercise 3.Mick Inc. has outstanding 10,000 shares of $10 par value common stock. On July 1, 2015, Mick reacquired 100 shares at $85 per share. On September 1, Mick reissued 60 shares at $90 per share. On November 1, Mick reissued 40 shares at $83 per share.InstructionsPrepare Micks

39、journal entries to record these transactions using (a) the cost method, (b) the par value method.Exercise 4.Micro Machines Inc. declared a cash dividend of $1.50 per share on its 1 million outstanding shares. The dividend was declared on August 1, payable on September 9 to all stockholders of record

40、 on August 15.InstructionsPrepare all journal entries necessary on those three dates.Exercise 5.Horen Corporation has outstanding 200,000 shares of $10 par value common stock. The corporation declares a 5% stock dividend when the fair value of the stock is $65 per share.InstructionsPrepare the journ

41、al entries for Horen Corporation for both the date of declaration and the date of distribution.Exercise 6.Use the information from Exercise 5, but assume Horen Corporation declared a 100% stock dividend rather than a 5% stock dividend.InstructionsPrepare the journal entries for both the date of decl

42、aration and the date of distribution.PerformanceQUESTIONSDistinguish between revenue and gain.What is income and when is income recognized?What are the reasons that a company gives trade discounts? Why are trade discounts not recorded in the accounts like cash discounts?How is the matching principle

43、 applied to expenses recognition?Sales contract with expanded collection period generally include interest. How should the interest be treated for accounting purposes?EXERCISESExercise 1.Gail Devers Corporation sells farm machinery on the installment plan. On July 1, 2015, Devers entered into an ins

44、tallment-sale contract with Gwen Torrence Inc. for a 10-year period. Equal annual payments under the installment sale are $100,000 and are due on July 1. The first payment was made on July 1,2015.Additional informationThe amount that would be realized on an outright sale of similar farm machinery is

45、 $676,000.The cost of the farm machinery sold to Gwen Torrence Inc. is $500,000.The finance charges relating to the installment period are $324,000 based on a stated interest rate of 10%, which is appropriate.Circumstances are such that the collection of the installments due under the contract is re

46、asonably assured.InstructionsWhat income or loss before income taxes should Devers record for the year ended December 31, 2015, as a result of the transaction above?Exercise 2.On June 3, David Company sold to Kim merchandise having a sale price of $5,000 with terms of 2/10, n/60, f.o.b. shipping poi

47、nt. Upon receipt of the goods, June 5, Kim notified David Company that merchandise costing $400 contained flaws that rendered it worthless. The same day David Company issued a credit memo covering the worthless merchandise and asked that it be returned at company expense. The freight on the returned

48、 merchandise was $24, paid by David Company on June 7. On June 12, the company received a check for the balance due from Kim.InstructionsPrepare journal entries on David Company books to record all the events noted above.Prepare the journal entry, assuming that Kim did not remit payment until August

49、 5.Exercise 3.On November 1, Magi Company sold goods for $5,000. The terms of the sale were 3/10, n/40. Payment in satisfaction of $2,000 of this amount was received on November 9. Payment in satisfaction of the remaining $3,000 was received on December 9.InstructionsHow much cash did Magi collect f

50、rom this $5,000 account?What journal entries would Magi make on November 9 and December 9?Exercise 4.Scooby Music sold CDs to retailers and recorded sales revenue of $800,000. During 2015, retailers returned CDs to Scooby and were granted credit of $78,000. Past experience indicates that the normal

51、return rate is 15%.InstructionsPrepare Scoobys entries to record (a) the $78,000 of returns and (b) estimated returns at December 31,2015.Exercise 5.On July 23, Louis Company sold goods costing $3,000 on account for $4,500. The terms of the sale were n/30. Payment in satisfaction of $3,000 of this a

52、mount was received on August 17. Also on August 17, the customer returned goods costing $ 1,000 (with a sales price of $1,500). The customer reported that the goods did not meet the required specifications.InstructionsMake the journal entry necessary on July 23 to record the sale. Louis uses a perpe

53、tual inventory system.Make the journal entry necessary on August 17 to record the cash collection.Make the journal entry necessary on August 17 to record the return of the goods.Chapter 10 Financial Statement AnalysisQUESTIONSWhat are the puiposes of financial statement analysis?In analyzing a compa

54、ny9 performance, what factors should be taken into account?Public companies provide the annual reports according to the securities regulations. Discuss the information you would find in the annual reports of a public company.There are many other sources providing information useful in financial stat

55、ement analysis. Discuss the information you would find other than the annual report.What is common-size statement? How to prepare the common-size statement?In ratio analysis, how to compare the ratios?What is DuPont system?EXERCISESExercise 1.The following data is subtracted from the annual report o

56、f one listing company ($ in millions).Income Statement20 x720 x620 x5Total Revenue98,78691,42491, 134Total Cost57, 05753, 12954,602Gross Profit41, 72938, 29536,532Expense and Other Income:Selling, general and administrative22, 06020, 25921,314Research, development and engineering6,1536, 1075,842Inte

57、llectual property and custom development income(958)(900)(948)Other (income) and expense(626)(766)(2, 122)Interest expense611278220Total Expense and Other Income27, 24024, 97824,306Income from Continuing Operations Before Income Taxes14, 48913,31712, 226Provision for income taxes4, 0713,9014, 232Inc

58、ome from Continuing Operations10,4189,4167, 994Discontinued Operations:(Loss)/earnings from discontinued operations, net of tax(00)76(24)Income before cumulative effect of change in accounting principle10, 4189, 4927, 970Cumulative effect of change in accounting principle, net of tax(36)Net Income$1

59、0, 418$ 9, 492$ 7, 934Balance sheetAT DECEMBER 31:20 x720 x6AssetsCurrent assets:Cash and cash equivalents$14,991$8,022Marketable securities1, 1552,634Notes and accounts receivable一trade (net of allowances)11,42810, 789Short-term financing receivables (net of allowances)16,28915,095Other accounts re

60、ceivable (net of allowances)1,072964Receivables28,78926, 848Inventories2, 6642,810Deferred taxes16871,806Prepaid expenses and other current assets3, 8912539Total current assets53,17744660Plant, rental machines and other property38, 58436521Less: Accumulated depreciation23, 50322082Plant, rental mach