Acct 312 Week 4 Midterm Exam Answers

ACCT 312 Week 4 Midterm Exam Answers

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ACCT 312 Week 4 Midterm Exam Answers

1. Question : (TCO 1) Which event will result in a deferred tax liability?

Student Answer: Accelerated depreciation in the tax return

Interest income on municipal bonds

Subscriptions collected in advance

Estimated warranty expense

Instructor Explanation: See Chapter 16.

Points Received: 20 of 20

Comments:

Question 2. Question : (TCO 1) Which of the following differences between financial accounting and tax accounting ordinarily creates a deferred tax asset?

Student Answer: Tax depreciation in excess of book depreciation

The installment sales method for tax purposes

Revenue collected in advance

None of the above

Instructor Explanation: See Chapter 16.

Points Received: 20 of 20

Comments:

Question 3. Question : (TCO 2) Interest cost is calculated by multiplying the

Student Answer: ABO by the expected return on the plan assets.

ABO by the discount rate.

PBO by the expected return on plan assets.

PBO by the discount rate.

Instructor Explanation: See Chapter 17.

Points Received: 20 of 20

Comments:

Question 4. Question : (TCO 3) Accounting for postretirement healthcare benefits is similar, in most respects, to accounting for

Student Answer: payroll taxes.

health insurance costs for current employees.

pension benefits.

sick pay and vacation pay.

Instructor Explanation: See Chapter 17.

Points Received: 20 of 20

Comments:

Question 5. Question : (TCO 4) Retained earnings represents a company’s

Student Answer: undistributed net assets.

undistributed net income.

extra paid-in capital.

undistributed cash.

Instructor Explanation: See Chapter 18.

Points Received: 20 of 20

Comments:

Question 6. Question : (TCO...