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Please answer the following questions:

QUESTION 11

In a business combination, goodwill is defined as the excess of cost over the

a.	fair value of assets acquired
b.	fair value of assets acquired less the liabilities assumed
c.	book value of assets acquired less the liabilities assumed
d.	net book value of assets acquired

QUESTION 12

When a company purchases land with a building on it and immediately tears down the building so that the land can be used for the construction of a plant, the costs incurred to tear down the building should be

a.	amortized over the estimated time period between the tearing down of the building and the completion of the plant
b.	expensed as incurred
c.	added to the cost of the plant
d.	added to the cost of the land

QUESTION 13

The amount reported as "Cash" on a company's balance sheet normally should exclude

a.	postdated checks that are payable to the company
b.	cash in a payroll account
c.	undelivered checks written and signed by the company
d.	petty cash

QUESTION 14

Bond discount should be presented in the financial statements of the issuer as a(n)

a.	contra liability
b.	adjunct liability
c.	deferred charge
d.	contra asset

QUESTION 15

A discount given to a customer for purchasing a large volume of merchandise is typically referred to as a

a.	quantity discount
b.	cash discount
c.	trade discount
d.	size discount

QUESTION 16

Shepard Construction Company has consistently used the percentage-of-completion method. On January 10, 2008, Shepard began work on a $3,000,000 construction contract. At the inception date, the estimated cost of construction was $2,250,000. The following data relate to the progress of the contract:

Gross profit recognized at December 31, 2008.................... $300,000

Costs incurred Jan. 10, 2008, through Dec. 31, 2009.......... 1,800,000

Estimated cost to complete at December 31, 2009.............. 600,000

How much gross profit should Shepard recognize for the year ended December 31, 2009

a.	$150,000
b.	$262,500
c.	$300,000
d.	$450,000

QUESTION 17

For a bond issue that sells for more than its face value, the market rate of interest is

a.	dependent on the rate stated on the bond
b.	equal to the rate stated on the bond
c.	less than the rate stated on the bond
d.	higher than the rate stated on the bond

QUESTION 18

When the interest payments dates of a bond are May 1 and November 1, and the bond is issued on June 1, the amount of interest expense at December 31 of the year of issuance would be for

a.	two months
b.	six months
c.	seven months
d.	eight months

QUESTION 19

In accordance with generally accepted accounting principles, which of the following methods of amortization is normally recommended for intangible assets?

a.	Sum-of-the-years'-digits
b.	Straight-line
c.	Group composite
d.	Double-declining-balance

QUESTION 20

The sum-of-the-years'-digits method of depreciation is being used for a machine with a five-year estimated useful life. What would be the fraction applied to the cost to be depreciated in the fourth year?

a.	4/5
b.	2/5
c.	4/15
d.	2/15

QUESTION 21

Depreciation of noncurrent operating assets is an accounting process for the purpose of

a.	reporting declining asset values on the balance sheet
b.	allocating asset costs over the periods benefitted by the use of the assets
c.	accounting for costs to reflect the change in general price levels
d.	setting aside funds to replace assets when their economic usefulness expires

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