Find Complete and recently updated Correct Question and answers of Generally Accepted Accounting Principles (GAAP). All Answers updated regularly with new questions. Upwork Generally Accepted Accounting Principles (GAAP) test answers of 2016.

Question:* An ordinary share dividend is:

Answer: • Part of the company profits used to reward the shareholders for their investment

Question:* Which of the following is the correct formula for calculating basic EPS as per US GAAP?

Answer: • income available for common stockholders / weighted-average number of common shares outstanding

Question:* Which of the following statements is true about the reporting of operating segments by a business?

Answer: • Publicly-held companies are required to present this information while other companies are allowed to present it.

Question:* Your accounts payable increases from the prior year, what happens on the cash flow statement and in which section?

Answer: • Cash increases - Operating section

Question:* Your accounts payable drops from the prior year, what happens on the cash flow statement and in which section?

Answer: • Cash decreases - Operating section

Question:* Net Income is $150,000, dividends paid to preferred stock holder is $50,000 and weighted-avg number of common shares are 10,000. What is the basic EPS as per US GAAP?

Answer: • $10

Question:* Which of the following is an Operating Activity as per US GAAP classification?

Answer: • Cash paid to employees

Question:* Your accounts receivable drops from the prior year. What happens on the cash flow statement and in which section?

Answer: • Cash increases - Operating section

Question:* In which of the following are profits recognized in full when real estate is sold?

Answer: • Full accrual method

Question:* Which of the following is the formula for return on equity (ROE)?

Answer: • Net Income / Equity

Question:* A client pays ABC Co. $10,000 in December to perform services in 45 days. ABC uses the accrual basis of accounting. In December ABC will debit Cash for $10,000. What will be the other account to balance this entry prepared by ABC?

Answer: • Unearned Revenue

Question:* Which of the following is NOT a valid cost flow assumption for determining the inventory cost?

Answer: • FILO

Question:* Which of the following is an Investing Activity as per US GAAP classification?

Answer: • Sales proceed from fixed assets

Question:* In which of the following accounting methods is profit not recognized until cash payments are greater than the cost of property?

Answer: • Cost recovery method

Question:* Which of the following securities are purchased with the intent of holding them until maturity?

Answer: • Held-to-maturity

Question:* Which of the following is NOT a current asset?

Answer: • Intangible assets

Question:* Which of the following best describes Going Concern?

Answer: • The assumption that a company will operate indefinitely

Question:* Which of the following correctly formulates current ratio?

Answer: • Current Asset / Current Liabilities

Question:* Which of the following is a US GAAP depreciation method for financial and tax reporting?

Answer: • (All of these)

Question:* Under GAAP principles, expenses have to be matched with revenues (as long as it's reasonable to do so). This is an example of which principle?

Answer: • The Matching Principle

Question:* GAAP generally uses one of two measurement principles. Which of the following IS one of these two principles?

Answer: • Fair value principal

Question:* The multiple-step income statement for a merchandiser shows each of the following features EXCEPT:

Answer: • investing activities

Question:* Which of the following methods of presenting cash flow is permitted under US GAAP?

Answer: • Both Direct & Indirect

Question:* What does CPA stand for?

Answer: • Certified Public Accountant

Question:* You pay a dividend, what happens on the cash flow statement and in which section?

Answer: • Cash decreases - Financing section

Question:* Which of the following consists of cash inflows and outflows from transactions that affect a firm's net income?

Answer: • Cash flow from operating activities (CFO)

Question:* Publicly traded companies employ _____ to audit the financial statements for their inclusion in reports to the shareholders.

Answer: • CPAs

Question:* Account receivables are classified as which of the following?

Answer: • Assets

Question:* In which of the following inventory valuation methods is the oldest cost of goods sold (COGS) entry processed first?

Answer: • FIFO

Question:* When applying the full accrual method in retail land sales, which of the following conditions are required by GAAP?

Answer: • (All of these)

Question:* True or false? GAAP is internationally based, whereas IFRS is US-centric.

Answer: • False

Question:* Which of the following securities are purchased with the intent to profit over near term?

Answer: • Trading Securities

Question:* Which of the following is prohibited in US GAAP?

Answer: • Reversal of impairment loss

Question:* All of the following are recognized depreciation methods for GAAP reporting EXCEPT:

Answer: • Modified Accelerated Cost Recovery

Question:* Which organization is most like IASB, but monitors and improves the standards under US GAAP?

Answer: • FASB

Question:* Your accounts receivable increases from the prior year, what happens on the cash flow statement and in which section?

Answer: • Cash decreases - Operating section

Question:* A financial record that uses a highly volatile currency would violate which of the following principles?

Answer: • The monetary unit principle

Question:* Choose the correct statement about GAAP.

Answer: • It is a violation of SEC regulations for publicly traded companies to depart from GAAP.

Question:* ABC company purchases a plot of land for $10,000. In the following year the value of the land increases by 10%. What value should this asset be recorded as?

Answer: • $10,000

Question:* Which of the following securities are purchased with the intent of NEITHER holding them till maturity NOR to get profit over near term?

Answer: • Available for Sale Securities

Question:* Which of the following is NOT a non-current asset?

Answer: • Unearned income

Question:* Which of the following consists of cash inflows and outflows from transactions related to a firm's capital structure ?

Answer: • Cash flow from financing activities (CFF)

Question:* If Earnings before Interest and Taxes (EBIT) is $10,000, interest expense is $500 and number of outstanding common stocks are 20,000, which of the following is the value of interest coverage ratio?

Answer: • 20

Question:* Under US GAAP, minority (non controlling) interest in a subsidary can be reported in which of the following sections of a balance sheet?

Answer: • (All of these)

Question:* Which of the following securities are reported on balance sheets at fair value?

Answer: • Available for Sale and Trading Securities

Question:* Which of the following is a Financing Activity as per US GAAP classification?

Answer: • Proceeds from issuing stocks

Question:* Cost of good sold (COGS) reflects the cost of the most recent purchase in which of the following inventory valuation methods?

Answer: • LIFO

Question:* In which of the following securities are unrealized gains and losses reported in Other Comprehensive Income (as a part of stockholder's equity)?

Answer: • Available for Sale Securities

Question:* Under GAAP which method is NOT allowed for writing-off bad debts

Answer: • Direct write-off method

Question:* When should costs be recognized?

Answer: • When they are probable

Question:* Which of the following securities are reported on the balance sheet at amortized cost?

Answer: • Held-to-maturity

Question:* You receive a dividend, what happens on the cash flow statement and in which section?

Answer: • Cash increases - investing section

Question:* A company has cash of $30,000, accounts receivable of $150,000, inventory of $140,000, and accounts payable of $200,000. Which of the following is correct?

Answer: • The quick ratio is 0.9 : 1 and the current ratio is 1.6 : 1.

Question:* You have depreciation for the past year, what happens on the cash flow statement and in which section?

Answer: • Cash increases - Operating section

Question:* Under US GAAP, when must the fair value of an acquired firm's "in process research and development" be estimated?

Answer: • Before Computing Goodwill

Question:* In the United States, which of the following organizations mandate that financial reports adhere to GAAP standards?

Answer: • SEC

Question:* Which of the following is TRUE about Impairment of assets?

Answer: • Carrying amount > Recoverable amount

Question:* You declare a dividend. What happens on the cash flow statement and in which section?

Answer: • No change

Question:* Which of the following is a valid method to calculate impairment loss in case of a long lived asset?

Answer: • By taking off asset's fair value from it's carrying amount

Question:* Which of the following is a most conservative measure of liquidity?

Answer: • cash ratio

Question:* If the Exercise Price of a purchased put option is greater than Market Price, which of the following is TRUE?

Answer: • The effect of the purchased option is antidilutive

Question:* Unrealized gain and losses of ________ securities are reported in the Income Statement.

Answer: • Trading Securities

Question:* If the Exercise Price of a purchased call option is less than Market Price, then which of the following is TRUE?

Answer: • The effect of the purchased option is antidilutive

Question:* In a period of deflation, the cost flow method that results in the lowest income taxes is the:

Answer: • FIFO

Question:* Which of the following is the correct formula for calculating impairment losses on a loan?

Answer: • Carrying amount of a loan - Observable market price of a loan

Question:* All of the following are shown on the income statement net of tax EXCEPT:

Answer: • unusual or infrequent items.

Question:* At the beginning of 2001, Osami Corporation had 1.4 million shares of common stock outstanding and no preferred stock. At the end of August 2001, Osami issued 1.2 million new shares of common stock. If Osami reported net income equal to $7.2 million, what were its earnings per share (EPS) for 2001?

Answer: • $4

Question:* Which of the following is TRUE about impairment loss of a non-revalued asset?

Answer: • It is recognized in profit or loss

Question:* True or false? Private disclosure standards are governed by the SEC.

Answer: • False

Thursday, December 17, 2015

Generally Accepted Accounting Principles (GAAP) test answers of 2016.

Question:* An ordinary share dividend is:

Answer: • Part of the company profits used to reward the shareholders for their investment

Question:* Which of the following is the correct formula for calculating basic EPS as per US GAAP?

Answer: • income available for common stockholders / weighted-average number of common shares outstanding

Question:* Which of the following statements is true about the reporting of operating segments by a business?

Answer: • Publicly-held companies are required to present this information while other companies are allowed to present it.

Question:* Your accounts payable increases from the prior year, what happens on the cash flow statement and in which section?

Answer: • Cash increases - Operating section

Question:* Your accounts payable drops from the prior year, what happens on the cash flow statement and in which section?

Answer: • Cash decreases - Operating section

Question:* Net Income is $150,000, dividends paid to preferred stock holder is $50,000 and weighted-avg number of common shares are 10,000. What is the basic EPS as per US GAAP?

Answer: • $10

Question:* Which of the following is an Operating Activity as per US GAAP classification?

Answer: • Cash paid to employees

Question:* Your accounts receivable drops from the prior year. What happens on the cash flow statement and in which section?

Answer: • Cash increases - Operating section

Question:* In which of the following are profits recognized in full when real estate is sold?

Answer: • Full accrual method

Question:* Which of the following is the formula for return on equity (ROE)?

Answer: • Net Income / Equity

Question:* A client pays ABC Co. $10,000 in December to perform services in 45 days. ABC uses the accrual basis of accounting. In December ABC will debit Cash for $10,000. What will be the other account to balance this entry prepared by ABC?

Answer: • Unearned Revenue

Question:* Which of the following is NOT a valid cost flow assumption for determining the inventory cost?

Answer: • FILO

Question:* Which of the following is an Investing Activity as per US GAAP classification?

Answer: • Sales proceed from fixed assets

Question:* In which of the following accounting methods is profit not recognized until cash payments are greater than the cost of property?

Answer: • Cost recovery method

Question:* Which of the following securities are purchased with the intent of holding them until maturity?

Answer: • Held-to-maturity

Question:* Which of the following is NOT a current asset?

Answer: • Intangible assets

Question:* Which of the following best describes Going Concern?

Answer: • The assumption that a company will operate indefinitely

Question:* Which of the following correctly formulates current ratio?

Answer: • Current Asset / Current Liabilities

Question:* Which of the following is a US GAAP depreciation method for financial and tax reporting?

Answer: • (All of these)

Question:* Under GAAP principles, expenses have to be matched with revenues (as long as it's reasonable to do so). This is an example of which principle?

Answer: • The Matching Principle

Question:* GAAP generally uses one of two measurement principles. Which of the following IS one of these two principles?

Answer: • Fair value principal

Question:* The multiple-step income statement for a merchandiser shows each of the following features EXCEPT:

Answer: • investing activities

Question:* Which of the following methods of presenting cash flow is permitted under US GAAP?

Answer: • Both Direct & Indirect

Question:* What does CPA stand for?

Answer: • Certified Public Accountant

Question:* You pay a dividend, what happens on the cash flow statement and in which section?

Answer: • Cash decreases - Financing section

Question:* Which of the following consists of cash inflows and outflows from transactions that affect a firm's net income?

Answer: • Cash flow from operating activities (CFO)

Question:* Publicly traded companies employ _____ to audit the financial statements for their inclusion in reports to the shareholders.

Answer: • CPAs

Question:* Account receivables are classified as which of the following?

Answer: • Assets

Question:* In which of the following inventory valuation methods is the oldest cost of goods sold (COGS) entry processed first?

Answer: • FIFO

Question:* When applying the full accrual method in retail land sales, which of the following conditions are required by GAAP?

Answer: • (All of these)

Question:* True or false? GAAP is internationally based, whereas IFRS is US-centric.

Answer: • False

Question:* Which of the following securities are purchased with the intent to profit over near term?

Answer: • Trading Securities

Question:* Which of the following is prohibited in US GAAP?

Answer: • Reversal of impairment loss

Question:* All of the following are recognized depreciation methods for GAAP reporting EXCEPT:

Answer: • Modified Accelerated Cost Recovery

Question:* Which organization is most like IASB, but monitors and improves the standards under US GAAP?

Answer: • FASB

Question:* Your accounts receivable increases from the prior year, what happens on the cash flow statement and in which section?

Answer: • Cash decreases - Operating section

Question:* A financial record that uses a highly volatile currency would violate which of the following principles?

Answer: • The monetary unit principle

Question:* Choose the correct statement about GAAP.

Answer: • It is a violation of SEC regulations for publicly traded companies to depart from GAAP.

Question:* ABC company purchases a plot of land for $10,000. In the following year the value of the land increases by 10%. What value should this asset be recorded as?

Answer: • $10,000