CFA Level 1 － 模考试题(3)（AM）－Q61-65 reports, 考试题, style, class

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Question 61 

Consider an IFRS firm that reports its inventory under FIFO and a U.S. firm that reports its inventory under LIFO. In a deflationary environment, which of the following statements is most accurate regarding the equity and cost of goods sold accounts, respectively?

   Equity              Cost of Goods Sold 

A) Higher under LIFO    Higher under LIFO 

B) Higher under LIFO    Lower under LIFO 

C) Lower under LIFO    Lower under LIFO 

D) Lower under LIFO    Higher under LIFO  

 

Question 62 

In a period of rising prices and stable or increasing inventory quantities, use of the last in, first out (LIFO) inventory cost flow assumption is least likely to result in: 

A) higher cash flows than under first in, first out (FIFO).

B) lower net income than under first in, first out (FIFO).

C) lower working capital than under first in, first out (FIFO).

D) higher income taxes than under first in, first out (FIFO).

 

Question 63 

A firm uses the last in, first out (LIFO) accounting method and posts $100,000 as ending inventory. Last year's financial statements show inventory at $110,000. This period's income statement shows costs of goods sold at $90,000 with a LIFO reserve of $30,000. How much inventory was purchased this period, and what would the ending inventory balance be under first in, first out (FIFO)?

Inventory purchases    Ending inventory (FIFO)

A) $80,000                $70,000

B) $90,000                $70,000

C) $80,000                $130,000

D) $90,000                $130,000

 

Question 64 

A permanent difference in pretax and taxable income is least likely to result when: 

A) premiums are paid on life insurance of key employees.

B) the installment sales method is used.

C) proceeds are received from life insurance on key employees.

D) tax-exempt interest is received.

 

Question 65 

Which of the following statements about the presentation of cash receipts under the direct method and about the amounts of operating cash flow under the direct and indirect methods are most accurate? 

 Direct method presents:          Operating cash flow amount is: 

A) gross cash receipts and payments  higher under direct method 

B) gross cash receipts and payments  the same under both methods 

C) net cash receipts and payments    the same under both methods 

D) net cash receipts and payments    higher under direct method  

 

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答案和详解如下：

Question 61 

The correct answer was B) Higher under LIFO  Lower under LIFO  In a deflationary environment, a LIFO firm will report lower COGS since prices are falling and the most recent prices are used to calculate COGS. Lower COGS will result in higher profitability and higher equity (the latter in the form of higher retained earnings).  

This question tested from Session 10, Reading 43, LOS d

 

Question 62 

The correct answer was D) higher income taxes than under first in, first out (FIFO). 

LIFO, under rising prices, results in lower net income for both accounting and tax purposes, so income taxes are lower under LIFO than under FIFO. LIFO will also result in lower working capital (current assets – current liabilities) due to the lower value of inventory carried on the balance sheet. 

This question tested from Session 9, Reading 35, LOS c, (Part 2)

 

Question 63 

The correct answer was C) $80,000        $130,000

EI = BI + P - COGS

100 = 110 + P - 90

P = $80,000

In order to convert ending inventory under FIFO to LIFO you have to add the LIFO reserve to the ending inventory under LIFO. EI_FIFO = $100,000 + $30,000 = $130,000

This question tested from Session 9, Reading 35, LOS a

 

Question 64 

The correct answer was B) 

Premium payments on life insurance of key employees is an expense on the financial statements, but is not deducted on tax returns. Proceeds from life insurance and tax exempt interest are both non-taxable, but are recognized as revenue on the financial statements. These three items result in permanent differences between pretax income and taxable income. 

This question tested from Session 9, Reading 38, LOS e

 

Question 65 

The correct answer was B) gross cash receipts and payments  the same under both methods  

The primary advantage of the direct method is that it presents the firm’s gross operating cash receipts and payments; the indirect method only presents the net result of the receipts and payments. Total cash flow from operating activities is exactly the same under both methods; only the presentation differs. 

This question tested from Session 8, Reading 34, LOS d, (Part 1)

 

carriewood

多谢

[此贴子已经被作者于2008-11-10 12:19:38编辑过]

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