56、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
When an issue is going to be put to a vote, by shareholders, at an annual general meeting the company prepares a(n):

Select exactly 1 answer(s) from the following:

A. annual report.

B. interim report.

C. proxy statement.

D. management statement of responsibility.

57、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
Which of the following is least likely to be classified as a financial statement element?

Select exactly 1 answer(s) from the following:

A. Asset

B. Revenue

C. Liability

D. Net income

58、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
Bishop Ltd. received an advanced payment of $10,000 on December 1, for rent on a property for December and January. On receipt they correctly recorded it as cash and unearned revenue. If at December 31, their year-end, they failed to make an adjusting entry related to this payment, ignoring taxes, what would the effect on the financial statements for the year be?

 Select exactly 1 answer(s) from the following:

A. Assets are overstated by $5,000 and Liabilities are overstated by $5,000.

B. Liabilities are overstated by $5,000 and Net income is overstated by $5,000.

C. Assets are overstated by $5,000 and Owner's equity is overstated by $5,000.

D. Liabilities are overstated by $5,000 and Owners' equity is understated by $5,000.

59、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
An analyst gathered the following information from a company's accounting records:

The analyst's estimate of net income for 2007 would be closest to:

 Select exactly 1 answer(s) from the following:

 A. $650,000.

 B. $850,000.

 C. $1,050,000.

 D. $1,850,000.

60、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
A financial reporting system has two components: the establishing of the rules or standards, and the enforcing of the rules. The responsibility for those two components generally lies with which of the following bodies?

 Select exactly 1 answer(s) from the following:

 A. AnswerA.

 B. AnswerB.

 C. AnswerC.

 D. AnswerD.

答案和详解如下：

56 Correct answer is C

“Financial Statement Analysis: An Introduction,” Thomas R. Robinson, Hennie van Greuning, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, p. 25
Study Session 7-29-e
identify and explain information sources other than annual financial statements and supplementary information that analysts use in financial statement analysis
Proxy statements are prepared and distributed to shareholders on matters that are to be put to a vote at shareholder meetings.

57 Correct answer is D

“Financial Reporting Mechanics,” Thomas R. Robinson, Hennie van Greuning, Karen O’Connor Rubsam, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, pp. 37-39
Study Session 7-30-b
explain the relationship of financial statement elements and accounts, and classify accounts into the financial statement elements
Net income is not an element of the financial statements, but the net result of revenues less expenses. The elements are: assets, liabilities, owners’ equity, revenue and expenses.

58 Correct answer is D

“Financial Reporting Mechanics,” Thomas R. Robinson, Hennie van Greuning, Karen O’Connor Rubsam, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, p. 66
Study Session 7-30-e
explain the need for accruals and other adjustments in preparing financial statements
The company should have made an adjusting entry to reduce the Unearned revenue account (a liability) by $5,000 and increase Revenue (and hence net income and retained earnings) by $5,000. As the company failed to make the adjusting entry the liabilities are overstated and owners’ equity is understated.

59 Correct answer is C

“Financial Reporting Mechanics,” Thomas R. Robinson, Hennie van Greuning, Karen O’Connor Rubsam, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, pp. 40-42
Study Session 7-30-c, f
explain the accounting equation in its basic and expanded forms;
prepare financial statements, given account balances or other elements in the relevant accounting equation, and explain the relationships among the income statement, balance sheet, statement of cash flows, and statement of owners’ equity
Total assets = liabilities + owner’s equity.
Owner’s equity = $5,250,000 - 2,200,000 = 3,050,000.
Owners equity = contributed capital + ending retained earnings.
Ending retained earnings = 3,050,000 - 1,400,000 = 1,650,000.
Ending retained earnings = beginning retained earnings + net income - dividends.
1,650,000 = 800,000 + NI - 200,000. Net income = $1,050,000

60 Correct answer is B

“Financial Reporting Standards,” Thomas R. Robinson, Hennie van Greuning, Karen O’Connor Rubsam, Elaine Henry, and MichaelA. Broihahn
2008 Modular Level I, Vol. 3, pp. 100-101
Study Session 7-31-b
explain the role of standard-setting bodies, such as the International Accounting Standards Board and the U.S. Financial Accounting Standards Board, and regulatory authorities such as the International Organization of Securities Commissions, the U.K. Financial Services Authority, and the U. S. Securities and Exchange Commission in establishing and enforcing financial reporting standards
Standard-setting bodies such as FASB or IASB are responsible for making the rules and developing accounting standards, whereas regulatory authorities such as the SEC, FSA, or IOSCO have the legal authority to enforce the standards.

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