Graduate Accounting Comprehensive Assessment PDF

Summary

This is a graduate-level accounting past paper. The paper contains questions and answers on topics including business combinations, auditing standards, tax deductions, and more. It covers calculation-based questions and requires detailed explanations of accounting concepts.

Full Transcript

**Exam Name:** Graduate Accounting Comprehensive Assessment **Exam Date:** [Random Date] **Exam Time:** 3 Hours **Total Score:** 100 Points --- **Instructions:** - Please answer all questions on the...

**Exam Name:** Graduate Accounting Comprehensive Assessment **Exam Date:** [Random Date] **Exam Time:** 3 Hours **Total Score:** 100 Points --- **Instructions:** - Please answer all questions on the test paper. - Show all your calculations for calculation questions. - For multiple-choice questions, clearly mark your answer. - Partial credit will be given for partial correct solutions. --- 1. A business combination occurs when one company acquires more than 50% of the voting equity in another company. True or False? **Answer:** True --- 2. Which of the following is not a generally accepted auditing standard? A) Standard of Field Work B) Standard of Reporting C) Standard of Planning and Supervision D) Standard of Professional Conduct **Answer:** D) Standard of Professional Conduct --- 3. What is the difference between a tax deduction and a tax credit? **Answer:** A tax deduction reduces taxable income, while a tax credit directly reduces the amount of tax owed. --- 4. Calculate the total product and average product from the following table where labor is the variable input: | Labor (L) | Output (Q) | This study source was downloaded by 100000895423731 from CourseHero.com on 01-22-2025 22:42:30 GMT -06:00 https://www.coursehero.com/file/245538934/TEST-cy6W-fz4U6chAdocx/ |-----------|-------------| |1 | 100 | |2 | 190 | |3 | 270 | |4 | 340 | |5 | 400 | **Answer:** [Calculation] --- 5. What is the primary goal of managerial accounting? **Answer:** The primary goal of managerial accounting is to provide information to assist managers in making operational and strategic decisions. --- 6. What are the two main types of international accounting standards? **Answer:** The two main types of international accounting standards are the International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP). --- 7. In forensic accounting, what is meant by "forensic"? **Answer:** "Forensic" in forensic accounting refers to the use of accounting techniques and knowledge in legal disputes, often to investigate fraud or financial discrepancies. --- 8. Describe the purpose of an accounting information system. **Answer:** The purpose of an accounting information system is to collect, store, and process financial and accounting data to generate reports and assist in making informed business decisions. --- 9. What are the main components of a financial statement analysis? **Answer:** The main components of a financial statement analysis include the balance sheet, income statement, and cash flow statement. --- This study source was downloaded by 100000895423731 from CourseHero.com on 01-22-2025 22:42:30 GMT -06:00 https://www.coursehero.com/file/245538934/TEST-cy6W-fz4U6chAdocx/ 10. Explain the difference between government and nonprofit accounting compared to for- profit accounting. **Answer:** Government and nonprofit accounting differ from for-profit accounting in that they focus on accountability to stakeholders rather than profitability, and they often have to adhere to specific regulations and reporting requirements that for-profit organizations do not. --- 11. In cost accounting, what is the difference between variable costs and fixed costs? **Answer:** Variable costs vary with the level of production or sales, while fixed costs remain constant regardless of the level of production or sales. --- 12. Calculate the weighted average cost of capital (WACC) for a company given the following information: - Debt: 40% of capital structure, cost of debt = 6% - Equity: 60% of capital structure, cost of equity = 12% - Tax rate = 30% **Answer:** [Calculation] --- 13. Why are consolidated financial statements necessary for a parent company with multiple subsidiaries? **Answer:** Consolidated financial statements are necessary to provide a complete and accurate picture of the financial performance and position of the entire group of companies as a single economic entity. --- 14. What is the primary objective of the Sarbanes-Oxley Act (SOX)? **Answer:** The primary objective of the Sarbanes-Oxley Act is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. --- This study source was downloaded by 100000895423731 from CourseHero.com on 01-22-2025 22:42:30 GMT -06:00 https://www.coursehero.com/file/245538934/TEST-cy6W-fz4U6chAdocx/ 15. Explain the concept of a contingent liability. **Answer:** A contingent liability is a potential obligation that depends on uncertain future events. It is not yet a liability but may become one. --- 16. Define "materiality" in the context of financial reporting. **Answer:** Materiality refers to the concept that information is important enough to influence the economic decisions of users of financial statements. --- 17. Calculate the direct labor variance from the following information: - Standard labor hours: 10,000 - Standard labor rate: $20/hour - Actual labor hours: 11,000 - Actual labor rate: $19/hour **Answer:** [Calculation] --- 18. What are the key elements of internal control? **Answer:** The key elements of internal control include the control environment, risk assessment, control activities, information and communication, and monitoring. --- 19. Calculate the gross margin ratio for a company with sales of $1,000,000 and cost of goods sold of $700,000. **Answer:** [Calculation] --- 20. Define "transfer pricing" in the context of international accounting. **Answer:** Transfer pricing refers to the pricing of goods, services, or intangible property transferred between related entities within the same multinational group. --- 21. What is the purpose of a cash flow statement? **Answer:** The purpose of a cash flow statement is to provide information about a This study source was downloaded by 100000895423731 from CourseHero.com on 01-22-2025 22:42:30 GMT -06:00 https://www.coursehero.com/file/245538934/TEST-cy6W-fz4U6chAdocx/ company's cash receipts and cash payments during a period. --- 22. Calculate the net present value (NPV) of a project with the following cash flows and a discount rate of 10%: - Initial investment: -$50,000 - Cash flows for years 1-5: $15,000 each year **Answer:** [Calculation] --- 23. Explain the concept of "substance over form" in accounting. **Answer:** Substance over form is the principle that accounting transactions should be recorded based on their economic substance rather than their legal form. --- 24. What is the difference between a capital expenditure and a revenue expenditure? **Answer:** A capital expenditure is an investment in long-term assets that will provide benefits over multiple periods, while a revenue expenditure is an expense that provides benefits within the current period. --- 25. Calculate the return on assets (ROA) ratio for a company with net income of $200,000 and total assets of $1,000,000. **Answer:** [Calculation] --- 26. Define "accounting conservatism." **Answer:** Accounting conservatism is the principle that anticipates losses and expenses and defers gains and revenues until they are realized. --- 27. What is the purpose of the statement of cash flows? **Answer:** The purpose of the statement of cash flows is to provide information about a company's cash receipts and cash payments during a period. This study source was downloaded by 100000895423731 from CourseHero.com on 01-22-2025 22:42:30 GMT -06:00 https://www.coursehero.com/file/245538934/TEST-cy6W-fz4U6chAdocx/ --- 28. Calculate the direct labor variance from the following information: - Standard labor hours: 10,000 - Standard labor rate: $20/hour - Actual labor hours: 11,000 - Actual labor rate: $19/hour **Answer:** [Calculation] --- 29. Define "accounting conservatism." **Answer:** Accounting conservatism is the principle that anticipates losses and expenses and defers gains and revenues until they are realized. --- 30. What is the purpose of a cash flow statement? **Answer:** The purpose of a cash flow statement is to provide information about a company's cash receipts and cash payments during a period. --- 31. Calculate the net present value (NPV) of a project with the following cash flows and a discount rate of 10%: - Initial investment: -$50,000 - Cash flows for years 1-5: $15,000 each year **Answer:** [Calculation] --- 32. Explain the concept of "substance over form" in accounting. **Answer:** Substance over form is the principle that accounting transactions should be recorded based on their economic substance rather than their legal form. --- 33. Calculate the return on assets (ROA) ratio for a company with net income of $200,000 and total assets of $1,000,000. This study source was downloaded by 100000895423731 from CourseHero.com on 01-22-2025 22:42:30 GMT -06:00 https://www.coursehero.com/file/245538934/TEST-cy6W-fz4U6chAdocx/ **Answer:** [Calculation] --- 34. Define "materiality" in the context of financial reporting. **Answer:** Materiality refers to the concept that information is important enough to influence the economic decisions of users of financial statements. --- 35. What is the primary objective of the Sarbanes-Oxley Act (SOX)? **Answer:** The primary objective of the Sarbanes-Oxley Act is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. --- This study source was downloaded by 100000895423731 from CourseHero.com on 01-22-2025 22:42:30 GMT -06:00 https://www.coursehero.com/file/245538934/TEST-cy6W-fz4U6chAdocx/ Powered by TCPDF (www.tcpdf.org)

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