ACCT 323 Final

B) using inaccurate data

"Garbage in, garbage out" refers to _____. A) a model that predicts people's behavior B) using inaccurate data C) creating a model that is not transparent D) relying solely on a data analytics model to predict

C) Prospective-effect type.

A change in depreciation method used is which type of accounting change? A) Cumulative-effect type. B) Counterbalancing-effect type. C) Prospective-effect type. D) Retrospective-effect type.

D) all of these answer choices are correct

A requirement for a security to be classified as held-to-maturity is A) ability to hold the security to maturity B) positive intent C) the security must be a debt security D) all of these answer choices are correct

D) all of these answer choices are correct

Debt securities may be classified as: A) held-to-maturity. B) trading. C) available-for-sale. D) all of these answer choices are correct.

A) Fair value

Debt securities that are bought and held primarily for sale in the near term are reported at: A) fair value. B) cost. C) net realizable value. D) amortized cost.

A) increase in a deferred tax liability.

Deferred tax expense is the: A) increase in a deferred tax liability. B) amount of income taxes payable for the period. C) increase in a deferred tax asset. D) decrease in a deferred tax liability.

$486,000

Sherman Company enters into a contract with a customer to build a warehouse for $400,000, with a performance bonus of $100,000 that will be paid based on the timing of completion. The amount of the performance bonus decreases by 20% per week for every week beyond the agreed-upon completion date. The contract requirements are similar to contracts that Sherman has performed previously, and management believes that such experience is predictive for this contract. Management estimates that there is a 50% probability that the contract will be completed by the agreed-upon completion date, a 30% probability that it will be completed 1 week late, and a 20% probability that it will be completed 2 weeks late. What is the total transaction price for this revenue arrangement? $460,000 $480,000 $500,000 $486,000

Step 3 of New Revenue Recognition Principle

Determine the contract price

A) Unstructured

Email is an example of _____ data. A) Unstructured B) Structured C) Transactional D) Derived

A) Functions

Excel provides built-in _____ to make calculations and other mathematical computations easier. A) Functions B) Filters C) Formatting D) Paths

D) taxable income.

Income tax expense is determined based on all of the following except: A) pretax financial income. B) income for financial reporting purposes. C) income for book purposes. D) taxable income.

A) Taxable Income

Income tax payable is based (computed) on: A) taxable income. B) income for book purposes. C) income before taxes. D) pretax financial income.

D) all of these answers are correct.

Major reasons why a company may become involved in leasing to other companies is (are) A) interest revenue. B) high residual values. C) tax incentives. D) all of these answers are correct.

False When a difference is permanent there can be no subsequent consequences. Temporary differences, not permanent differences, result in deferred tax consequences.

Permanent differences result in deferred tax consequences. True False

Step 5 of New Revenue Recognition Principle

Recognize revenue when each performance obligation is satisfied

A) reduce deferred tax assets by a valuation allowance if necessary.

The last procedure (step) in the computation of deferred income taxes is to: A) reduce deferred tax assets by a valuation allowance if necessary. B) identify the types and amounts of existing temporary differences. C) measure deferred tax assets for each type of tax credit carry forward. D) measure the total deferred tax asset (liability) using the appropriate tax rate.

B) adopts an asset-liability approach for revenue recognition

The new standard, Revenue from Contracts with Customers A) adopts criteria that de-emphasize the importance of contracts with customers B) adopts an asset-liability approach for revenue recognition C) adopts a revenue-gain approach for revenue recognition D) adopts "earned and realized" criteria.

A) The process of putting standards, processes, and definitions about data in place

Which of the following best defines data governance? A) The process of putting standards, processes, and definitions about data in place B) Data security C) Using data effectively D) Data completeness

A) Data that displays one trend until it is broken into subgroups that show an opposite trend

Which of the following best describes Simpson's Paradox? A) Data that displays one trend until it is broken into subgroups that show an opposite trend B) Behavioral predictions that can be made by putting people into baskets, or categories C) Using proxy variables for variables that can't be measured D) Companies that use social media to exert influence over individual behavior

A) LDA

Which of the following classification techniques best determines a qualitative outcome based on a set of quantitative inputs? A) LDA B) Linear Regression C) Discriminatory Analysis D) Association Analysis

D) all of these

Which of the following could be an example of a damaging feedback loop? A) College rankings that are self-reinforcing B) Nuisance crimes that lead to increased police presence C) Insurance rates based on neighborhoods D) All of these

C) A company changes the companies included in combined financial statements.

Which of the following describes a change in reporting entity? A) A company acquires 10% of the outstanding stock of a supplier. B) A manufacturing company expands its market from regional to nationwide. C) A company changes the companies included in combined financial statements. D) A company divests itself of a European branch sales office.

C) Association Analysis

Which of the following descriptive mining methods might be used to discover unexpected or atypical associations? A) Linear Regression Association Analysis B) Discriminant Analysis C) Association Analysis D) LDA

D) Both of these

Which of the following is a means of earnings management? A) Revenue manipulation B)Expense manipulation C) Neither of these D) Both of these

C) Interest received on state and municipal obligations.

Which of the following is a permanent difference? A) Installment sales accounted for on an accrual basis. B) Product warranty liabilities. C) Interest received on state and municipal obligations. D) Deductible pension funding exceeding expense.

C) A change in inventory valuation from average cost to LIFO.

Which of the following is accounted for as a change in accounting principle? A) A change in the residual value of plant assets. B) A change from double-declining balance method to the straight-line method of calculating depreciation. C) A change in inventory valuation from average cost to LIFO. D) A change from the cash basis of accounting to the accrual basis of accounting.

D) All of these answer choices are correct.

Which of the following is an advantage of leasing? A) Protection against obsolescence. B) Leases often do not require any down payment. C) Lease agreements may contain less restrictive provisions than other debt agreements. D) All of these answer choices are correct.

A) Hadoop

Which of the following is an example of a data lake? A) Hadoop B) SQL C) Excel D) MapReduce

B) Visual.ly

Which of the following is an example of an online visualization tool? A) R B) Visual.ly C) Tableau D) Qlik

A) Correction of understated depreciation expense in a prior period.

Which of the following is not one of the three types of accounting changes? A) Correction of understated depreciation expense in a prior period. B) Change in the estimated useful life of an asset. C) Change from LIFO to FIFO. D) Change in reporting entity.

D) All of these.

Which of the following is true about a data lake? A) It is a non-relational database. B) It contains raw structured data. C) It contains raw unstructured data. D) All of these.

B) A1:D4

Which of the following represents a Cell Range? A) C4 B) A1:D4 C) A1:D:4 D) $A$4

A) Descriptive

Which of the following techniques allows retrieval of information that is present but buried in data? A) Descriptive B) Predictive C) Analytic D) Derivative

B) Linear Regression

Which of the following techniques could be used to help accountants look at line items in fraudulent financial statements and predict future, or expected, values? A) Market Basket Analysis B) Linear Regression C) Association Analysis D) LDA

B) Predictive

Which of the following techniques enables extrapolation of new information based on previous information? A) Descriptive B) Predictive C) Derivative D) Index Number

A) Developed

Which of the following types of analytics can provide insights for human decision-making among various courses of action? A) Developed B) Emergent C) Real-Time D) Motion Sensor

B) Emergent

Which of the following types of analytics occurs in real time? A)Developed B) Emergent C) Point of Sales D) Raw

A) Change in accounting estimate

Which type of accounting change is accounted for in current and future periods? A) Change in accounting estimate B) Change in accounting principle C) Correction of an error D) Change in reporting entity

Long-term construction contracts.

Which type of revenue or gain is generally recognized with the passage of time? Revenue from fees or services. Revenue from sales. Long-term construction contracts. Gain or loss from disposition

Implicit interest rate

the discount rate that, at commencement of the lease, causes the aggregate present value of the lease payments and unguaranteed residual value to be equal to the fair value of the leased asset

Incremental borrowing rate

the rate of interest the lessee would have to pay on a similar lease or the rate that, at commencement of the lease, the lessee would incur to borrow over a similar term the funds necessary to purchase the asset

D) All of these

Which of the following Excel functions can help clean data? A) CLEAN B) CONCATENATE C) FIXED D) All of these

C) future tax benefit

A deferred tax asset represents a A) future tax expense. B) future taxable amount. C) future tax benefit. D) future tax liability.

B) increase in taxes saved in future years as a result of deductible temporary differences

A deferred tax asset represents the: A) decrease in taxes saved in future years as a result of deductible temporary differences. B) increase in taxes saved in future years as a result of deductible temporary differences. C) increase in taxes payable in future years as a result of deductible temporary differences. D) decrease in taxes payable in previous years as a result of cumulative temporary differences.

C) increase in taxes payable in future years as a result of taxable temporary differences

A deferred tax liability represents the: A) decrease in taxes payable in future years as a result of taxable temporary differences. B) decrease in taxes saved in future years as a result of deductible temporary differences. C) increase in taxes payable in future years as a result of taxable temporary differences. D) increase in taxes saved in future years as a result of deductible temporary differences.

C) a deferred tax asset only

A deferred tax valuation allowance account is used to recognize a reduction in A) income tax expense. B) a deferred tax liability only. C) a deferred tax asset only. D) both a deferred tax asset and a deferred tax liability.

True

A switch from the cash basis of accounting to the accrual basis is a correction of an error. True False

D) 30%

According to Benford's Law, how often would you expect to see the number, "1", as the first digit in a naturally occurring data set? A) 10% B) 20% C) 25% D) 30%

Step 4 of New Revenue Recognition Principle

Allocate the transaction price to the separate performance obligations

C) the customer has no significant risks or rewards of ownership.

An indication that the customer has not taken control of the good or service is A) the customer has physical possession of the asset. B) the selling company has right to payment for the good or service. C) the customer has no significant risks or rewards of ownership. D) the selling company has transferred legal title to the asset.

A) fair value method

An ownership interest of 15% in another company's voting stock should be accounted for using the: A) fair value method. B) consolidation method. C) equity method. D) cost method.

C) Equity Method Should be used between 20% and 50%

An ownership interest of 30% of the common stock of another corporation should be accounted for using the: A) fair value method. B) consolidated method. C) equity method. D) cost method.

C) other comprehensive income and included in the equity section of the balance sheet

An unrealized holding gain on a company's available-for-sale securities should be reflected in the current financial statements as A) a note or parenthetical disclosure only B) a direct increase to retained earnings C) other comprehensive income and included in the equity section of the balance sheet D) a current gain resulting from holding securities.

C) allocated to the periods benefited by the employee's required service.

Compensation expense resulting from a compensatory stock option plan is generally A) recognized in the period of exercise. B) recognized in the period of the grant. C) allocated to the periods benefited by the employee's required service. D) allocated over the periods of the employee's service life to retirement.

C) Draws attention to an object

Contrasting colors in a visualization does what? A) Creates a meaningful visualization B) Groups objects C) Draws attention to an object D) Distorts your presentation

C) Common Stock

Convertible bonds are usually converted into: A) stock warrants. B) other bonds at a lower interest rate. C) common stock. D) preferred stock.

B) a fine resulting from violations of OSHA regulations.

Gulfport Corporation's taxable income differed from its accounting income computed for this past year. An item that would create a permanent difference in accounting and taxable incomes for Gulfport would be A) a balance in the Unearned Rent account at year-end. B) a fine resulting from violations of OSHA regulations. C) using accelerated depreciation for tax purposes and straight-line depreciation for book purposes. D) making installment sales during the year.

True

Holdings between 20% and 50% of another company's voting stock are accounted for using the equity method. True False

A) Association Analysis

How could you best identify a kickback scheme? A) Association Analysis B) Linear Regression C) LDA D) Beneish Model

Finance or Operating

How might leases be classified?

Step 1 of New Revenue Recognition Principle

Identify the contract with a customer

Step 2 of New Revenue Recognition Principle

Identify the separate performance obligations in the contract

A) 1,800,000

In 2016, Chartres Inc., issued for $105 per share, 60,000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Chartre's $25 par value common stock at the option of the preferred stockholder. In April 2017, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock? $1,800,000. $900,000. $60,000. $2,300,000.

B) 1,500,000

In 2016, Newton Inc. issued for $105 per share, 100,000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Newton's $30 par value common stock at the option of the preferred stockholder. In August 2017, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital, common stock as a result of the conversion of the preferred stock into common stock? $1,250,000. $1,500,000. $375,000. $780,000.

C) as a prior period adjustment.

In 2016, PWT Company failed to record depreciation expense on some of its assets. When the error is discovered in 2017, it will be accounted for: A) using pro forma data. B) all of these answer choices are correct. C) as a prior period adjustment. D) prospectively.

A) variable consideration, non-cash consideration, time value of money, and consideration payable.

In determining the transaction price, the company must consider: A) variable consideration, non-cash consideration, time value of money, and consideration payable. B) variable consideration, but not non-cash consideration. C) non-cash consideration, but not the time value of money. D) the time value of money, but not consideration payable.

A) pretax financial income.

In the financial reporting according to GAAP income tax expense is based on: A) pretax financial income. B) income from continuing operations. C) taxable income. D) operating income.

A) predicting people's behavior, goals, and opinions

Negative consequences of big data are most often seen when _____. A) predicting people's behavior, goals, and opinions B) predicting tangible outputs C) creating a model that learns D) the model uses only publicly available data

True

Nondetachable warrants do not require an allocation of the proceeds between the bonds and the warrants. True False

A) a credit to the Allowance to Reduce Deferred Tax Asset to Expected Realizable Value of $240,000.

On December 31, 2017, Winston Inc. has determined that it is more likely than not that $240,000 of a $600,000 deferred tax asset will not be realized. The journal entry to record this reduction in asset value will include A) a credit to the Allowance to Reduce Deferred Tax Asset to Expected Realizable Value of $240,000. B) debit to Income Tax Payable of $240,000. C) credit to Income Tax Expense for $360,000. D) debit to Income Tax Expense for $360,000.

C) a $525,000 increase in paid-in capital in excess of par.

On June 30, 2017, an interest payment date, $1,000,000 of Greenville Co. bonds were converted into 25,000 shares of Greenville Co. common stock each having a par value of $5 and a market value of $54. There is $350,000 unamortized discount on the bonds. Using the book value method, Greenville would record A) a $350,000 increase in paid-in capital in excess of par. B) a $135,000 increase in paid-in capital in excess of par. C) a $525,000 increase in paid-in capital in excess of par. D) no change in paid-in capital in excess of par.

C) Unrealized gain of $17,500

On its December 31, 2017, balance sheet, Estes Co. reported its investment in trading securities, which had cost $500,000, at fair value of $475,000. At December 31, 2018, the fair value of the securities was $492,500. What should Estes report on its 2018 income statement as a result of the increase in fair value of the investments in 2018? A) $0 B) Unrealized loss of $7,500 C) Unrealized gain of $17,500 D) Realized gain of $17,500.

C) each party can unilaterally terminate the contract without compensation

One criteria that indicates that a company should disregard revenue guidance for contracts is when A) each party's rights regarding the goods or services to be transferred can be identified B) the payment terms for the goods and services to be transferred can be identified C) each party can unilaterally terminate the contract without compensation D) the contract has commercial substance.

C) on the retained earnings statement as an adjustment to the beginning balance of the earliest year presented.

The cumulative effect of a change in accounting principle is reported: A) on the income statement as an extraordinary item. B) on the income statement as part of discontinued operations. C) on the retained earnings statement as an adjustment to the beginning balance of the earliest year presented. D) on the retained earnings statement as an adjustment to the beginning balance of the current year.

True

The recording of convertible bonds at the date of issue is the same as the recording of straight debt issues. True False

C) each performance obligation is satisfied

The seller of a good or service should recognize revenue when A) they determine the transaction price B) they identify the contract with customers. C) each performance obligation is satisfied D) they identify the separate performance obligations in the contract.

D) part of net income

The unrealized holding gain or loss on trading securities is reported as: A) other comprehensive income. B) a separate component of stockholders' equity. C) an addition to (deduction from) the trading securities account balance. D) part of net income.

C) AutoFill

This feature of Excel allows you to copy formulas into adjacent cells. A) AutoPopulate B) Copy C) AutoFill D) CopyDown

B) trading

Unrealized holding gains or losses which are recognized in income are from debt securities classified as A) available-for-sale. B) trading. C) none of these answer choices are correct. D) held-to-maturity

C) Product warranty liabilities.

Which of the following are temporary differences that are normally classified as expenses or losses and are deductible after they are recognized in financial income? A) Fines and expenses resulting from a violation of law. B) Depreciable property. C) Product warranty liabilities. D) Advance rental receipts.

B) 3 months

Trading securities are generally held for less than: A) 12 months. B) 3 months. C) 6 months. D) 3 weeks.

A) records its proportionate share as an increase in its investment account

Under the equity method, if an investee company generates net income, the investor company: A) records its proportionate share as an increase in its investment account. B) does not recognize any share of the net income. C) records its proportionate share as an unrealized gain. D) records its proportionate share of the net income as dividend income.

B) declines in the fair value of the investment

Under the equity method, the investment account is decreased by all of the following except the investor's proportionate share of: A) dividends paid by the investee. B) declines in the fair value of the investment. C) the losses of the investee. D) all of these answer choices are correct.

False

Unrealized gains and losses on held-to-maturity securities are reported on the income statement. True False

B) available-for-sale securities

Unrealized holding gains or losses are recognized as other comprehensive income for: A) long-term securities. B) available-for-sale securities. C) held-to-maturity securities. D) trading securities.

B) COUNTIF

What Excel function is needed to apply Benford's Law? A) VLOOKUP B) COUNTIF C) LOOKUP D) SEARCH

A) Retrospective.

What approach does the FASB require when accounting for changes in accounting principle? A) Retrospective. B) Cumulative. C) Prospective. D) Allowance.

B) The model does not learn from its previous decisions.

What could be a problem with an employment model that uses testing to predict applicant success? A) The model allows employers the ability to discard several candidates upfront. B) The model does not learn from its previous decisions. C) The model could be based on currently effective employees. D) Employers might only rely on a predictive model to make decisions

Transfer of Ownership test Purchase Option test Lease Term test Present Value test Alternative use test

What determines how leases are classified? List the five tests

A) They have greater flexibility.

What is a benefit of the programmatic visualization tools? A) They have greater flexibility. B) They are simpler to use. C) They are easily integrated with online data sources. D) All of these.

B) Bar graphs

What is a recommended way to visualize categorical data? A) Time series B) Bar graphs C) Plot points D) Pie charts

C) Information a company already collects but doesn't use

What is dark data? A) Damaged data Information a company already collects but doesn't use B) Data that is difficult to find C) Information a company already collects but doesn't use D) Unsubstantiated data

A) A tool that assesses the probability of risk of statement manipulation

What is the Beneish Model? A) A tool that assesses the probability of risk of statement manipulation B) A tool that allows you to run an analysis on a set of numbers to determine if they follow a predicted pattern C) A regression analysis that estimates what earnings would be without any manipulations D) A model that identifies outliers in a dataset

B) Items embedded with sensors that exchange data through a network

What is the Internet of Things (IoT)? A) Global networks Items embedded with sensors that exchange data through a network B) Items embedded with sensors that exchange data through a network C) Peripheral network equipment D) String theory of connection

A) To make the variables proportional to one another

What is the goal of data normalization? A) To make the variables proportional to one another B) To convert continuous data into a small number of finite values C) To detect variable interactions D) To ensure systematic sampling

D) Strive for simplicity

What is the most important rule when choosing a font for your visualization? A) Use serif fonts for numbers B) Consistently use the same font size C) Make the fonts interesting D) Strive for simplicity

B) Expense

When a bond issuer offers some form of additional consideration (a "sweetener") to induce conversion, the sweetener is accounted for as a(n): extraordinary item. expense. loss. none of these answer choices is correct.

B) either a gain or a loss on retirement is recognized.

When convertible debt is retired: A) only gains on retirement are recognized. B) either a gain or a loss on retirement is recognized. C) only losses on retirement are recognized. D) neither gains nor losses are recognized.

B) change in estimate.

Whenever it is impossible to determine whether a change in principle or a change in estimate has occurred, the change should be considered a: A) correction of an error. B) change in estimate. C) change in accounting principle. D) counterbalancing error.

B) residual value

Which method of measuring the fair value of a performance obligation is dependent on the standalone selling prices of other goods or services promised in the contract? A) expected cost plus a margin. B) residual value. C) adjusted market assessment. D) standalone selling price.