6. Sawyer Corporation purchased land in 2009 for $490,000. In 2015, it purchased a nearly identical parcel of land for $

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6. Sawyer Corporation purchased land in 2009 for $490,000. In 2015, it purchased a nearly identical parcel of land for $660,000. In its 2015 balance sheet, Sawyer valued these two parcels of land at a combined value of $1,320,000. By reporting the land in this manner, Sawyer Corporation has violated which of the following?
a.
Going concern assumption
b.
Cost principle
c.
Monetary unit measure
d.
Time Period assumption
7. The Securities and Exchange Commission (SEC) is concerned with
a.
companies that issue securities to the general public.
b.
all companies in the U.S. regardless of size.
c.
accounting reports issued by government entities.
d.
all domestic and international companies that issue accounting reports.
8. An accountant is uncertain about the best estimate of an amount for a business transaction. If two amounts are about equally likely, the amount least likely to overstate assets and income is selected. Which of the following qualities is characterized by this action?
a.
Comparability
b.
Conservatism
c.
Materiality
d.
Neutrality
9. For several years, Bosco Corporation has had a current ratio that was consistent with other companies in its industry. For the most recent year, Bosco’s current ratio was significantly higher than that for the industry. What is the best possible explanation for this situation?
a.
The other companies in the industry were not as profitable.
b.
Bosco’s liquidity has improved or is not leveraging financial resources effectively.
c.
Bosco has less property, plant, and equipment than other companies.
d.
Bosco has too much debt.
10. Which of the following would appear on a multiple-step income statement but not on a single-step income statement?
a.
Net income
b.
Total expenses
c.
Total revenues
d.
Income before income taxes