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Long Term Assets and Security Stocks

Long-term assets are defined as

a. assets that are expected to benefit the organization for more than one year or one operating cycle.

b. assets that either are cash or are expected to become cash within one year or one operating cycle.

c. securities such as stock and bonds that are held for more than one year or one operating cycle.

d. special funds set aside to pay for pension obligations, plant expansion, or repay debt.

Liquidity plays an important part in a classified balance sheet. Liquidity refers to

a. whether an asset is tangible or intangible.

b. the size of a liability.

c. nearness to cash.

d. whether an asset is current or long-term.

The financial statement which uses "long term" or "short term" as the basis for classification of the elements reported on it is the

a. statement of retained earnings.

b. classified balance sheet.

c. single-step income statement.

d. multi-step income statement.

Determining the amount of income tax to be paid on income from ongoing activities is complex. Generally speaking, accountants must

a. determine the revenue that is taxable according to income tax regulations.

b. determine the costs that IRS allows to be deducted from taxable revenue to arrive at taxable income.

c. subtract the deductible costs from taxable revenue to determine taxable income.

d. All of these answers are correct.

Accounting rules define an extraordinary item as an event that is

a. unusual in nature.

b. infrequent in occurrence.

c. both unusual in nature or infrequent in occurrence.

d. neither unusual in nature nor infrequent in occurrence.

Solution Preview

1.
a. assets that are expected to benefit the organization for more than one year or one operating cycle.

assets become long term is they last longer than one ...

Solution Summary

The solution explains some multiple choice questions in accounting

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