DeVry ACCT 312 Midterm Exam

DeVry ACCT 312 Midterm Exam

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1. Question : (TCO 1) Which creates a deferred tax liability?
Student Answer: An unrealized loss from recording inventory at lower cost than market.
Estimated warranty expense
Subscriptions collected in advance
Accelerated depreciation in the tax return

2. Question : (TCO 1) A deferred tax asset represents a
Student Answer: future cash collection.
future income tax benefit.
future tax refund.
future amount of money to be paid out.

3. Question : (TCO 2) The three components of pension expense that are present most often are
Student Answer: service cost, prior service cost, and gain on plan assets.
service cost, interest cost, and gain from revisions in pension liability.
service cost, contribution cost, and prior service cost.
service cost, interest cost, and expected return on plan assets.

4. Question : (TCO 2) Which of the following constitutes the accumulated benefit obligation?
Student Answer: Present value of vested benefits at present pay levels
Present value of nonvested benefits at present pay levels
Present value of additional benefits related to projected pay increases
Both A and B

5. Question : (TCO 3) Prior to 1993, postretirement benefits other than pensions generally were accounted for on the
Student Answer: accrual basis.
cash basis.
modified accrual basis.
hybrid basis.