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admitted negligence of the Railroad, hay on the farm was set on fire and burned. Ward had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Ward in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Ward appears inclined to accept the Railroad ' s offer. The Railroad ' s 2007 financial statements should include the following related to the incident: 51) Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles? 52) If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be 53) An example of an item which is NOT a liability is 54) The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the 55) Which of the following is a correct statement of one of the capitalization criteria? 56) Which of the following best describes current practice in accounting for leases? 57) While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases to be sales or purchases. The principal reason that supports this idea is that 58) The amount to be recorded as the cost of an asset under capital lease is equal to the 59) In the earlier years of a lease, from the lessee ' s perspective, the use of the 60) If the residual value of a leased asset is guaranteed by a third party ================================================= ACC 422 Final Exam Guide All 3 Sets
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admitted negligence of the Railroad, hay on the farm was set on fire and burned. Ward had had a dispute with the Railroad for several years concerning the ownership of a small parcel of land. The representative of the Railroad has offered to assign any rights which the Railroad may have in the land to Ward in exchange for a release of his right to reimbursement for the loss he has sustained from the fire. Ward appears inclined to accept the Railroad ' s offer. The Railroad ' s 2007 financial statements should include the following related to the incident: 51) Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles? 52) If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be 53) An example of an item which is NOT a liability is 54) The covenants and other terms of the agreement between the issuer of bonds and the lender are set forth in the 55) Which of the following is a correct statement of one of the capitalization criteria? 56) Which of the following best describes current practice in accounting for leases? 57) While only certain leases are currently accounted for as a sale or purchase, there is theoretic justification for considering all leases to be sales or purchases. The principal reason that supports this idea is that 58) The amount to be recorded as the cost of an asset under capital lease is equal to the 59) In the earlier years of a lease, from the lessee ' s perspective, the use of the 60) If the residual value of a leased asset is guaranteed by a third party ================================================= ACC 422 Final Exam Guide All 3 Sets