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Topic: QUESTION OF THE DAY - MCQ’S ALL SECTIONS (

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Skooby
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Joined: 23 Mar 2010
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Posted: 25 Oct 2010 at 20:38 \| IP Logged

AndrewCPA
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Posted: 26 Oct 2010 at 14:07 \| IP Logged

Correct Answer: A

Explanation: The portion of the lease payment which will reduce the lease obligation in year 2 is shown as a current liability at the end of year 1. The payments reduce an increased amount of the liability each year.

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AndrewCPA
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Posted: 26 Oct 2010 at 17:45 \| IP Logged

Today's question: BEC

How should a usage variance that is significant in amount be treated at the end of an accounting period?

A) Reported as a deferred charge or credit.

B) Allocated among work-in-process inventory, finished goods inventory, and cost of goods sold.

C) Charged or credited to cost of goods manufactured.

D) Allocated among cost of goods manufactured, finished goods inventory, and cost of goods sold.

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Andrew Lee, CPA
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AndrewCPA
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Posted: 27 Oct 2010 at 13:32 \| IP Logged

Correct Answer: B

Explanation: This method provides for allocation among all units that were handled during the period.

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Andrew Lee, CPA
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AndrewCPA
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Posted: 27 Oct 2010 at 19:00 \| IP Logged

Today's question: AUD

For a large population of cash disbursement transactions, Smith, CPA, is testing compliance with internal control by using attribute sampling techniques. Anticipating an occurrence rate of 3% Smith found from a table that the required sample size is 400 with a desired upper precision limit of 5% and reliability of 95%. If Smith anticipated an occurrence rate of only 2% but wanted to maintain the same desired upper precision limit and reliability the sample size would be closest to:

A) 200

B) 400

C) 533

D) 800

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