AccountingWEB.com

Test Your Knowledge!
Next Quiz on July 21st!

Fair Value

Accountants are lifelong students. The weekly quizzes are open
to everyone in the wonderful field of accounting, business
and the study of accounting. Good luck!

This week's quiz brought to you by:
Barbara W. Scofield, PhD, CPA - Associate Professor of Accounting
and Director of the Financial Accounting Concentration
University of Dallas
Irving, Texas

Visit Quiz Archives/See Past Winners

At the Crossroads: The Remarkable CPA Firm that Nearly Crashed, then Soared
by Gale Crosley, CPA

Joe Abriola has a problem—a big problem. Managing partner of a prosperous Minneapolis CPA firm, Joe has just learned that his partners are on the verge of mutiny. Why are they so upset? It's him!—or, rather, it's the way he's let their practice slide into complacency. Why are other CPA firms growing so fast when theirs isn't?

Purchase here>>

1 -

Fair value:

is the valuation measure used for fixed assets.
is the valuation measure used for trading securities.
is the valuation measure used for inventory
is the valuation measure used for intangible assets.

2 -

Fair value:

is required as the measure of value for derivatives.
is one option for valuing any derivative.
is required for some derivatives and prohibited for other derivatives.
is not used to value any derivatives.

3 -

Fair value:

is required for valuing all investments.
is one option for valuing any investment.
is required for some investments and prohibited for other investments.
is not used for any investments.

4 -

Fair value:

is used to value stock issued when convertible bonds are converted.
is used to value stock when issued in a bundle with warrants.
is used to value stock when issued at the time stock subscriptions are fully paid.
is used to value stock options issued as employee compensation.

5 -

Fair value:

is used as the valuation of a fixed asset when the asset is impaired.
is used as the valuation of a fixed asset when the asset is self-constructed.
is used to determine whether impairment of a fixed asset has occurred.
is used as the valuation of a fixed asset at the end of the period in determining depreciation.

6 -

Fair value:

can be selected as the valuation method for an investment at the time it is sold.
must be selected for all equity method investments if it is selected for one equity method investment.
can be selected as the valuation method when an investment is reclassified.
must be selected if the investment will be held to maturity.

7 -

Fair value of liabilities:

decreases as credit risk increases.
decreases as interest rates decrease.
decreases as inflation subsides.
decreases as collateral increases in value.

8 -

Fair value is measured:

as the present value of company-specific cash flows.
as the value in an arm's length transaction.
as the current replacement cost.
as the liquidation value in a bankruptcy.

9 -

Fair value is criticized:

for making financial statements less useful to investors interested in current value.
for introducing different measurement for assets and liabilities.
for adding volatility to Earnings Per Share.
for generating gains on assets when credit risk increases.

10 -

Fair value measurement:

affects only the balance sheet.
applies at the time of acquisition only.
impacts cash flow for investing.
requires an adjusting journal entry at the end of each period.

THIS INFORMATION WILL BE USED TO CONTACT WINNERS ONLY

Your Name

Your Firm/Company

Your Address, Suite/Apt #

Your City

Your State or Province

Your Postal Code (US ZIP code)

Your E-mail Address

May we publish your name and company if you win?
Yes
No

	is the valuation measure used for fixed assets.
	is the valuation measure used for trading securities.
	is the valuation measure used for inventory
	is the valuation measure used for intangible assets.

	is required as the measure of value for derivatives.
	is one option for valuing any derivative.
	is required for some derivatives and prohibited for other derivatives.
	is not used to value any derivatives.

	is required for valuing all investments.
	is one option for valuing any investment.
	is required for some investments and prohibited for other investments.
	is not used for any investments.

	is used to value stock issued when convertible bonds are converted.
	is used to value stock when issued in a bundle with warrants.
	is used to value stock when issued at the time stock subscriptions are fully paid.
	is used to value stock options issued as employee compensation.

	is used as the valuation of a fixed asset when the asset is impaired.
	is used as the valuation of a fixed asset when the asset is self-constructed.
	is used to determine whether impairment of a fixed asset has occurred.
	is used as the valuation of a fixed asset at the end of the period in determining depreciation.

	can be selected as the valuation method for an investment at the time it is sold.
	must be selected for all equity method investments if it is selected for one equity method investment.
	can be selected as the valuation method when an investment is reclassified.
	must be selected if the investment will be held to maturity.

	decreases as credit risk increases.
	decreases as interest rates decrease.
	decreases as inflation subsides.
	decreases as collateral increases in value.

	as the present value of company-specific cash flows.
	as the value in an arm's length transaction.
	as the current replacement cost.
	as the liquidation value in a bankruptcy.

	for making financial statements less useful to investors interested in current value.
	for introducing different measurement for assets and liabilities.
	for adding volatility to Earnings Per Share.
	for generating gains on assets when credit risk increases.

	affects only the balance sheet.
	applies at the time of acquisition only.
	impacts cash flow for investing.
	requires an adjusting journal entry at the end of each period.