Advanced Accounting Analysis: Key Concepts and Practice Questions
School
Liberty University**We aren't endorsed by this school
Course
ACCT 1
Subject
Accounting
Date
Dec 11, 2024
Pages
2
Uploaded by KidIronWren46
Test Paper Name: Advanced Accounting AnalysisExam Time: 3 hoursTotal Score: 100Instructions:1. Please answer all questions on the test paper.2. Show all your work for calculation questions.3. Provide clear and concise explanations for open-ended questions.4. Use appropriate accounting principles and concepts in your answers.Multiple Choice Questions (20% - 30%)1. Which of the following is NOT a characteristic of International Financial Reporting Standards (IFRS)?a) Principle-based approachb) Focus on fair value measurementc) Harmonization of accounting practices globallyd) Country-specific requirements2. Which of the following is a key step in the auditing process?a) Planning and risk assessmentb) Sample selectionc) Final reviewd) Internal control evaluation3. Which of the following is NOT a primary objective of financial statement analysis?a) Assessing the organization's financial healthb) Evaluating the company's performancec) Making investment decisionsd) Determining the company's tax liabilityOpen-Ended Questions (30% - 40%)4. Explain the purpose of consolidated financial statements and discuss the key componentsinvolved in the preparation process.5. Discuss the differences between tax avoidance and tax evasion. Provide examples of each and explain their ethical implications.6. Analyze the role of cost accounting in decision-making and strategic planning within an organization. Provide examples of how cost accounting information can be used to improve
business performance.Calculation Questions (30% - 50%)7. Calculate the consolidated net income of Company XYZ for the current year, given the following information:- Company XYZ's net income: $500,000- Company ABC's net income: $300,000- Company XYZ owns 80% of Company ABC.8. Prepare a cost-volume-profit (CVP) analysis for Company XYZ, given the following information:- Selling price per unit: $10- Variable cost per unit: $6- Fixed costs: $20,000- Target profit: $10,0009. Analyze the financial statements of Company XYZ to assess its liquidity, solvency, and profitability. Provide recommendations based on your analysis.10. Calculate the effective tax rate for an individual with the following income and deductions:- Gross income: $100,000- Itemized deductions: $10,000- Taxable income: $90,000- Tax brackets and rates: [Provide relevant tax bracket and rates information]Note: The answers to the calculation questions should be supported with appropriate calculations and explanations.