QUESTION: 113

Many cost items fall into a " ", in which the decision to expense or to capitalize the expenditures is subjective. One such decision is the dividing line between maintenance expenditures, which are expenses and capital improvements, which are capitalized.

White area
Gary area
Red area
White and gray area

Answer(s): B

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QUESTION: 114

An item that frequently causes controversy in a business valuation is the value of a:

Net operating loss carryforward
Accounting of leases
Installment sales
Contract work

Answer(s): A

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QUESTION: 115

Since the use of the extraordinary designation is so restrictive, obviously many items do not meet the strict definition for accounting purposes but nevertheless should be regarded as nonrecurring for analytical purposes. Some examples of such items would be all of the following EXCEPT:

Gains or losses on the sale of assets
Gains or losses on disposition of a segment of the business
Write-offs and other expenses related to an acquisition
Effects of normal price fluctuations

Answer(s): D

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QUESTION: 116

Let's say that a company had 100, 000 shares outstanding at the beginning of the year and issued 30, 000 more shares on May 1. The 100, 000 shares would be outstanding for four months and the 130, 000 shares for eight months, or two-thirds of the year. The weighted average number of shares outstanding for the year would be:

100, 000
120, 000
140, 000
180, 000

Answer(s): B

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QUESTION: 113

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