Free CFA-Level-I Exam Braindumps (page: 502)

Page 502 of 991

Which of the following is/are true?

  1. Straight preferred equity holders to do not have a right to demand redemption.
    II. Dividend payments on preferred equity are cumulative.
    III. Dividends on common stock cannot be paid unless preferred dividends are paid.
    IV. Preferred dividends which are in arrears are a non-recorded liability.
  2. I & IV
  3. I, II, III & IV
  4. I, II & III
  5. II, III & IV

Answer(s): B

Explanation:

Preferred equity is usually not redeemable, implying that preferred equity holders do not have a right to demand from the company a retirement of their equity through redemption payment. Preferred dividends that are not paid when due remain a liability, though they are not recorded as such. This leads to an understatement of liabilities since someday, these dividends must definitely be paid. In particular, the dividends in arrears are cumulative and must be paid in full before any ordinary dividends can be paid to common stockholders.



The accumulated amount by which a plant asset has been depreciated over its useful life is classified as

  1. a liability
  2. an asset
  3. an expense
  4. revenue

Answer(s): B

Explanation:

Accumulated Depreciation reports the total amount of depreciation expense recognized in all prior periods since the asset(s) were put into service.



Under accrual accounting, which of the following is/are Incorrect?

  1. Revenues are recognized when cash is received.
    II. The reported income is a good indicator of the firm's current performance.
    III. Expenses do not always involve cash flows.
    IV. Revenues and the related costs are matched in the same period.
  2. I only
  3. II & III
  4. III only
  5. All of these answers are correct

Answer(s): A

Explanation:

Under accrual accounting, revenues are recognized when the earnings process behind the revenues is complete and expenses are recognized in the period the goods and services are used for generating income.
Therefore, revenues and expenses do not always involve actual cash flows, though revenues and costs that are related do get matched in the same period whenever such an identification is possible.



The Income Summary account is

  1. a permanent account
  2. an asset
  3. a temporary account
  4. a liability

Answer(s): C

Explanation:

The Income Summary account is a temporary account created especially for the closing process and is used only for flowing adjustments and closing entries through.



Page 502 of 991



Post your Comments and Discuss Test Prep CFA-Level-I exam with other Community members:

Anonymous commented on December 11, 2024
really good
INDIA
upvote

Anonymous commented on December 10, 2024
Good questions for revision
UNITED STATES
upvote

Milik commented on December 10, 2024
Very resourceful information
Anonymous
upvote

Milik commented on December 10, 2024
Great info Marion to succeed on your test……….
Anonymous
upvote

Ritesh commented on December 10, 2024
Good content
Anonymous
upvote

Mikil commented on December 10, 2024
I will tell others about this study site
Anonymous
upvote

Milik commented on December 10, 2024
Good resource for your studies. I will refer to my frirnds
Anonymous
upvote

Mikil commented on December 10, 2024
I will tell others about this site.
Anonymous
upvote

Mikil commented on December 10, 2024
I will tell others of this site
Anonymous
upvote

Mikil commented on December 10, 2024
Great research for my test
Anonymous
upvote

Mikil commented on December 10, 2024
Great resource. I would tell others
Anonymous
upvote

Mikil commented on December 10, 2024
Great resource
Anonymous
upvote

Michelle commented on December 10, 2024
Great resource
Anonymous
upvote

ArulMani commented on December 10, 2024
It's very useful study for EMT exam
UNITED STATES
upvote

no name commented on December 10, 2024
helpful to recap the course
Anonymous
upvote

none commented on December 10, 2024
very helpful to recall the course
Anonymous
upvote

Sandeep Singh commented on December 10, 2024
All questions are from real exam.
UNITED STATES
upvote

Usman commented on December 10, 2024
It is a great collection but I have noticed that some answers are wrong. For example, it says that correct answer is B but the description of that answer matches with answer A. So it is advisable to read the answer's description as well.
Anonymous
upvote

Anamika commented on December 10, 2024
dumps are good and helpful
UNITED STATES
upvote

santosh k sharma commented on December 10, 2024
A good way to practice
Anonymous
upvote

Faith Egwuenu commented on December 09, 2024
The case studies/questions were very helpful.
Anonymous
upvote

Jaydin commented on December 09, 2024
Think I will do well on test I'm brave confident I swear no hard feelings
UNITED STATES
upvote

Jaydin grimball commented on December 09, 2024
I doing well thinks
UNITED STATES
upvote

Calista Eva commented on December 09, 2024
Good practice
UNITED STATES
upvote

mamatha commented on December 09, 2024
informative
Anonymous
upvote

Mishti commented on December 08, 2024
Preparing for certification
CANADA
upvote

Jbomb commented on December 08, 2024
I'll take the test and report back
KOREA REPUBLIC OF
upvote

Vic commented on December 08, 2024
Interesting answers
CANADA
upvote

Cristina commented on December 08, 2024
good questions
ROMANIA
upvote

kanhaiya kumar commented on December 08, 2024
awsome stuff
Anonymous
upvote

WILLIAM RIBEIRO RODRIGUES commented on December 08, 2024
Amazing place to learning and share knowleg.
BRAZIL
upvote

WILLIAM RIBEIRO RODRIGUES commented on December 08, 2024
Nice place to practice and learning.
BRAZIL
upvote

frans Bauwer commented on December 08, 2024
so far so good
BELGIUM
upvote

Karthick commented on December 08, 2024
@The Magic Beans Please update us after your exam.
SINGAPORE
upvote