This quiz works best with JavaScript enabled. Home > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 10 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Mark Transportation Company exchanged a number of used trucks plus cash for a semi-truck. The used trucks have a combined book value of $ 40, 000 (cost $ 62, 000 less $ 22, 000 accumulated depreciation). Mark's purchasing agent, experienced in the second-hand market, indicates that the used trucks have a fair market value of $ 47, 000. In addition to the trucks, Interstate must pay $ 9, 000 cash for the semi-truck. What is the journal entry to record the exchange transaction? A) Dr. Semi-truck $ 47, 000Dr. Accumulated Depreciation-Trucks $ 22, 000Cr. Trucks (used) $ 62, 000Cr. Loss on disposal of used Trucks $ 7, 000. B) Dr. Semi-truck $ 56, 000Dr. Accumulated Depreciation-Trucks $ 22, 000Cr. Trucks (used) $ 62, 000Cr. Gain on disposal of used Trucks $ 7, 000Cr. Cash $ 9, 000. C) Dr. Semi-truck $ 47, 000Dr. Accumulated Depreciation-Trucks $ 22, 000Cr. Trucks (used) $ 62, 000Cr. Gain on disposal of used Trucks $ 7, 000. D) Dr. Semi-truck $ 56, 000Dr. Accumulated Depreciation-Trucks $ 22, 000Cr. Trucks (used) $ 62, 000Cr. Loss on disposal of used Trucks $ 7, 000Cr. Cash $ 9, 000. E) None of these. Show Answer Correct Answer: B) Dr. Semi-truck $ 56, 000Dr. Accumulated Depreciation-Trucks $ 22, 000Cr. Trucks (used) $ 62, 000Cr. Gain on disposal of used Trucks $ 7, 000Cr. Cash $ 9, 000. 2. General-purpose financial statements are the product of A) Financial accounting. B) Managerial accounting. C) Both financial and managerial accounting. D) Neither financial nor managerial accounting. Show Answer Correct Answer: A) Financial accounting. 3. The principal classification of liabilities are A) Current and non-current. B) Long-term and short-term. C) Interest and non-interest bearing. D) All the above. Show Answer Correct Answer: A) Current and non-current. 4. Securities that are in market demand in which the business invests with uncertain objectives What type of securities will they be classified as? A) Securities for trading. B) Securities available for sale. C) Debt instruments due within 1 year. D) General investments. Show Answer Correct Answer: D) General investments. 5. The following costs may all be included in the costs of acquiring fixed assets, except: A) Costs of site preparation. B) Costs of testing whether the assets is functioning properly. C) Installation and assembly costs. D) Administration and general overhead costs. Show Answer Correct Answer: D) Administration and general overhead costs. 6. An unclean opinion A) Unqualified. B) Unqualified with an explanation or emphasis paragraph. C) Qualified. D) Adverse or disclaimer. E) Rejected. Show Answer Correct Answer: C) Qualified. 7. Revenue is recognized by the consignor when the: A) Goods are shipped to the consignee. B) Consignee receives the goods. C) Consignor receives an advance from the consignee. D) Consignor receives an advance from the consignee. Show Answer Correct Answer: C) Consignor receives an advance from the consignee. 8. Amazon Inc. Giant Inc. acquires the customer list of a large newspaper for $ 8, 000, 000 on January 1, 2016. Giant Inc. expects to benefit from the information evenly over a four-year period. What is the journal entry to record the customer list? A) Dr. Cash $ 8, 000, 000Cr. Customer List $ 8, 000, 000. B) Dr. Customer List $ 8, 000, 000Cr. Account Payable $ 8, 000, 000. C) Dr. Customer List $ 2, 000, 000Cr. Cash $ 2, 000, 000. D) Dr. Customer List $ 2, 000, 000Cr. Account Payable $ 2, 000, 000. E) Dr. Customer List $ 8, 000, 000Cr. Cash $ 8, 000, 000. Show Answer Correct Answer: E) Dr. Customer List $ 8, 000, 000Cr. Cash $ 8, 000, 000. 9. The following figures relate to inventory held at theend of the reporting period:Cost of materials P100, 000Net realizable value of materials 90, 000Estimated costs to convert materialsinto finished goods 50, 000Estimated selling price of finished goods 160, 000Estimated costs to sell 5, 000 The entity should recognize loss on write-down ofinventory of materials of A) P15, 000. B) P10, 000. C) P5, 000. D) Nil. Show Answer Correct Answer: D) Nil. 10. PT Royal purchased a jet aircraft for use by the entity's top management. The acquisition price of the jet aircraft was IDR 1 billion. The jet aircraft is estimated to be used for 7 years, however there are main components of the jet aircraft which have different useful lives as follows:the engine has a useful life of 5 years and the aircraft tires will be replaced every 2 years. The jet aircraft will be depreciated using the straight line method over..... A) 7 years of benefit period. B) 2 years useful life for reasons of conservatism. C) 5 years useful life for the engine, 2 years useful life for tires, and 7 years for the remaining purchase price. D) 5 years of benefit time which is the average benefit time. Show Answer Correct Answer: D) 5 years of benefit time which is the average benefit time. 11. What is capitalized and then allocated as depreciation? A) Overhead Allocation. B) Interest Capitalization. C) Constructed Assets. D) Patent. Show Answer Correct Answer: B) Interest Capitalization. 12. Dividends not paid during a year do not accumulate to PS shareholders A) Cumulative PS. B) Noncumulative PS. C) Participating PS. D) Nonparticipating PS. Show Answer Correct Answer: B) Noncumulative PS. 13. What is the collection of depreciable assets that are physically dissimilar but are aggravated anyway to gain the convenience of a collective depreciation calculation? A) Group Depreciation Method. B) Composite Depreciation Method. Show Answer Correct Answer: B) Composite Depreciation Method. 14. Part of the process of preparing a cash flow statement is calculating cash flows from operating activities. Which of the following statements is incorrect regarding the use of the indirect method: A) 1, 2, 3. B) 1, 2, 4. C) 1, 3, 4. D) 2, 3, 4. Show Answer Correct Answer: D) 2, 3, 4. 15. Inventory is part of the asset classification. The incorrect definition is: A) Used in the production or supply of goods and services for administrative purposes. B) For sale in the normal course of business. C) In the production process for the sale. D) In the form of materials or equipment to be consumed in the production/service process. Show Answer Correct Answer: A) Used in the production or supply of goods and services for administrative purposes. 16. Purchase equipment in cash. The consequences of the transaction and its effect on the account..... A) Assets (equipment) decrease and assets (cash) increase. B) Assets (equipment) increase and Assets (cash) increase. C) Assets (equipment) increase and assets (cash) decrease. D) Assets (equipment) are reduced and assets (cash) are reduced. Show Answer Correct Answer: C) Assets (equipment) increase and assets (cash) decrease. 17. Resources controlled by an entity as a result of the past and which are expected to have economic benefits flowing to the entity in the future are called..... A) Debt. B) Equity. C) Asset. D) Income. Show Answer Correct Answer: C) Asset. 18. The element or elements related to the residual interest in the company's assets after deducting liabilities are..... A) Asset. B) Burden. C) Income. D) Equity. Show Answer Correct Answer: D) Equity. 19. Companies IPO because ..... A) All of the mentioned reasons. B) It allows original shareholders to exit. C) They want to raise funds. D) It allows employees to enjoy the company's success. Show Answer Correct Answer: A) All of the mentioned reasons. 20. Company X currently has book value per share of THB 20 and cost of equity of 12%. If its ROE is 15% and dividend payout ratio is 80%, its sustainable growth rate is: A) 3%. B) 2.4%. C) 12%. D) 9.6%. Show Answer Correct Answer: A) 3%. ← PreviousNext →Related QuizzesAccounting QuizzesIntermediate Accounting Quiz 1Intermediate Accounting Quiz 2Intermediate Accounting Quiz 3Intermediate Accounting Quiz 4Intermediate Accounting Quiz 5Intermediate Accounting Quiz 6Intermediate Accounting Quiz 7Intermediate Accounting Quiz 8Intermediate Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books