This quiz works best with JavaScript enabled. Home > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 17 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 17 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Moly Co. incurs $ 200, 000 in legal costs on January 1, 2016, to successfully defend a patent. The patent's useful life is 20 years, amortized on a straight-line basis. What is the journal entry to record the legal fees? A) Dr. Patents $ 200, 000Cr. Account Payable $ 200, 000. B) Dr. Patents $ 200, 000Cr. Cash $ 200, 000. C) Dr. Amortization Expense $ 200, 000Cr. Patents $ 200, 000. D) Dr. Amortization Expense $ 10, 000Cr. Patents $ 10, 000. E) Dr. Patents $ 10, 000Cr. Cash $ 10, 000. Show Answer Correct Answer: B) Dr. Patents $ 200, 000Cr. Cash $ 200, 000. 2. Statement of financial position only for shareholders of Jing Jai Company Limited as of March 31, 2020, as follows:2, 000 preferred shares, value 50 baht each, 100, 000 baht, common shares 1, 500 shares, value 100 baht each, 150, 000 baht, excess value of preferred shares 10, 000 baht, profit Accumulated 40, 000 baht Conversion conditions:10 preferred shares, convertible to 7 common shares. There are 400 preferred shares shareholders requesting conversion. Please show the accounting records as of the conversion date. A) Dr. Preferred share capital 20, 000 Cr. Ordinary share capital 20, 000. B) Dr. Preferred share capital 20, 000 Surplus value of preferred shares 2, 000 Cr. Common share capital 22, 000. C) Dr. Preferred share capital 20, 000 Premium on preferred shares 2, 000 Retained earnings 6, 000 Cr. Common share capital 28, 000. D) Dr. Preferred share capital 20, 000 Surplus on preferred shares 2, 000 Cr. Ordinary share capital 20, 000 Surplus on common shares 2, 000. E) Dr. Ordinary share capital 20, 000 Cr. Preferred share capital 20, 000. Show Answer Correct Answer: C) Dr. Preferred share capital 20, 000 Premium on preferred shares 2, 000 Retained earnings 6, 000 Cr. Common share capital 28, 000. 3. A non-current asset was purchased on the first day ofan accounting period, 1 January 2018 for P34, 000 anddepreciated by 20% per annum using the reducingbalance method. On 30 June 2020 the asset was sold, realizing a loss on disposal of P2, 100. What were the proceeds of sale? A) P14, 900. B) P17, 484. C) For 19, 660. D) P21, 684. Show Answer Correct Answer: B) P17, 484. 4. Debt is A) Assets. B) Liabilities. C) Equity. D) Financial Statements. Show Answer Correct Answer: B) Liabilities. 5. What is an acquisition of a group of assets for a single sum? A) Multiple sum. B) Group sum. C) Lump sum. D) None of above. Show Answer Correct Answer: C) Lump sum. 6. Monsters Inc. declared a $ 160, 000 cash dividend. The Company has 6, 000 shares of preference, 7%, $ 100 par value cumulative preference shares outstanding. There is a dividend in arrears for one year for preference shares. How much cash will be distributed to ordinary shareholders? A) $ 76, 000. B) $ 84, 000. C) $ 118, 000. D) There isn't any. Show Answer Correct Answer: A) $ 76, 000. 7. IFRS is the basis of accounting standards used in Indonesia. IFRS stands for A) International Federation of Reporting Services. B) Independent Financial Reporting Standards. C) Integrated Financial Reporting Services. D) International Financial Reporting Standards. Show Answer Correct Answer: D) International Financial Reporting Standards. 8. Which of the following is not a reason why revenue is recognized at time of sale? A) Realization has occurred. B) The sale is the critical event. C) Title legally passes from seller to buyer. D) All of these are reasons to recognize revenue at time of sale. Show Answer Correct Answer: D) All of these are reasons to recognize revenue at time of sale. 9. Goods in the form of raw materials that will be processed into finished goods are..... A) Merchandise inventory. B) Work on proces inventory. C) Inventory system'. D) Finishing goods inventory. E) Raw material inventory. Show Answer Correct Answer: E) Raw material inventory. 10. Non-Controlling Interests (Minority Interests) are disclosed in the statement of changes in equity section..... A) Assets. B) Short-term liabilities. C) Long Term Liabilities. D) Equity. Show Answer Correct Answer: D) Equity. 11. The following are not included in the COGS calculation:..... A) Ending Inventory. B) Purchase Discount. C) Freight out. D) Freight in. Show Answer Correct Answer: C) Freight out. 12. Lease term refers to the cancelable period of lease together with:a. periods covered by an option to renew if the lessee is reasonably certain to exercise that optionb. periods covered by an option to terminate the lease if the lessee is reasonably certain NOT to exercise that option A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 13. Debt Service Coverage ratio (DSCR) is 2.13. This is a sign of good health? A) True. B) False. Show Answer Correct Answer: A) True. 14. Journal Entries-Closing recorded A) 24/7. B) Monthly. C) Year-end. D) None of above. Show Answer Correct Answer: C) Year-end. 15. What type of dividend does not reduce equity? A) Cash dividends. B) Share dividends. C) Property dividends. D) Liquidating dividends. Show Answer Correct Answer: B) Share dividends. 16. Cupcake Co. started 2020 with P94, 000 ofmerchandise inventory on hand. During 2020, P400, 000 in merchandise was purchased on accountwith credit terms of 1/15, n/45. All discounts weretaken. Purchases were all made f.o.b. shipping point.Cupcake paid freight charges of P7, 500. Merchandisewith an invoice amount of P5, 000 was returned forcredit. Cost of goods sold for the year was P380, 000.Cupcake uses a perpetual inventory system. What is ending inventory assuming Cupcake uses thegross method to record purchases? A) P112, 490. B) P112, 550. C) P116, 500. D) P120, 300. Show Answer Correct Answer: B) P112, 550. 17. On December 31, 2014, the following is PT Salvador's balance:Bonds Payable $ 1, 380, 000 Interest Payable 37, 000 If the bonds are redeemed on January 1, 2015 for $ 1, 530, 000 (after interest payments), how much does Salvador report as loss on extinguishment? A) $ 37, 000. B) $ 113, 000. C) $ 150, 000. D) $ 187, 000. Show Answer Correct Answer: C) $ 150, 000. 18. Lifo reserves formula A) Inventory Account balance under lifo for external reporting and income tax purposes minus Inventory account balance under FIFO and average cost used to maintain internal records. B) Inventory Account balance under lifo for internal reporting and income tax purposes minus Inventory account balance under FIFO and average cost used to maintain internal records. C) Inventory Account balance under lifo for internal reporting and income tax purposes plus Inventory account balance under FIFO and average cost used to maintain internal records. D) Inventory Account balance under lifo for external reporting and income tax purposes plus Inventory account balance under FIFO and average cost used to maintain internal records. Show Answer Correct Answer: A) Inventory Account balance under lifo for external reporting and income tax purposes minus Inventory account balance under FIFO and average cost used to maintain internal records. 19. Close the temporary accounts to retained earnings and prepare a post-closing trial balance. A) During the Accounting Period. B) At the end of the Accounting Period. C) At the end of the year. D) None of above. Show Answer Correct Answer: C) At the end of the year. 20. Naruko Company received a P1, 800, 000 subsidy fromthe government to purchase manufacturing equipmenton January 2, 2020. The equipment has a cost ofP3, 000, 000, a useful life of five years, and no salvagevalue. Naruko depreciates the equipment using sumof-the-years' digits method. If Naruko chooses to account for the grant as deferred income, the grant income to be recognized in 2020 is A) Nil. B) Give 0, 000. C) P400, 000. D) P600, 000. Show Answer Correct Answer: D) P600, 000. ← 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