This quiz works best with JavaScript enabled. Home > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Inflows and outflows of cash related to transactions entering into the determination of net income A) Operating Activity. B) Investing Activity. C) Financial Activity. D) None of above. Show Answer Correct Answer: A) Operating Activity. 2. Amounts invested by shareholders in the corporation A) Paid in Capital. B) Retained Earnings. Show Answer Correct Answer: A) Paid in Capital. 3. The following are not types of current debt, namely: A) Cash dividends payable. B) Stock dividends payable. C) Income received in advance. D) Bond debt. Show Answer Correct Answer: D) Bond debt. 4. On January 1, 2011, Oliver Foods issued stock options for 50, 000 shares to a division manager. The options have an estimated fair value of P10 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Oliver Foods' stock price increases by 5% in four years. Oliver Foods initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in each of the next five years? A) P60, 000. B) P150, 000. C) P50, 000. D) P100, 000. Show Answer Correct Answer: D) P100, 000. 5. The main components of an income statement include..... A) Income Expenses. B) Income Expense Profit. C) Income Expense Other Income Other Expenses. D) Income Expenses Other income Other expenses Other profits. Show Answer Correct Answer: C) Income Expense Other Income Other Expenses. 6. Namwan and Namkhing set up the Khingwan Partnership, agreeing to give Namwan and Namkhing a salary of 180, 000 baht and 192, 000 baht, respectively, with the remainder splitting profits equally. The current year's net profit is 400, 000 baht. How much share does each partner receive? A) Sweet water 200, 000 baht, ginger juice 200, 000 baht. B) Sweet water 194, 000 baht, ginger juice 206, 000 baht. C) Sweet water 206, 000 baht, ginger juice 206, 000 baht. D) Sweet water 206, 000 baht, ginger juice 194, 000 baht. Show Answer Correct Answer: B) Sweet water 194, 000 baht, ginger juice 206, 000 baht. 7. Made to maintain a given level of benefits provided by the asset and do not increase future benefits.What is this? A) Expensing. B) Improvements. C) Repairs and Maintenance. D) Substitution. Show Answer Correct Answer: C) Repairs and Maintenance. 8. COGS / Average InventoryThe higher the ratio, the more effectively a company manages its inventory A) Gross Profit Ratio. B) Inventory turnover ratio. Show Answer Correct Answer: B) Inventory turnover ratio. 9. When establishing a company, the owner always hopes that the company he establishes will operate for a long period of time. This in the accounting structure is called an assumption..... A) Periodicity. B) Business continuity. C) Unit moneter. D) Economic Entity. Show Answer Correct Answer: B) Business continuity. 10. Which statement is incorrect regarding the nature of a partnership? A) It must be made in the form of a written partnership establishment contract only. B) A partnership consists of two or more people. C) Agree to do activities to share profits. D) The allocation of profits and losses depends on the contractual terms. Show Answer Correct Answer: A) It must be made in the form of a written partnership establishment contract only. 11. Debit ..... if write-down is common for the particular company A) COGS. B) Loss. Show Answer Correct Answer: A) COGS. 12. In financing activities, the primary sources of financing for most business are owner and ..... ? A) Neighbors. B) Parents. C) Creditors. D) Friends. Show Answer Correct Answer: C) Creditors. 13. Which is a type of current liability where the time and amount of payment cannot be determined with certainty? A) Estimating debt for gratuity. B) Short term bills. C) Advance income. D) Accrued expenses. Show Answer Correct Answer: A) Estimating debt for gratuity. 14. A company purchased a machine on 31 August 20X0 for CU22, 000. The machine is estimated to have a useful life of 7 years and an estimated residual value of IDR 1, 000. On June 30 2014, the machine was sold for IDR 9, 000. The end of the company's financial year is December 31. The company's accounting policy charges depreciation on a monthly basis using the straight-line method. What is the loss on disposal of machinery in the profit or loss statement for the financial year ended 31 December 20X4? A) 1.000. B) 1.500. C) 3.500. D) 5.800. Show Answer Correct Answer: B) 1.500. 15. Layla Company issued a 3-year, P 150, 000 face value non interest-bearing note payable in exchange for a new machinery on January 1 (Year 1). The note is payable in 3 equal annual installments every January 1, starting year 1. No cash price of the machinery is available. The prevailing rate for similar note is 12%. PV of 1 at 12% for 3 periods is 0.7118. PV of an ordinary annuity of 1 at 12% periods us 2.4018. PV of an annuity due at 12% for 3 period us 2.6900. How much is the interest expense for Year 1? A) 8, 410. B) 10, 140. C) 16, 140. D) 14410. Show Answer Correct Answer: B) 10, 140. 16. Resources controlled by a company as a result of past events and from which the company's economic benefits are expected to be derived in the future are the definition of..... A) Liabilities. B) Asset. C) Equity. D) Income. Show Answer Correct Answer: B) Asset. 17. Namwan and Namkhing established the Khingwan Partnership and agreed to share profits in the ratio of 6:4. Net profit for the current year is 500, 000 baht. How much share does each partner receive? A) Sweet water 300, 000 baht, ginger juice 200, 000 baht. B) Sweet water 200, 000 baht, ginger juice 300, 000 baht. C) Sweet water 206, 000 baht, ginger juice 206, 000 baht. D) Sweet water 206, 000 baht, ginger juice 194, 000 baht. Show Answer Correct Answer: A) Sweet water 300, 000 baht, ginger juice 200, 000 baht. 18. Dion Corporation made credit sales of $ 40, 000 which are subject to 5% sales tax. The corporation also made cash sales which totaled $ 30, 555 including the 5% sales tax. What is the journal entry to record Dion's cash? A) Dr. Cash $ 30, 555Cr. Sales $ 29, 100Cr. Sales tax payable $ 1, 455. B) Dr. Cash $ 29, 100Dr. Sales $ 1, 455Cr. Sales tax payable $ 30, 555. C) Dr. Accounts receivable $ 42, 000Cr. Sales $ 40, 000Cr. Sales tax payable $ 2, 000. D) Dr. Accounts receivable $ 30, 555Cr. Sales $ 29, 100Cr. Sales tax payable $ 1, 455. E) Dr. Accounts receivable $ 40, 000Dr. Sales tax payable $ 2, 000Cr. Sales $ 42, 000. Show Answer Correct Answer: A) Dr. Cash $ 30, 555Cr. Sales $ 29, 100Cr. Sales tax payable $ 1, 455. 19. The lease payments shall be accounted using what rate? A) Market Rate implicit in the lease. B) Interest Rate implicit in the lease. C) Effective Rate implicit in the lease. D) Nominal Rate implicit in the lease. Show Answer Correct Answer: B) Interest Rate implicit in the lease. 20. International Accounting standard setting bodies are A) IAI. B) IASB. C) IFRS. D) DSAK. Show Answer Correct Answer: B) IASB. ← PreviousNext →Related QuizzesAccounting QuizzesIntermediate Accounting Quiz 1Intermediate Accounting Quiz 3Intermediate Accounting Quiz 4Intermediate Accounting Quiz 5Intermediate Accounting Quiz 6Intermediate Accounting Quiz 7Intermediate Accounting Quiz 8Intermediate Accounting Quiz 9Intermediate Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books