This quiz works best with JavaScript enabled. Home > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Loan acceleration is to give a loan to the borrower quickly. A) True. B) False. Show Answer Correct Answer: B) False. 2. Involves cash inflows and outflows from transactions with creditors and owners A) Operating Activity. B) Investing Activity. C) Financial Activity. D) None of above. Show Answer Correct Answer: C) Financial Activity. 3. Income Taxes and Net Income purposes. Provides higher cost of goods sold and therefore, lower net income than the other methods A) FIFO. B) LIFO. Show Answer Correct Answer: B) LIFO. 4. The entity depreciates the fixed assets with an estimated useful life of 10 years, so that the depreciation expense will be recognized for 10 years of use of the assets. What are the basic assumptions underlying these accounting policies? (Entities depreciate fixed assets owned with an estimated useful life of 10 years, so that depreciation expense will be recognized over 10 years of use of the assets. What basic assumptions underlie these accounting policies?) A) Monetary unit. B) Periodicity. C) Going concern. D) Economic entity. Show Answer Correct Answer: C) Going concern. 5. Dividends paid/distributed in the form of shares themselves are called..... A) Debt Dividends. B) Liquidating Dividends. C) Stock Dividends. D) Dividend Kas. Show Answer Correct Answer: C) Stock Dividends. 6. N/30 means A) 2 10s and 30 ns. B) 2% discount if paid within ten days, otherwise full payment within 30 days. C) 2% discount if paid within ten days, 30% discount within n amount of days. D) 2% discount if paid within 30 days. Show Answer Correct Answer: B) 2% discount if paid within ten days, otherwise full payment within 30 days. 7. On December 31, Year 1, Zilong Company had an overdue 10% note payable to Aldous Bank worth 8 million and an accrued interest of P 800, 000. On that date, Aldous Bank offered modification of terms of the liability as follows:> Principal is reduced by P 2 million and accrued interest is condoned> Maturity is extended to December 31, Year 5> The new interest rate of 12% is payable every December 31> PV of 1 at 10% for 4 periods is 0.683 and PV of 1 at 12% for 4 periods is 0.636> PV of an ordinary annuity of 1 at 10% for 4 period is 3.17 and PV of an ordinary annuity of 1 at 12% for 4 period is 3.037How much is the PV of the new note payable at Year 1? A) 6, 380, 400. B) 6, 002, 640. C) 4, 098, 000. D) 3, 816, 000. Show Answer Correct Answer: A) 6, 380, 400. 8. How can property, plant, and equipment be acquired? A) Purchase, donation, lease, exchange, business, self construction. B) Inheritance. Show Answer Correct Answer: A) Purchase, donation, lease, exchange, business, self construction. 9. Accumulated Other Comprehensive Income in SOFP will fall into the category..... A) Assets. B) Liabilities. C) Equity. D) None of above. Show Answer Correct Answer: C) Equity. 10. Recognizes and measure the assets and liabilities that exist at a balance sheet date. A) Revenue/Expense Approach. B) Asset/Liability Approach. Show Answer Correct Answer: B) Asset/Liability Approach. 11. The purchase transportation costs borne by the buyer are called..... A) FOB Shoping Point'. B) FOB Destination. C) Received of Goods. D) Freight In. E) Freight Out. Show Answer Correct Answer: D) Freight In. 12. Short term Investments occur when A) The company has the ability and intent to sell within the next 12 months or operating cycle. B) The company has the ability and intent to sell within the next 9 months or operating cycle. C) The company has the ability and intent to sell within the next 6 months or operating cycle. D) The company has the ability and intent to sell within the next 24 months or operating cycle. Show Answer Correct Answer: A) The company has the ability and intent to sell within the next 12 months or operating cycle. 13. The accounting profession requires a conceptual framework to....., except: A) Building and related to the concept being built. B) Provides a basic framework for solving accounting problems. C) Increasing the comparability of financial reports between companies. D) Providing information to capital providers. Show Answer Correct Answer: D) Providing information to capital providers. 14. Lower of cost or net realizable value.Used for companies that use FIFO, Average Cost, or any other method besides LIFO or the retail inventory method A) LCNRV. B) LCM. Show Answer Correct Answer: A) LCNRV. 15. Refers to the assets of a company A) COGS. B) Inventory. Show Answer Correct Answer: B) Inventory. 16. Ifa company must pay the shipping costs on inventory it purchased, what will be included in the journal entry to pay the freight company? A) Debit to Cash. B) Debit to Freight Expense. C) C. Debit to Inventory. D) D. Debit to Cost of Goods Sold. Show Answer Correct Answer: C) C. Debit to Inventory. 17. Which of the following is not a shareholder right? A) The preemptive right. B) The right to share in dividends. C) The right to vote on the board of directors. D) The right to participate in management decisions. Show Answer Correct Answer: D) The right to participate in management decisions. 18. Which of the following costs can be recognized in fixed assets? A) Purchase of vehicles for resale. B) Annual costs for painting factory floors. C) Repair of windows in a building. D) Legal costs incurred on the purchase of the building. Show Answer Correct Answer: D) Legal costs incurred on the purchase of the building. 19. Spencer Co. incurs $ 220, 000 in legal costs on January 1, 2015, 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 amortization at the end of 2015? A) Dr. Patents $ 220, 000Cr. Cash $ 220, 000. B) Dr. Cash $ 220, 000Cr. Patents $ 220, 000. C) Dr. Amortization Expense $ 220, 000Cr. Patents $ 220, 000. D) Dr. Amortization Expense $ 11, 000Cr. Patents $ 11, 000. E) Dr. Amortization Expense $ 11, 000Cr. Cash $ 11, 000. Show Answer Correct Answer: D) Dr. Amortization Expense $ 11, 000Cr. Patents $ 11, 000. 20. What does deposit in transit mean? A) Money lost by the financial officer. B) The money that the business deposits in the bank is then used by bank officials first. C) The money that the business has deposited in the bank has not yet been recorded by the bank officials. D) Money that the salesperson will bring to the business. Show Answer Correct Answer: C) The money that the business has deposited in the bank has not yet been recorded by the bank officials. ← PreviousNext →Related QuizzesAccounting QuizzesIntermediate Accounting Quiz 1Intermediate Accounting Quiz 2Intermediate 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