This quiz works best with JavaScript enabled. Home > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the bond interest payment dates are May 1 and November 1, and the bond is sold on June 1, the amount of cash received by the bond issuer will be A) Minus interest owed from June 1 to November 1. B) Minus interest owed from May 1 to June 1. C) Plus interest owed from June 1 to November 1. D) Plus interest owed from May 1 to June 1. Show Answer Correct Answer: D) Plus interest owed from May 1 to June 1. 2. Unearned income is recorded in the financial statements, i.e A) Income statement. B) Financial position report. C) Cash flow statement. D) Capital change report. Show Answer Correct Answer: B) Financial position report. 3. Which of the following is (are) the proper time period(s) to record the effects of a change in accounting estimate? A) Current period and prospectively. B) Current period and retrospectively. C) Retrospectively only. D) Current period only. Show Answer Correct Answer: A) Current period and prospectively. 4. Which of the following best describes retained earnings? A) Cash available for dividends. B) The amount initially invested in the business by stockholders. C) Cash available for expansion and growth. D) Income that has been reinvested in the business rather than distributed as dividends to stockholders. Show Answer Correct Answer: D) Income that has been reinvested in the business rather than distributed as dividends to stockholders. 5. Economic Entity A) Business is separate from owners. Economic events identified specifically with an . B) Assumption anticipates that a business entity will continue to operate indefinitely. C) Assumption allows the life of a company to be divided into artificial time periods to provide timely information. D) Transaction and reports stated in dollars. Show Answer Correct Answer: A) Business is separate from owners. Economic events identified specifically with an . 6. The differences between GAAP (FASB) and IFRS (IASB) A) FASB has worked on relatively narrow products, such as the definition off materiality and a more general disclosure framework. B) IASB has moved forward with a more comprehensive overhaul of its conceptual framework. C) IASB has worked on relatively narrow products, such as the definition off materiality and a more general disclosure framework. D) FASB has moved forward with a more comprehensive overhaul of its conceptual framework. Show Answer Correct Answer: A) FASB has worked on relatively narrow products, such as the definition off materiality and a more general disclosure framework. 7. Primary focus of financial accounting is: A) Providing financial information to external users. B) Providing financial information to internal users. C) Make sure books balance. D) Make sure company follows rules. Show Answer Correct Answer: A) Providing financial information to external users. 8. Carry Industries donates land to the city of Los Angeles for a city park. The land cost $ 100, 000 and has a fair value of $ 130, 000. What is the journal entry in Carry Industries to record this donation? A) Dr. Contribution Expense $ 100, 000Cr. Land $ 100, 000. B) Dr. Contribution Expense $ 130, 000Cr. Land $ 100, 000Cr. Gain on Disposal of Land $ 30, 000. C) Dr. Contribution Expense $ 130, 000Cr. Land $ 130, 000. D) Dr. Contribution Expense $ 100, 000Dr. Gain on Disposal of Land $ 30, 000Cr. Land $ 130, 000. E) None of these. Show Answer Correct Answer: B) Dr. Contribution Expense $ 130, 000Cr. Land $ 100, 000Cr. Gain on Disposal of Land $ 30, 000. 9. The use of company financial statements for potential creditors is: A) As a consideration in investing capital. B) To find out the distribution of profits to shareholders. C) To find out the amount of company capital. D) As a consideration when providing credit. Show Answer Correct Answer: D) As a consideration when providing credit. 10. What are assets that are constructed for a company's own use as well as assets constructed as discrete projects for sale on lease? A) Interest Capitalization. B) Self Constructed Assets. C) Overhead Allocation. D) Qualifying Assets. Show Answer Correct Answer: D) Qualifying Assets. 11. Sales returns for perpetual inventory owner ship depends on A) Ownership of goods. B) Consignee. C) Consignor. D) Reduction of purchases. Show Answer Correct Answer: D) Reduction of purchases. 12. Repayment of bonds previously issued at a premium price is repaid by issuing new bonds between interest payment dates. So at the time of the reacquisition A) All costs related to the issuance of (old) bonds are amortized up to the reacquisition date. B) The premium must be amortized up to the reacquisition date. C) There is accrued interest from the date of the last interest payment until the date of reacquisition. D) All answers are correct. Show Answer Correct Answer: D) All answers are correct. 13. In the event that the subscriber fails to pay for the shares According to Thai law, what does a company do regarding confiscated shares? A) Forfeit part of all monies already paid. B) Issue shares equal to the amount already paid. C) Refund to forfeited shareholders the amount received after deducting losses and expenses incurred from the resale of shares. D) Refund to forfeited shareholders equal to the amount received. E) The company can choose to choose any one method. And you must use that method regularly. Show Answer Correct Answer: C) Refund to forfeited shareholders the amount received after deducting losses and expenses incurred from the resale of shares. 14. The entity when preparing the consolidated financial statements eliminates transactions that occur between the subsidiary and the parent company. What assumptions underlie the accounting treatment? When preparing consolidated financial statements, an entity eliminates transactions that occur between subsidiaries and parent companies. What assumptions underlie this accounting treatment? A) Accrual. B) Periodicity. C) Going concern. D) Entity. Show Answer Correct Answer: D) Entity. 15. Tory Manufacturing Co. ships merchandise costing $ 42, 000 on consignment to Kelly Stores. Tory pays $ 4, 500 of freight costs, and Kelly pays $ 2, 500 for local advertising costs that reimbursable from Tory. By the end of the period, Kelly has sold two-thirds of the consigned merchandise for $ 46, 000 cash. What is the journal entry at Tory to record the shipment of consigned merchandise? A) Dr. Inventory on Consignment $ 42, 000Cr. Finished Goods Inventory $ 42, 000. B) Dr. Finished Goods Inventory $ 42, 000Cr. Inventory on Consignment $ 42, 000. C) No entry. D) Dr. Inventory on Consignment $ 46, 000Cr. Finished Goods Inventory $ 46, 000. E) Dr. Finished Goods Inventory $ 46, 000Cr. Inventory on Consignment $ 46, 000. Show Answer Correct Answer: A) Dr. Inventory on Consignment $ 42, 000Cr. Finished Goods Inventory $ 42, 000. 16. Which of the following is considered cash according to accounting meaning? A) Banknotes and coins. B) Bank draft. C) Order. D) All correct. Show Answer Correct Answer: D) All correct. 17. Ending Inventory equation (CGS) A) Beginning Inventory-Purchases + CGS = Ending Inventory. B) Beginning Inventory + Purchases-CGS = Ending Inventory. C) Beginning Inventory + Purchases + CGS = Ending Inventory. D) Beginning Inventory-Purchases = Ending Inventory. Show Answer Correct Answer: B) Beginning Inventory + Purchases-CGS = Ending Inventory. 18. What is consigned inventory? A) Goods that are shipped, but title transfers to the receiver. B) Goods that are sold, but payment is not required until the goods are sold. C) Goods that are sold, but payment is not required until the goods are sold. D) None of above. Show Answer Correct Answer: B) Goods that are sold, but payment is not required until the goods are sold. 19. A company's business activities with regards to cash receipts and payments are divided up between Operating, Investing, and Financing. Which of the following is considered Operating? A) Inflow of cash from the sale of an old factory. B) Outflow of cash for payment on a Note Payable. C) Outflow of cash for payment on an Insurance policy. D) Outflow of cash for dividends paid to a stockholder. Show Answer Correct Answer: C) Outflow of cash for payment on an Insurance policy. 20. On March 1, 20X7, the company received cash amounting to Rp. 80, 000, 000 for services to be performed in April 20X7. The journal entry for the above transaction is A) Cash (D)Service Revenue (K)80 million. B) Debt (D)Service income (K)80 million. C) Cash (D)Unearned Service Revenue (K)80 million. D) Debt (D)Unearned Service Revenue (K)80 million. Show Answer Correct Answer: C) Cash (D)Unearned Service Revenue (K)80 million. ← PreviousNext →Related QuizzesAccounting QuizzesIntermediate Accounting Quiz 1Intermediate Accounting Quiz 2Intermediate Accounting Quiz 3Intermediate Accounting Quiz 4Intermediate Accounting Quiz 6Intermediate Accounting Quiz 7Intermediate Accounting Quiz 8Intermediate Accounting Quiz 9Intermediate Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books