This quiz works best with JavaScript enabled. Home > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 8 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How many methods are there to measure value? A) 1. B) 2. C) 3. D) 4. Show Answer Correct Answer: D) 4. 2. Obama Inc. trades its used machine for a new model at Bezos Inc. The exchange has commercial substance. The used machine has a book value of $ 10, 000 (original cost $ 16, 000 less $ 6, 000 accumulated depreciation) and fair value of $ 8, 000. The new model lists for $ 20, 000. Bezos gives Obama a trade-in allowance of $ 11, 000 for the used machine. What is the journal entry to record this transaction at Obama? A) Dr. Equipment $ 17, 000Dr. Accumulated Depreciation-Equipment $ 6, 000Cr. Equipment $ 16, 000Cr. Cash $ 7, 000. B) Dr. Equipment $ 17, 000Dr. Loss on Disposal of Equipment $ 2, 000Cr. Equipment $ 16, 000Cr. Cash $ 3, 000. C) Dr. Equipment $ 20, 000Dr. Accumulated Depreciation-Equipment $ 6, 000Dr. Loss on Disposal of Equipment $ 2, 000Cr. Equipment $ 16, 000Cr. Cash $ 12, 000. D) Dr. Equipment $ 20, 000Dr. Accumulated Depreciation-Equipment $ 6, 000Cr. Equipment $ 16, 000Cr. Cash $ 10, 000. E) Dr. Equipment $ 17, 000Dr. Accumulated Depreciation-Equipment $ 6, 000 Dr. Loss on Disposal of Equipment $ 2, 000Cr. Equipment $ 16, 000Cr. Cash $ 9, 000. Show Answer Correct Answer: E) Dr. Equipment $ 17, 000Dr. Accumulated Depreciation-Equipment $ 6, 000 Dr. Loss on Disposal of Equipment $ 2, 000Cr. Equipment $ 16, 000Cr. Cash $ 9, 000. 3. The cost of an item of fixed assets shall be recognized as an asset if, and only if: A) It is probable that future economic benefits associated with the item will flow to the entity. B) The cost of the item can be measured reliably. C) All of the above. D) None of the above. Show Answer Correct Answer: C) All of the above. 4. On January 1, 2015, Yorry Manufacturing Company purchased equipment from Woles Inc. There is no market price for this equipment which has a useful life of 8 years with no residual value. Yorry handed over to Woles a £105, 000 zero-interest-bearing note payable in 3 equal annual installments of £35, 000, with the first payment due December 31, 2015. The applicable market interest rate for this type of note is 8%. The present value of the note at 8% was £90, 199. Assuming Yorry uses the straight-line method of depreciation, how much will be reported as interest expense for notes payable and equipment depreciation expense in 2015? A) £7, 216; £11, 275. B) £7, 216; £30, 066. C) £8, 400; £13, 125. D) £1, 750; £8, 750. Show Answer Correct Answer: A) £7, 216; £11, 275. 5. Why did the AICPA create the Accounting Principles Board? A) The SEC disbanded the previous standard setting organization. B) The previous standard setting organization did not provide a structured set of accounting principles. C) No such organization existed in the past. D) None of the above. Show Answer Correct Answer: B) The previous standard setting organization did not provide a structured set of accounting principles. 6. PT VERY purchased some new equipment on 1 April 20X1 for Rp. 6, 000, 000. The residual value of the new equipment over a 5 year period is estimated at IDR 300, 000. PT VERY charges monthly depreciation on the straight-line method. What was the depreciation charge for the equipment in the one-year reporting period to 30 September 20X1? A) Rp570.000. B) Rp1.140.000. C) Rp600, 000. D) Rp1.200.000. Show Answer Correct Answer: A) Rp570.000. 7. The following are Advantages of Sole Proprietorship, except? A) Low cost of formation and dissolution. B) Independent and Flexibility. C) Tax advantage and less Government regulation. D) None of the choices. Show Answer Correct Answer: D) None of the choices. 8. Represents the basic financial position elements (Assets, Liabilities, and Stockholders' Equity) A) Permanent Accounts. B) Temporary Accounts. Show Answer Correct Answer: A) Permanent Accounts. 9. Buyer's location. Buyer has rights to inventory as soon as items have arrived to their unloading dock. Seller has rights to inventory while in truck. A) F.O.B. Shipping point. B) F.O.B. Destination point. Show Answer Correct Answer: B) F.O.B. Destination point. 10. Amounts earned by the corporation on behalf of its shareholders A) Paid in Capital. B) Retained Earnings. Show Answer Correct Answer: B) Retained Earnings. 11. On March 1, 2020, Jai Jai Company Limited issued 10, 000 Stock Rights to existing shareholders, with 2 rights to purchase 1 common share worth 100 baht per share, at a price of 105 baht per share. Common shares have the market price as of today, per share. 120 baht The right expires on July 31, 2020. How should the company record the accounts on the date of granting the right? A) Memorandum:Issued 10, 000 rights certificates to purchase 5, 000 common shares at 105 baht per share by July 31, 2020. B) Dr. Warrant to purchase shares 500, 000Cr. Ordinary shares 500, 000. C) Dr. Warrant to purchase shares 525, 000Cr. Common shares 500, 000 Premium on common shares 25, 000. D) Dr. Warrant to purchase shares 500, 000Cr. Surplus-rights to purchase common shares 500, 000. E) There are no records of any transactions. On the day of granting rights. Show Answer Correct Answer: A) Memorandum:Issued 10, 000 rights certificates to purchase 5, 000 common shares at 105 baht per share by July 31, 2020. 12. Net realizable value = A) Estimated selling price-costs of completion, disposal, and transportation. B) Estimated selling price + costs of completion, disposal, and transportation. C) Estimated selling price / costs of completion, disposal, and transportation. D) Estimated selling price x costs of completion, disposal, and transportation. Show Answer Correct Answer: A) Estimated selling price-costs of completion, disposal, and transportation. 13. On May 1, 2006, a machine was purchased for Rp. 25, 000, 000.00. For repairs and testing, a fee of IDR 5, 000, 000.00 will be incurred. The economic life of the car is estimated at 5 years with a residual value of IDR 6, 000, 000.00. depreciation using the straight line method. If the machine is sold on September 1, 2008 for Rp. 19, 000, 000.00, then the sale occurs..... A) Profit IDR 1, 900, 000.00. B) Loss of IDR 800, 000.00. C) Loss IDR 1, 800, 000.00. D) Profit IDR 200, 000.00. Show Answer Correct Answer: D) Profit IDR 200, 000.00. 14. What is the inclusion of only the incremental overhead costs? A) Overhead Allocation. B) Interest Capitalization. C) Qualifying Assets. D) Self Constructed Assets. Show Answer Correct Answer: A) Overhead Allocation. 15. The portion of authorized shares that have been issued in the market A) Authorized Shares. B) Issued Shares. C) Outstanding Shares. D) None of above. Show Answer Correct Answer: B) Issued Shares. 16. Accumulated building depreciation in the trial balance K Rp. 6, 000, 000.00 the acquisition price of the building is Rp. 60, 000, 000.00. If the building depreciation at the end of each year is Rp. 3, 000, 000.00. So the estimated building depreciation expense in the year-end trial balance is..... A) D Rp. 60, 000, 000.00. B) D Rp. 9, 000, 000.00. C) D Rp. 6, 000, 000.00. D) D Rp. 3, 000, 000.00. Show Answer Correct Answer: D) D Rp. 3, 000, 000.00. 17. Bond issuance costs, including printing costs and legal fees associated with the bond issuance, should be A) Recorded as an expense in the bond issuance period. B) Recorded as a deduction from the carrying value of the bond. C) Recorded as a deferred expense and amortized over the term of the bond. D) Reported as an expense in the period the bond matures. Show Answer Correct Answer: B) Recorded as a deduction from the carrying value of the bond. 18. The key distinction between current liabilities and long-term liabilities is: A) The amount of the obligation to be satisfied-large vs small. B) To whom the obligation is owed-those inside versus those outside of the company. C) The length of time until the obligation is expected to be satisfied-less than one year vs more than one year, or operating cycle if longer. D) The nature of the obligation-determination amount versus estimated amount. Show Answer Correct Answer: C) The length of time until the obligation is expected to be satisfied-less than one year vs more than one year, or operating cycle if longer. 19. Refers to matching each unit sold during the period or each unit on hand at the end of the accounting period with its actual account.Used by companies selling unique, expensive products with low sales volume (ex. car dealerships) A) Specific Identification method. B) Average Cost. C) FIFO (First In, First Out). D) LIFO (Last in, First Out). Show Answer Correct Answer: A) Specific Identification method. 20. Jai Jai Company Limited has 20, 000 issued and paid-up common shares with a value of 50 baht per share, 10, 000 12% preferred shares with a value of 100 baht per share. The last cash dividend was paid in 2017. Later in 2020, it announced a total dividend payment of 350, 000. Baht in the case of preferred shares It is a participation type not exceeding 20%. How much dividends will the preferred shares receive? A) 142, 000 baht. B) 128, 800 baht. C) 230, 000 baht. D) 156, 000 baht. E) 200, 000 baht. Show Answer Correct Answer: E) 200, 000 baht. ← 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 9Intermediate Accounting Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books