This quiz works best with JavaScript enabled. Home > Finance > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 13 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 13 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In a perpetual inventory system, purchase returns affect which accounts? A) Reduction in both inventory and purchases. B) Reduction in just purchase. C) Increase in cash, decrease in purchases. D) Increase to both inventory and purchases. Show Answer Correct Answer: A) Reduction in both inventory and purchases. 2. The following is not a basic principle in sharia transactions A) Transactions are based on the principle of mutual understanding and mutual pleasureTransaksi didasarkan pada prinsip saling paham dan saling ridho. B) Transaction freedom of transaction as long as it is halal and thoyib Transaction freedom of transaction as long as it is halal and thoyib. C) Transactions are based on the principle of mudharabahTransaksi didasarkan prinsip mudharabah. D) Transactions are permissible as long as they are not illegal and prohibited. Transactions are permissible as long as they are not illegal and prohibited. Show Answer Correct Answer: C) Transactions are based on the principle of mudharabahTransaksi didasarkan prinsip mudharabah. 3. Cash will never get affected by an adjusted entry process A) False. B) True. Show Answer Correct Answer: B) True. 4. The criteria for recognition of revenue at the completion of production of precious metals and farm products include: A) An established market with quoted prices. B) Low additional costs of completion and selling. C) Units are interchangeable. D) All of these. Show Answer Correct Answer: D) All of these. 5. When bonds are issued between interest dates, the journal entries made are included A) Debit to Interest Payable. B) Credit to Unearned Interest. C) Credit to Interest Expense. D) Credit to Interest Receivable. Show Answer Correct Answer: C) Credit to Interest Expense. 6. ABC, Inc. issues bonds with a maturity value of $ 200, 000 and a maturity of 10 years after the date of issuance. If bonds are issued at a premium A) Market rate is greater than the nominal rate. B) Nominal rate is greater than the market rate. C) Market rate is the same as nominal rate. D) There is no relationship between market rate and nominal rate. Show Answer Correct Answer: B) Nominal rate is greater than the market rate. 7. The revenue recognition principle provides that revenue is recognized when: A) It is realized. B) It is realizable. C) It is realized or realizable and it is earned. D) None of these. Show Answer Correct Answer: C) It is realized or realizable and it is earned. 8. Fright-in costs to get inventory to the location of sale in a perpetual system is added to: A) Inventory accounts. B) Purchase account. C) Freight cost expense account. D) Freight-in temporary account. Show Answer Correct Answer: A) Inventory accounts. 9. Practice and body of knowledge concerned primarily with methods for recording transactions, keeping financial records, performing internal audits, reporting and analyzing financial information to the management. A) Financial Accounting. B) Financial Information. C) Accounting. D) None of the choices. Show Answer Correct Answer: C) Accounting. 10. The following are the accounts contained in the Statement of Financial Position, except A) Assets. B) Equity. C) Burden. D) Liabilities. Show Answer Correct Answer: C) Burden. 11. Miya 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 PV of the note payable at the end of Year 2 A) 41, 590. B) 28, 500. C) 44, 640. D) 84, 500. Show Answer Correct Answer: C) 44, 640. 12. Current liabilities are recorded at ..... amount. A) Discounted. B) Face. C) Future. D) Replacement. Show Answer Correct Answer: B) Face. 13. Assuming there is no preferred stock, book value per share of common stock is derived by which of the following: A) Stockholders' equity divided by the number of shares authorized. B) Stockholders' equity divided by the number of shares outstanding. C) Net income divided by the number of shares outstanding. D) Net income divided by the number of shares authorized. Show Answer Correct Answer: B) Stockholders' equity divided by the number of shares outstanding. 14. Rent revenue collected one year in advance shall be accounted as A) Separate item in the Shareholders' equity. B) Revenue in the year collected. C) Deferred income. D) Current liability. Show Answer Correct Answer: C) Deferred income. 15. Patrick sold 1, 000 shares of treasury for $ 15 per share. The cost for the shares was $ 10. The journal entry to record this transaction is: A) Dr. Cash $ 15, 000Cr. Treasury Stock $ 15, 000. B) Dr. Cash $ 10, 000Cr. Treasury Stock $ 10, 000. C) Dr. Cash $ 15, 000Cr. Preferred Stock $ 10, 000Cr. Paid-in Capital from Preferred Stock $ 5, 000. D) Dr. Cash $ 15, 000Cr. Treasury Stock $ 10, 000Cr. Paid-in Capital from Treasury Stock $ 5, 000. Show Answer Correct Answer: D) Dr. Cash $ 15, 000Cr. Treasury Stock $ 10, 000Cr. Paid-in Capital from Treasury Stock $ 5, 000. 16. Lease incentives granted by the lessor shall be included in determining the fixed lease payments. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 17. 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 non-accumulative type. How much dividends will common shares receive? A) 120, 000 baht. B) 250, 000 baht. C) 180, 000 baht. D) 350, 000 baht. E) 230, 000 baht. Show Answer Correct Answer: E) 230, 000 baht. 18. Sony Inc. borrowed $ 280, 000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31? A) $ 33, 600. B) $ 0. C) $ 8, 400. D) $ 25, 200. E) $ 22, 500. Show Answer Correct Answer: D) $ 25, 200. 19. What is the bank balance statement made for? A) Verify the accuracy of current bank deposits. B) Verify the authenticity of bank deposits in the form of fixed deposits. C) Verify the authenticity of savings bank deposits. D) All correct. Show Answer Correct Answer: D) All correct. 20. What is a natural resource? A) Initial cost. B) Oil, gas, timber tracts, mineral deposits. Show Answer Correct Answer: B) Oil, gas, timber tracts, mineral deposits. 21. Do not involve an exchange transaction with another entity A) Internal Events. B) External Events. Show Answer Correct Answer: A) Internal Events. 22. Neutrality in the qualitative characteristics of financial statements means..... A) Companies must choose information to present to one party over another, such as tax reports. B) Companies may choose information to present to one party rather than another. C) Companies do not prefer information to be presented to one party over another. D) All answers are wrong. Show Answer Correct Answer: C) Companies do not prefer information to be presented to one party over another. 23. Trump Inc. sold 14, 000 annual subscriptions on July 1, 2018, for $ 20 each. What is the journal entry at July 1, 2018? A) Dr. Unearned revenue $ 14, 000Cr. Subscription revenue $ 14, 000. B) Dr. Cash $ 280, 000Cr. Unearned revenue $ 280, 000. C) Dr. Unearned revenue $ 140, 000Cr. Subscription revenue $ 140, 000. D) Dr. Cash $ 14, 000Cr. Unearned revenue $ 14, 000. E) Dr. Unearned revenue $ 280, 000Cr. Cash $ 280, 000. Show Answer Correct Answer: B) Dr. Cash $ 280, 000Cr. Unearned revenue $ 280, 000. 24. Which of the following items affects diluted earnings per share? A) Redeemable preferred shares. B) Non-cumulative preferred shares. C) Cumulative preferred shares. D) Convertible preferred shares. E) Participatory preferred shares. Show Answer Correct Answer: D) Convertible preferred shares. 25. Involve the acquisition and sale of long term assets and non operating investment assets A) Operating Activity. B) Investing Activity. C) Financial Activity. D) None of above. Show Answer Correct Answer: B) Investing Activity. 26. The amount that can be received when selling an asset or paying a liability between parties who have sufficient knowledge of an arm's length transaction is called..... A) Historical costs. B) Fair value. C) Past Prices. D) All wrong. Show Answer Correct Answer: B) Fair value. 27. Estimate the costs of satisfying a performance obligation and then add an appropriate profit margin A) Adjusted market assessment approach. B) Expected cost plus margin approach. C) Residual Approach. D) None of above. Show Answer Correct Answer: B) Expected cost plus margin approach. 28. On the date of issuance of the grant of rights to the employees/executives of the company The accountant records the price of the option as the difference between the market price of the stock and the price at which the option was exercised. and debit in which of the following accounts? A) Surplus account from grant of rights (If rights are granted in return for past year's work). B) Deferred performance compensation account (If rights are granted in return for the current year's performance). C) Work performance compensation account (If rights are granted in return for past year's work). D) Retained earnings account (If rights are granted in return for past year's work). E) Deferred performance compensation account (If rights are granted in return for past year's work). Show Answer Correct Answer: D) Retained earnings account (If rights are granted in return for past year's work). 29. Provided that all or part of the PS dividend not paid in any year accumulates and must be paid in the future BEFORE any dividends can be paid to common shareholders A) Noncumulative PS. B) Participating PS. C) Cumulative PS. D) Nonparticipating PS. Show Answer Correct Answer: C) Cumulative PS. 30. It is an artificial being created by operation of law, having the rights of succession and the powers, attributes and properties expressly authorized by law or incident to its existence. A) Partnership. B) Cooperative. C) Corporation. D) Sole Proprietorship. Show Answer Correct Answer: C) Corporation. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesIntermediate Accounting Quiz 1Intermediate Accounting Quiz 2Intermediate Accounting Quiz 3Intermediate Accounting Quiz 4Intermediate Accounting Quiz 5Intermediate Accounting Quiz 6Intermediate Accounting Quiz 7Intermediate Accounting Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books