This quiz works best with JavaScript enabled. Home > Finance > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. IAS No. 2 does not permit the use of LIFO A) IRFS. B) U.S. GAAP. Show Answer Correct Answer: A) IRFS. 2. Which of the following is not a consideration of current liability? A) The entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. B) The liability is due to be settled within 12 months before the reporting period. C) The entity expects to settle the liability within the entity's operating cycle. D) The entity holds the liability primarily for the purpose of trading. Show Answer Correct Answer: B) The liability is due to be settled within 12 months before the reporting period. 3. Land in the statement of financial position can be depreciated over 20 years. This statement..... A) Correct. B) Salah. Show Answer Correct Answer: B) Salah. 4. = NRVMarket should not be greater than the NRV A) Floor. B) Ceiling. Show Answer Correct Answer: B) Ceiling. 5. Purchased laundry equipment from the Bahtera Jaya shop on credit. The transaction analysis is ..... A) Assets increased, namely laundry equipment; debt increases. B) Assets increased, namely laundry equipment; debt is reduced. C) Assets increased, namely laundry equipment; cash is reduced. D) Salon equipment increases and laundry equipment loads increase. Show Answer Correct Answer: A) Assets increased, namely laundry equipment; debt increases. 6. Notes receivable with a nominal value of IDR 50, 000, 000.00, interest rate 12% per year, issued on December 1 2006 and due on January 30 2007, the maturity value is: A) Rp 50.000.000, 00. B) Rp 51.000.000, 00. C) Rp 56.000.000, 00. D) Rp 44.000.000, 00. Show Answer Correct Answer: B) Rp 51.000.000, 00. 7. Occurs when cash precede either expense or revenue expectations.Includes Prepaid Expense and Deferred Revenue A) Prepayments (Deferrals). B) Accruals. C) Estimates. D) None of above. Show Answer Correct Answer: A) Prepayments (Deferrals). 8. Which of the following refers to current assets? A) Long term investment. B) Expenses for setting up a company. C) Vehicle. D) Marketable securities. Show Answer Correct Answer: D) Marketable securities. 9. Best type of auditor report (nothing wrong) A) Unqualified with an explanation or emphasis paragraph. B) Unqualified. C) Adverse or disclaimer. D) Rejected. E) Qualified. Show Answer Correct Answer: B) Unqualified. 10. What occurs when small companies incorporate and the owner contributes assets to new corporation in exchange for ownership securities? A) Issuance of Equity Securities. B) Lump-Sum Purchases. C) Goodwill. D) Noncash Acquisitions. Show Answer Correct Answer: A) Issuance of Equity Securities. 11. When a bond is repaid by handing over assets where the fair value of the asset is less than the carrying value of the bond, the debtor will recognize A) No gain or loss on the repayment. B) There is no right answer. C) Loss on the repayment. D) Gain on the repayment. Show Answer Correct Answer: D) Gain on the repayment. 12. Amount of discount given at the time of reissue of shares should be debited to: A) Shares Capital. B) Discount on Shares. C) Share Forfeiture A/c. D) Calls-In-Areas A/c. Show Answer Correct Answer: C) Share Forfeiture A/c. 13. It is the activity of Traders as a broad category of product and services. A) Selling People's Time. B) Buying and Selling Products. C) Designing products, aggregating components and assembling finished products. D) Growing and Extracting Raw Materials. Show Answer Correct Answer: B) Buying and Selling Products. 14. Written promises to pay cash at some future date A) Notes Payable. B) Accounts Payable. Show Answer Correct Answer: A) Notes Payable. 15. The closing inventory of Tigreal Corp. amounted toP116, 400 excluding the following:* 400 items which had cost P4 each. All were soldafter the reporting period for P3 each, withselling expenses of P200 for the batch. * 200 different items which had cost P30 each.These items were found to be defective at theend of the reporting period. Rectification workafter the statement of financial position dateamounted to P1, 200, after which they were soldfor P35 each, with selling expenses totalingP300. Which of the following total figures should appear inthe statement of financial position of Tigreal Corp. forinventory? A) For 122, 900. B) For 123, 600. C) For 123, 400. D) For 123, 100. Show Answer Correct Answer: A) For 122, 900. 16. The best guess of a company's long-term growth rate is ..... A) Historical average of dividend growth rate. B) Long-term economic growth rate. C) Industry's profitability. D) The company's payout policy. Show Answer Correct Answer: B) Long-term economic growth rate. 17. Michael Corporation has a machine costing P480, 000, with an annual depreciation of P96, 000, and hasaccumulated depreciation of P240, 000 on December31, 2019. On April 1, 2020, when the machine has afair value of P192, 000, it is exchanged for a similarmachine with a fair value of P576, 000 and the properamount of cash is paid. The loss to be recognized on exchange is A) For 168, 000. B) P48, 000. C) P 0. D) P24, 000. Show Answer Correct Answer: D) P24, 000. 18. Prepare an unadjusted trial balance, record adjusting entries and post to general ledger accounts, prepare an adjusted trial balance, prepare financial statements A) During the Accounting Period. B) At the end of the Accounting Period. C) At the end of the year. D) None of above. Show Answer Correct Answer: B) At the end of the Accounting Period. 19. How many methods are there to measure value? A) 2. B) 1. C) 4. D) 3. Show Answer Correct Answer: C) 4. 20. 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 $ 20, 000Dr. Accumulated Depreciation-Equipment $ 6, 000Dr. Loss on Disposal of Equipment $ 2, 000Cr. Equipment $ 16, 000Cr. Cash $ 12, 000. B) Dr. Equipment $ 20, 000Dr. Accumulated Depreciation-Equipment $ 6, 000Cr. Equipment $ 16, 000Cr. Cash $ 10, 000. C) Dr. Equipment $ 17, 000Dr. Loss on Disposal of Equipment $ 2, 000Cr. Equipment $ 16, 000Cr. Cash $ 3, 000. D) Dr. Equipment $ 17, 000Dr. Accumulated Depreciation-Equipment $ 6, 000Cr. Equipment $ 16, 000Cr. Cash $ 7, 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. 21. 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. 22. 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; £30, 066. B) £7, 216; £11, 275. C) £8, 400; £13, 125. D) £1, 750; £8, 750. Show Answer Correct Answer: B) £7, 216; £11, 275. 23. 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. 24. 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) Rp600, 000. B) Rp570.000. C) Rp1.200.000. D) Rp1.140.000. Show Answer Correct Answer: B) Rp570.000. 25. 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. 26. Represents the basic financial position elements (Assets, Liabilities, and Stockholders' Equity) A) Permanent Accounts. B) Temporary Accounts. Show Answer Correct Answer: A) Permanent Accounts. 27. 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. 28. Amounts earned by the corporation on behalf of its shareholders A) Retained Earnings. B) Paid in Capital. Show Answer Correct Answer: A) Retained Earnings. 29. 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. 30. 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. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesIntermediate Accounting Quiz 1Intermediate Accounting Quiz 2Intermediate Accounting Quiz 3Intermediate Accounting Quiz 4Intermediate Accounting Quiz 6Intermediate Accounting Quiz 7Intermediate Accounting Quiz 8Intermediate Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books