This quiz works best with JavaScript enabled. Home > Finance > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Securities that are in market demand in which the business invests with uncertain objectives What type of securities will they be classified as? A) Securities available for sale. B) Debt instruments due within 1 year. C) General investments. D) Securities for trading. Show Answer Correct Answer: C) General investments. 2. The following costs may all be included in the costs of acquiring fixed assets, except: A) Costs of site preparation. B) Costs of testing whether the assets is functioning properly. C) Installation and assembly costs. D) Administration and general overhead costs. Show Answer Correct Answer: D) Administration and general overhead costs. 3. An unclean opinion A) Adverse or disclaimer. B) Unqualified. C) Unqualified with an explanation or emphasis paragraph. D) Qualified. E) Rejected. Show Answer Correct Answer: D) Qualified. 4. Revenue is recognized by the consignor when the: A) Consignor receives an advance from the consignee. B) Consignee receives the goods. C) Goods are shipped to the consignee. D) Consignor receives an advance from the consignee. Show Answer Correct Answer: A) Consignor receives an advance from the consignee. 5. Amazon Inc. Giant Inc. acquires the customer list of a large newspaper for $ 8, 000, 000 on January 1, 2016. Giant Inc. expects to benefit from the information evenly over a four-year period. What is the journal entry to record the customer list? A) Dr. Cash $ 8, 000, 000Cr. Customer List $ 8, 000, 000. B) Dr. Customer List $ 8, 000, 000Cr. Cash $ 8, 000, 000. C) Dr. Customer List $ 2, 000, 000Cr. Account Payable $ 2, 000, 000. D) Dr. Customer List $ 8, 000, 000Cr. Account Payable $ 8, 000, 000. E) Dr. Customer List $ 2, 000, 000Cr. Cash $ 2, 000, 000. Show Answer Correct Answer: B) Dr. Customer List $ 8, 000, 000Cr. Cash $ 8, 000, 000. 6. The following figures relate to inventory held at theend of the reporting period:Cost of materials P100, 000Net realizable value of materials 90, 000Estimated costs to convert materialsinto finished goods 50, 000Estimated selling price of finished goods 160, 000Estimated costs to sell 5, 000 The entity should recognize loss on write-down ofinventory of materials of A) P5, 000. B) P15, 000. C) P10, 000. D) Nil. Show Answer Correct Answer: D) Nil. 7. PT Royal purchased a jet aircraft for use by the entity's top management. The acquisition price of the jet aircraft was IDR 1 billion. The jet aircraft is estimated to be used for 7 years, however there are main components of the jet aircraft which have different useful lives as follows:the engine has a useful life of 5 years and the aircraft tires will be replaced every 2 years. The jet aircraft will be depreciated using the straight line method over..... A) 7 years of benefit period. B) 2 years useful life for reasons of conservatism. C) 5 years useful life for the engine, 2 years useful life for tires, and 7 years for the remaining purchase price. D) 5 years of benefit time which is the average benefit time. Show Answer Correct Answer: D) 5 years of benefit time which is the average benefit time. 8. What is capitalized and then allocated as depreciation? A) Overhead Allocation. B) Interest Capitalization. C) Constructed Assets. D) Patent. Show Answer Correct Answer: B) Interest Capitalization. 9. Dividends not paid during a year do not accumulate to PS shareholders A) Cumulative PS. B) Participating PS. C) Noncumulative PS. D) Nonparticipating PS. Show Answer Correct Answer: C) Noncumulative PS. 10. What is the collection of depreciable assets that are physically dissimilar but are aggravated anyway to gain the convenience of a collective depreciation calculation? A) Composite Depreciation Method. B) Group Depreciation Method. Show Answer Correct Answer: A) Composite Depreciation Method. 11. Part of the process of preparing a cash flow statement is calculating cash flows from operating activities. Which of the following statements is incorrect regarding the use of the indirect method: A) 1, 2, 4. B) 2, 3, 4. C) 1, 3, 4. D) 1, 2, 3. Show Answer Correct Answer: B) 2, 3, 4. 12. Inventory is part of the asset classification. The incorrect definition is: A) Used in the production or supply of goods and services for administrative purposes. B) For sale in the normal course of business. C) In the production process for the sale. D) In the form of materials or equipment to be consumed in the production/service process. Show Answer Correct Answer: A) Used in the production or supply of goods and services for administrative purposes. 13. Purchase equipment in cash. The consequences of the transaction and its effect on the account..... A) Assets (equipment) decrease and assets (cash) increase. B) Assets (equipment) increase and Assets (cash) increase. C) Assets (equipment) increase and assets (cash) decrease. D) Assets (equipment) are reduced and assets (cash) are reduced. Show Answer Correct Answer: C) Assets (equipment) increase and assets (cash) decrease. 14. Resources controlled by an entity as a result of the past and which are expected to have economic benefits flowing to the entity in the future are called..... A) Asset. B) Equity. C) Income. D) Debt. Show Answer Correct Answer: A) Asset. 15. The element or elements related to the residual interest in the company's assets after deducting liabilities are..... A) Burden. B) Equity. C) Income. D) Asset. Show Answer Correct Answer: B) Equity. 16. Companies IPO because ..... A) All of the mentioned reasons. B) It allows original shareholders to exit. C) They want to raise funds. D) It allows employees to enjoy the company's success. Show Answer Correct Answer: A) All of the mentioned reasons. 17. Company X currently has book value per share of THB 20 and cost of equity of 12%. If its ROE is 15% and dividend payout ratio is 80%, its sustainable growth rate is: A) 9.6%. B) 12%. C) 3%. D) 2.4%. Show Answer Correct Answer: C) 3%. 18. Which of the following is a key provision of the Sarbanes-Oxley Act? A) Hiring of executive officers. B) Tax advisory services. C) Investment consulting. D) Hiring of the audit firm. Show Answer Correct Answer: D) Hiring of the audit firm. 19. Represents cash received from a customer for goods or services to be provided in a future period A) Accrued Liabilities. B) Deferred Revenue. Show Answer Correct Answer: B) Deferred Revenue. 20. Refers to the process of admitting information into the financial statements A) Recognition. B) Measurement. C) Disclosure. D) None of above. Show Answer Correct Answer: A) Recognition. 21. Assumes inventory cost is a mix of all goods available for sale. Average us weighted by number of units. A) Average Cost. B) FIFO (First In, First Out). C) LIFO (Last in, First Out). D) Specific Identification method. Show Answer Correct Answer: A) Average Cost. 22. Which of the following is not an accurate representation concerning revenue recognition? A) Revenue from selling products is recognized at the date of sale, usually interpreted to mean the date of delivery to customers. B) Revenue from services rendered is recognized when cash is received or when services have been performed. C) Revenue from permitting others to use enterprise assets is recognized as time passes or as the assets are used. D) Revenue from disposing of assets other than products is recognized at the date of sale. Show Answer Correct Answer: B) Revenue from services rendered is recognized when cash is received or when services have been performed. 23. Recognizes revenue when it is earned and expenses when they are incurred A) Cash Basis. B) Accrual Basis. Show Answer Correct Answer: B) Accrual Basis. 24. Maximum number of shares a company may legally issue A) Authorized Shares. B) Issued Shares. C) Outstanding Shares. D) None of above. Show Answer Correct Answer: A) Authorized Shares. 25. On September 1, Harry purchased $ 13, 300 of inventory items on credit with the terms 1/15, net 30, FOB destination. Freight charges were $ 280. Payment for the purchase was made on September 18. Assuming Harry uses the perpetual inventory system and the net method of accounting for purchase discounts, what amount is recorded as inventory from this purchase? A) $ 13, 167. B) $ 13, 447. C) $ 13, 580. D) $ 13, 300. E) None of these. Show Answer Correct Answer: A) $ 13, 167. 26. PT Banjar purchased a machine in 2012 with an allocated acquisition price of IDR 9.2 billion for the machine body and IDR 1.2 billion for the motor components. In 2015, the motor components of the machine were replaced with a new motor at a cost of IDR 2.2 billion. At the time of replacement, the accumulated depreciation of the machine body was IDR 3.5 billion and the accumulated depreciation of the motor was IDR 800 million. How much value should be derecognized on the replacement date? A) IDR 1.2 billion. B) IDR 2.2 billion. C) Nol. D) IDR 400 million. Show Answer Correct Answer: D) IDR 400 million. 27. Mention the activities in the cash flow statement. A) Operating Activities, Investments and Expenditures. B) Investment Activities, Funding and Expenditures. C) Operational, Investment and Funding Activities. D) Investment, Funding and Financing activities. Show Answer Correct Answer: C) Operational, Investment and Funding Activities. 28. There are two methods for recording accounts regarding capital shares returned: A) Cost method and Value method. B) Cost method and fair value method. C) Cost method and market price method. D) Cost method and book value method. E) Value price method and fair value method. Show Answer Correct Answer: A) Cost method and Value method. 29. Faithful representation bermakna bahwa A) The numbers and their descriptions show what actually exists or happened. B) Manage the Company honestly and fairly. C) Generate maximum profit. D) Covering the company's losses last year. Show Answer Correct Answer: A) The numbers and their descriptions show what actually exists or happened. 30. It is a type of Partners wherein it contributes money, property and belongings. A) Limited Partner. B) Capitalist Partner. C) General Partner. D) Industrial Partner. Show Answer Correct Answer: B) Capitalist Partner. ← 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 8Intermediate Accounting Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books