This quiz works best with JavaScript enabled. Home > Finance > Accounting > Intermediate Accounting > Intermediate Accounting – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Intermediate Accounting Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The process of buying asset in business operations is called ..... ? A) Investing Activities. B) Operating activities. C) Raising Capital. D) Financing Activities. Show Answer Correct Answer: A) Investing Activities. 2. A mining company declares a liquidating dividend. The journal entry for this dividend announcement on the debit side is A) Accumulated Depreciation. B) Accumulated Depletion. C) Share Premium. D) Retained Earnings. Show Answer Correct Answer: C) Share Premium. 3. Not subject to amortization A) Indefinite useful life. B) Finite useful life. Show Answer Correct Answer: A) Indefinite useful life. 4. What is the accounting treatment for Unearned Income when the goods or services have been enjoyed by consumers (revenue is earned)? A) Debit the Income account, and credit the Income Received in Advance. B) Debit Income Received in Advance, and credit the Income account. C) Debit cash, and credit Earnings Received in Advance. D) Debit Income Received in Advance, and credit Cash. Show Answer Correct Answer: B) Debit Income Received in Advance, and credit the Income account. 5. What is the estimated use the company expects to receive from the asset? A) Service life. B) Cost Allocation. C) Overhead Costs. D) None of above. Show Answer Correct Answer: A) Service life. 6. What inventory valuation method is used when the assumption is made that inventory valuation is based on the order in which it is received A) Weighted Average. B) FIFO. C) LIFO. D) Weighted Continue. Show Answer Correct Answer: B) FIFO. 7. The following are categories of Other Comprehensive Income, except..... A) Revaluation Surplus. B) Translation. C) Hedging. D) Impairment Loss. Show Answer Correct Answer: D) Impairment Loss. 8. Which of the following is not subject to amortization? A) Patents. B) Franchise agreements. C) Copyrights. D) Goodwill. Show Answer Correct Answer: D) Goodwill. 9. Performance Obligation:To facilitate a transaction between a principal and a customer A) Agent. B) Principal. Show Answer Correct Answer: A) Agent. 10. Roll Company had a balance Accounts Receivable of $ 180, 000, Allowance for Doubtful Accounts of $ 4, 000, Sales (all on credit) of $ 700, 000, and Sales return and allowances of $ 50, 000. What is the journal entry if Roll estimates bad debts at 5% of accounts receivable? A) Dr. Bad debt expense $ 9, 000Cr. Allowance for doubtful accounts $ 9, 000. B) Dr. Bad debt expense $ 9, 200Cr. Allowance for doubtful accounts $ 9, 200. C) Dr. Bad debt expense $ 5, 000Cr. Allowance for doubtful accounts $ 5, 000. D) Dr. Allowance for doubtful accounts $ 5, 000Cr. Bad debt expense $ 5, 000. E) None of the above. Show Answer Correct Answer: C) Dr. Bad debt expense $ 5, 000Cr. Allowance for doubtful accounts $ 5, 000. 11. What is an asset received in an exchange of nonmonetary assets that is generally valued at fair value? A) Donated Assets. B) Acquisitions. C) Goodwill. D) Exchanges. Show Answer Correct Answer: D) Exchanges. 12. On 1 Jan. 2020, Jing Jai Company Limited registered 100, 000 common shares with a value of 100 baht per share. 1 Feb. 20 issued 20, 000 common shares at a price based on value. 1 Mar. 20 issued 50, 000 common shares. At a price of 105 baht, which statement is correct regarding accounting recording? On the common stock issue date on March 1, 2020 A) Dr. Cash 5, 250, 000 Cr. Unsold common stock capital 5, 000, 000 Retained earnings 250, 000. B) Dr. Cash 5, 250, 000 Cr. Common share capital 5, 000, 000 Premium on common shares 250, 000. C) Dr. Cash 5, 250, 000 Cr. Unsold common stock capital 5, 250, 000. D) Dr. Cash 5, 250, 000 Cr. Common stock capital 5, 250, 000. E) Memorandum:Issued 50, 000 common shares with a value of 100 baht per share. Show Answer Correct Answer: B) Dr. Cash 5, 250, 000 Cr. Common share capital 5, 000, 000 Premium on common shares 250, 000. 13. On December 31, Year 1, Zilong Company had an overdue 10% note payable to Aldous Bank worth 8 million and an accrued interest of P 800, 000. On that date, Aldous Bank offered modification of terms of the liability as follows:> Principal is reduced by P 2 million and accrued interest is condoned> Maturity is extended to December 31, Year 5> The new interest rate of 12% is payable every December 31> PV of 1 at 10% for 4 periods is 0.683 and PV of 1 at 12% for 4 periods is 0.636> PV of an ordinary annuity of 1 at 10% for 4 period is 3.17 and PV of an ordinary annuity of 1 at 12% for 4 period is 3.037What amount of gain(loss) on extinguishment of debt shall be recognized for Year 1. A) 2, 797, 360 gain. B) 2, 797, 360 loss. C) 2, 419, 600 loss. D) 2, 419, 600 gain. Show Answer Correct Answer: C) 2, 419, 600 loss. 14. The accounting equation can be written as follows: A) Assets-liabilities-initial capital + withdrawals = profit. B) Assets-liabilities-withdrawals = initial capital + profit. C) Initial capital + profit-withdrawals-liabilities = assets. D) Assets + profit-withdrawals-liabilities = final capital. Show Answer Correct Answer: A) Assets-liabilities-initial capital + withdrawals = profit. 15. It encompasses the entire system of monitoring and control of money as it flows in and out of an organization as assets and liabilities, and revenues and expenses. A) Financial Accounting. B) Financial Information. C) Accounting. D) None of the choices. Show Answer Correct Answer: A) Financial Accounting. 16. Which of the following will likely be included in a Management's Discussion & Analysis report? A) An assessment of the company's internal control procedures. B) A detailed explanation of data contained in the financial statements (details on long-termdebt, leases, etc.). C) An opinion that the financials present fairly the financial position, results of operations, and cash flows in accordance with GAAP. D) All of the above. Show Answer Correct Answer: A) An assessment of the company's internal control procedures. 17. On Dec 31, 2018, Lopez Inc. has 1, 500 shares of 8%, $ 150 par value common stock outstanding. At Dec 31, 2018, the directors declare a $ 10, 000 cash dividend. What is the journal entry to record the declaration of dividend? A) Dr. Cash Dividends $ 10, 000Cr. Dividends Payable $ 10, 000. B) Dr. Dividends Payable $ 10, 000Cr. Cash $ 10, 000. C) Dr. Cash Dividends $ 10, 000Cr. Common Stock $ 10, 000. D) Dr. Dividends Payable $ 10, 000Cr. Common Stock $ 10, 000. Show Answer Correct Answer: A) Dr. Cash Dividends $ 10, 000Cr. Dividends Payable $ 10, 000. 18. What is the disposition of the old component and acquisition of the new component? A) Repair. B) Improvements. C) Substitution. D) Fix. Show Answer Correct Answer: C) Substitution. 19. Another term for a promissory note that has a predetermined interest rate is..... A) Interest-bearing money order. B) Notes receivable. C) Notes payable. D) Money orders do not bear interest. E) Money order interest. Show Answer Correct Answer: A) Interest-bearing money order. 20. Statement 1:A liability is a present obligation of entity to transfer an economic resource as a result of past event.Statement 2:An obligation is a duty or responsibility that the entity has no practical ability to avoid A) Both statements are false. B) Both statements are true. C) Statement 1 is true. D) Statement 2 is true. Show Answer Correct Answer: B) Both statements are true. 21. An entity's Equipment has a carrying amount ofP67, 460. An equipment costing P15, 000 had beensold for P4, 000, making a loss on disposal of P1, 250.No entries had been made for this disposal. What is the correct carrying amount of the entity's Equipment? A) P62, 210. B) P66, 210. C) P64, 710. D) Bukha, 460. Show Answer Correct Answer: A) P62, 210. 22. The accounting standard setting body in Indonesia is A) IAI. B) FASB. C) IFRS. D) DSAK. Show Answer Correct Answer: D) DSAK. 23. Which of the following describes a change in reporting entity? A) A company acquires a subsidiary that is to be accounted for as a purchase. B) A manufacturing company expands its market from regional to nationwide. C) A company divests itself of a European branch sales office. D) Changing the companies included in combined financial statements. Show Answer Correct Answer: D) Changing the companies included in combined financial statements. 24. Costs for supplies do not include..... A) Purchase price. B) Import duties and other taxes. C) Abnormal amounts of waste materials. D) Sales costs. Show Answer Correct Answer: D) Sales costs. 25. 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 next dividend payment is: A) 2.40. B) 1.92. C) 3.00. D) 0.60. Show Answer Correct Answer: A) 2.40. 26. Report more detailed information than is shown in the primary financial statements A) Parenthetical comments (modifying comments). B) Disclosure notes. C) Supplemental schedules and tables. D) None of above. Show Answer Correct Answer: C) Supplemental schedules and tables. 27. US National Bank agrees to lend $ 150, 000 on March 1, 2019, to Butter D Co. if Butter D signs a $ 150, 000, 8 percent, four-month note. If Butter D prepares financial statements semiannually, what is the adjusting entry to recognize interest expense and interest payable at June 30? A) Dr. Interest expense $ 12, 000Cr. Interest payable $ 12, 000. B) Dr. Interest payable $ 4, 000Cr. Interest expense $ 4, 000. C) Dr. Interest expense $ 4, 000Cr. Interest payable $ 4, 000. D) Dr. Interest payable $ 12, 000Cr. Interest expense $ 12, 000. E) None of these. Show Answer Correct Answer: C) Dr. Interest expense $ 4, 000Cr. Interest payable $ 4, 000. 28. What is the measurement of the equity instrument issued to extinguish a financial liability in an equity swap debt restructure? A) Par value of the equity instrument issued. B) Carrying amount of the financial liability extinguished. C) Fair value of the financial liability extinguished. D) Fair value of the equity instrument issued. Show Answer Correct Answer: D) Fair value of the equity instrument issued. 29. Involves cash flow that occur after either expense or revenue recognition.Includes Accrued Liabilities and Accrued Recievables A) Prepayments (Deferrals). B) Accruals. C) Estimates. D) None of above. Show Answer Correct Answer: B) Accruals. 30. Recording Revenue:Only the commission it receives on the transaction A) Principal. B) Agent. Show Answer Correct Answer: B) Agent. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books