Question 1

An example of a temporary account is

Accepted Answer

A) Unearned Revenue. 
B) Salary Expense. 
C) Inventory. 
D) Retained Earnings. 
A) Unearned Revenue. 
B) Salary Expense. 
C) Inventory. 
D) Retained Earnings.

Question 2

Yellow Corp.'s account balances at December 31, 2017 included Accounts Receivable, $720,000 debit; Allowance for Doubtful Accounts, $800 debit.Sales during 2017 were $1,840,000.It is estimated that 2% of sales will be uncollectible.The required adjusting entry would include a credit to the allowance account for

Accepted Answer

A) $28,800. 
B) $36,800. 
C) $14,400. 
D) $30,600. 
A) $28,800. 
B) $36,800. 
C) $14,400. 
D) $30,600.

Question 3

Use the following information for questions.
  
-The cash paid for insurance premiums during 2017 was

Accepted Answer

A) $ 9,100. 
B) $ 9,000. 
C) $10,700. 
D) $10,600. 
A) $ 9,100. 
B) $ 9,000. 
C) $10,700. 
D) $10,600.

Question 4

An adjusting entry for bad debts will generally

Accepted Answer

A) increase an expense account and decrease an asset account. 
B) increase an expense account and increase an asset account. 
C) increase an expense account and increase a contra-asset account. 
D) increase an expense account and increase a liability account. 
A) increase an expense account and decrease an asset account. 
B) increase an expense account and increase an asset account. 
C) increase an expense account and increase a contra-asset account. 
D) increase an expense account and increase a liability account.

Question 5

On December 1, 2017, Flynn Consulting paid $27,000 for a three-year insurance policy (December 1, 2017 to November 30, 2020)and debited the entire amount to Prepaid Insurance.The December 31, 2017 required adjusting entry in connection with this policy would be

Accepted Answer

A) debit Prepaid Insurance and credit Insurance Expense $750. 
B) debit Insurance Expense and credit Prepaid Insurance $750. 
C) debit Insurance Expense and credit Prepaid Insurance $26,250. 
D) debit Prepaid Insurance and credit Insurance Expense $26,250. 
A) debit Prepaid Insurance and credit Insurance Expense $750. 
B) debit Insurance Expense and credit Prepaid Insurance $750. 
C) debit Insurance Expense and credit Prepaid Insurance $26,250. 
D) debit Prepaid Insurance and credit Insurance Expense $26,250.

Question 6

On May 15, 2017, Grey Corp.purchased 1,000 common shares of Regal Bank for $32,000, as a Fair Value through Other Comprehensive Income (FV-OCI)equity investment.At December 31, 2017, the fair value of these shares was $35,400.The required adjusting entry to reflect this fact is

Accepted Answer

A) debit Fair value-OCI Investment, credit Holding Gain on Investment (OCI)$35,400. 
B) debit Holding Gain on Investment (OCI), credit Fair value-OCI Investment $35,400. 
C) debit Fair value-OCI Investment, credit Holding Gain on Investment (OCI)$3,400. 
D) debit Holding Loss on Investment (OCI), credit Fair value-OCI Investment $3,400. 
A) debit Fair value-OCI Investment, credit Holding Gain on Investment (OCI)$35,400. 
B) debit Holding Gain on Investment (OCI), credit Fair value-OCI Investment $35,400. 
C) debit Fair value-OCI Investment, credit Holding Gain on Investment (OCI)$3,400. 
D) debit Holding Loss on Investment (OCI), credit Fair value-OCI Investment $3,400.

Question 7

A post-closing trial balance

Accepted Answer

A) includes temporary accounts only. 
B) includes permanent accounts only. 
C) includes both temporary and permanent accounts. 
D) may include expense accounts. 
A) includes temporary accounts only. 
B) includes permanent accounts only. 
C) includes both temporary and permanent accounts. 
D) may include expense accounts.

Question 8

A fair value measure under IFRS 13 is based on which view of fair value?

Accepted Answer

A) market participant view 
B) shareholder view 
C) fair value view 
D) unbiased view 
A) market participant view 
B) shareholder view 
C) fair value view 
D) unbiased view

Question 9

The debit and credit analysis of a transaction normally takes place

Accepted Answer

A) before an entry is recorded in a journal. 
B) when the entry is posted to the ledger. 
C) when the trial balance is prepared. 
D) when the financial statements are prepared. 
A) before an entry is recorded in a journal. 
B) when the entry is posted to the ledger. 
C) when the trial balance is prepared. 
D) when the financial statements are prepared.

Question 10

On September 1, 2017, Black Corporation received $36,000 cash from a tenant for one year's rent in advance, and recorded the transaction with a credit to Rent Revenue.The December 31, 2017 required adjusting entry in connection with this would be

Accepted Answer

A) debit Rent Revenue and credit Unearned Rent, $12,000. 
B) debit Rent Revenue and credit Unearned Rent, $24,000. 
C) debit Unearned Rent and credit Rent Revenue, $12,000. 
D) debit Cash and credit Unearned Rent, $6,000. 
A) debit Rent Revenue and credit Unearned Rent, $12,000. 
B) debit Rent Revenue and credit Unearned Rent, $24,000. 
C) debit Unearned Rent and credit Rent Revenue, $12,000. 
D) debit Cash and credit Unearned Rent, $6,000.

Question 11

An accrued revenue can best be described as an amount

Accepted Answer

A) collected and currently matched with expenses. 
B) collected and not currently matched with expenses. 
C) not collected and currently matched with expenses. 
A) collected and currently matched with expenses. 
B) collected and not currently matched with expenses. 
C) not collected and currently matched with expenses.

Question 12

Amazing Company acquires a trade name from Fantastic Ltd.Amazing estimates it will receive $7,200 per year from the name over the next 9 years.Using a discount rate of 4%, what is the value in use to Amazing of this trade name?

Accepted Answer

A) $45,528 
B) $58,398 
C) $53,534 
D) $55,676 
A) $45,528 
B) $58,398 
C) $53,534 
D) $55,676

Question 13

Barkley Company will receive $400,000 in a future year.If the future receipt is discounted at an interest rate of 8%, its present value is $252,068.In how many years is the $400,000 received?

Accepted Answer

A) 5 years 
B) 6 years 
C) 7 years 
D) 8 years 
A) 5 years 
B) 6 years 
C) 7 years 
D) 8 years

Question 14

Which of the following statements about the trial balance is correct?

Accepted Answer

A) The debits and credits must balance. 
B) The equality of credits and debits ensures that no errors were made. 
C) The post-closing trial balance includes temporary accounts only. 
D) The post-closing trial balance is used to prepare the financial statements. 
A) The debits and credits must balance. 
B) The equality of credits and debits ensures that no errors were made. 
C) The post-closing trial balance includes temporary accounts only. 
D) The post-closing trial balance is used to prepare the financial statements.

Question 15

Use the following information for questions.
  
-The salary expense on the 2017 statement of comprehensive income was

Accepted Answer

A) $118,400. 
B) $133,100. 
C) $131,300. 
D) $116,600. 
A) $118,400. 
B) $133,100. 
C) $131,300. 
D) $116,600.

Question 16

The type of account and normal balance of "Accumulated Depreciation, Equipment" is

Accepted Answer

A) Asset, Credit. 
B) Contra-asset, Credit. 
C) Contra-asset, Debit. 
D) Liability, Credit. 
A) Asset, Credit. 
B) Contra-asset, Credit. 
C) Contra-asset, Debit. 
D) Liability, Credit.

Question 17

Which of the following statements is true regarding accounting information systems?

Accepted Answer

A) Both large and small firms should use the same type of accounting system. 
B) All firms should have the same types of transactions. 
C) The volume of data to be handled should not vary between firms. 
D) The kind of information that management requires of an accounting system will vary, depending on the type of firm. 
A) Both large and small firms should use the same type of accounting system. 
B) All firms should have the same types of transactions. 
C) The volume of data to be handled should not vary between firms. 
D) The kind of information that management requires of an accounting system will vary, depending on the type of firm.

Question 18

The accounting equation must remain in balance

Accepted Answer

A) throughout each step in the accounting cycle. 
B) only when journal entries are recorded. 
C) only at the time the trial balance is prepared. 
D) only when formal financial statements are prepared. 
A) throughout each step in the accounting cycle. 
B) only when journal entries are recorded. 
C) only at the time the trial balance is prepared. 
D) only when formal financial statements are prepared.

Question 19

Frog Corporation had revenues of $300,000, expenses of $200,000, and dividends of $45,000.When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a

Accepted Answer

A) debit of $55,000. 
B) debit of $100,000. 
C) credit of $55,000. 
D) credit of $100,000. 
A) debit of $55,000. 
B) debit of $100,000. 
C) credit of $55,000. 
D) credit of $100,000.

Question 20

A trial balance

Accepted Answer

A) is a list of all the accounts in the ledger. 
B) is a list of all the accounts and their balances at a specific date. 
C) cannot be used in the preparation of financial statements. 
D) cannot be used as a basis for preparation of adjusting entries. 
A) is a list of all the accounts in the ledger. 
B) is a list of all the accounts and their balances at a specific date. 
C) cannot be used in the preparation of financial statements. 
D) cannot be used as a basis for preparation of adjusting entries.

Exam 3: The Accounting Information System and Measurement Issues

An example of a temporary account is

Use the following information for questions. -The cash paid for insurance premiums during 2017 was

An adjusting entry for bad debts will generally

On December 1, 2017, Flynn Consulting paid $27,000 for a three-year insurance policy (December 1, 2017 to November 30, 2020)and debited the entire amount to Prepaid Insurance.The December 31, 2017 required adjusting entry in connection with this policy would be

On May 15, 2017, Grey Corp.purchased 1,000 common shares of Regal Bank for $32,000, as a Fair Value through Other Comprehensive Income (FV-OCI)equity investment.At December 31, 2017, the fair value of these shares was $35,400.The required adjusting entry to reflect this fact is

A post-closing trial balance

A fair value measure under IFRS 13 is based on which view of fair value?

The debit and credit analysis of a transaction normally takes place

On September 1, 2017, Black Corporation received $36,000 cash from a tenant for one year's rent in advance, and recorded the transaction with a credit to Rent Revenue.The December 31, 2017 required adjusting entry in connection with this would be

An accrued revenue can best be described as an amount

Amazing Company acquires a trade name from Fantastic Ltd.Amazing estimates it will receive $7,200 per year from the name over the next 9 years.Using a discount rate of 4%, what is the value in use to Amazing of this trade name?

Barkley Company will receive $400,000 in a future year.If the future receipt is discounted at an interest rate of 8%, its present value is $252,068.In how many years is the $400,000 received?

Which of the following statements about the trial balance is correct?

Use the following information for questions. -The salary expense on the 2017 statement of comprehensive income was

The type of account and normal balance of "Accumulated Depreciation, Equipment" is

Which of the following statements is true regarding accounting information systems?

The accounting equation must remain in balance

Frog Corporation had revenues of $300,000, expenses of $200,000, and dividends of $45,000.When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a

A trial balance

The Canadian Financial Reporting Environment

Conceptual Framework Underlying Financial Reporting

Reporting Financial Performance

Financial Position and Cash Flows

Revenue Recognition

Cash and Receivables

Inventory

Investments

Property, Plant, and Equipment: Accounting Model Basics

Depreciation, Impairment, and Disposition

Intangible Assets and Goodwill

Non-Financial Andcurrent Liabilities

Long-Term Financial Liabilities

Shareholders Equity

Complex Financial Instruments

Earnings Per Share

Income Taxes

Pensions and Other Employee Future Benefits

Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Other Measurement and Disclosure Issues

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