Question 1

Explain the meaning of the following terms: current assets, trade payables, expected value, deferred revenue and warranty.

Accepted Answer

Current assets: Assets that are expected

Question 2

List three characteristics of a franchise arrangement.

Accepted Answer

A franchise arrangement is one in which:

Question 3

Which of the following characteristic is required for a liability under IFRS Framework?

Accepted Answer

A) A past obligation. 
B) A present obligation. 
C) An unknown obligation. 
D) A future obligation. 
A) A past obligation. 
B) A present obligation. 
C) An unknown obligation. 
D) A future obligation.

Question 4

What are "liabilities"? Differentiate between financial liabilities and non-financial liabilities.

Accepted Answer

• Liabilities are present obligations of

Question 5

List three reasons why the recording of sales taxes is not straightforward.

Accepted Answer

1. Some products are exempt from PST and

Question 6

For the following transaction, provide all of the required journal entries from inception to liquidation. Assume a December 31 year-end and that the company does not prepare interim statements. Round all amounts to nearest dollar. $$\begin{array} { l r } 
\text { Face value of note payable } & \$ 200,000 \
\text { Date of issue for note } & \text { March } 1,2019 \
\text { Due date for note } & \text { March } 1,2020 \
\text { Interest rate in the note } & 0 \% \
\text { Market rate of interest } & 5 \% \
\text { Consideration received } & \text { Machinery }
\end{array}$$

Accepted Answer

The answer of For the following transaction, provide all of...

Question 7

Which statement is correct?

Accepted Answer

A) Trade payables are supported by a written promise to pay. 
B) Trade payables with no discount terms are expected to be paid in full. 
C) Notes payable are legally enforceable and can only be interest bearing. 
D) Notes payables are recognized at the face value or transaction price. 
A) Trade payables are supported by a written promise to pay. 
B) Trade payables with no discount terms are expected to be paid in full. 
C) Notes payable are legally enforceable and can only be interest bearing. 
D) Notes payables are recognized at the face value or transaction price.

Question 8

A company purchases inventory on credit for $80,000. Inventory costing $30,000 is sold on credit for $40,000. The applicable HST rate is 10%. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Accepted Answer

The answer of A company purchases inventory on credit for...

Question 9

Which statement about warranties is correct?

Accepted Answer

A) Warranties sold separately are accounted for under IFRS7. 
B) Warranties sold separately are accounted for under IFRS15. 
C) Warranties are financial liabilities and accounted for at fair value. 
D) Expected value uses a weighted average of possible outcomes. 
A) Warranties sold separately are accounted for under IFRS7. 
B) Warranties sold separately are accounted for under IFRS15. 
C) Warranties are financial liabilities and accounted for at fair value. 
D) Expected value uses a weighted average of possible outcomes.

Question 10

A company, using a perpetual inventory system, sells goods on credit for $10,000. The applicable HST rate is 10%. The cost of goods sold was $6,000. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Accepted Answer

The answer of A company, using a perpetual inventory system,...

Question 11

Which statement is correct about provisions, contingent assets and contingent liabilities?

Accepted Answer

A) Provisions are recorded in the financial statements whereas contingent assets are not recorded. 
B) Provisions are recorded in the financial statements whereas contingent liabilities are not recorded. 
C) Probable contingent liabilities are recorded at management's best estimates. 
D) Probable contingent assets are recorded at management's best estimates. 
A) Provisions are recorded in the financial statements whereas contingent assets are not recorded. 
B) Provisions are recorded in the financial statements whereas contingent liabilities are not recorded. 
C) Probable contingent liabilities are recorded at management's best estimates. 
D) Probable contingent assets are recorded at management's best estimates.

Question 12

Which statement about contingent liabilities is correct?

Accepted Answer

A) It is a possible obligation that arises from past transactions and events. 
B) It is an obligation that arises from past transactions and events. 
C) It involves uncertainty about either the timing or amount of payment. 
D) It is a condition that depends upon the outcome of an anticipated event. 
A) It is a possible obligation that arises from past transactions and events. 
B) It is an obligation that arises from past transactions and events. 
C) It involves uncertainty about either the timing or amount of payment. 
D) It is a condition that depends upon the outcome of an anticipated event.

Question 13

Which statement about deferred revenue is correct?

Accepted Answer

A) Deferred revenue is always a non-current liability. 
B) Deferred revenue could arise from loyalty programs. 
C) Deferred revenue is measured using expected values. 
D) Deferred revenue arises when the goods are shipped. 
A) Deferred revenue is always a non-current liability. 
B) Deferred revenue could arise from loyalty programs. 
C) Deferred revenue is measured using expected values. 
D) Deferred revenue arises when the goods are shipped.

Question 14

Explain what contingent assets and liabilities are and how these items are accounted for financial reporting purposes.

Accepted Answer

A contingent liability is:
- a possible

Question 15

Why are taxes payable not classified as financial liabilities?

Accepted Answer

The obligations to pay taxes a

Question 16

Sales made in fiscal 2019 for $50,000,000 include a 5 year warranty coverage. The estimated cost for warranty is expected to be 2% for the first 4 years and 5% for the last year. Determine how much warranty expense will be recorded in fiscal 2019.

Accepted Answer

A) 1,000,000 
B) 4,000,000 
C) 5,000,000 
D) 6,500,000 
A) 1,000,000 
B) 4,000,000 
C) 5,000,000 
D) 6,500,000

Question 17

Explain how commitments and guarantees are accounted for under accrual accounting.

Accepted Answer

Contractual commitments pertaining to th

Question 18

Which is not an example of a financial liability?

Accepted Answer

A) Payment to supplier for raw material received. 
B) Obligation to repay a US dollar bank loan. 
C) Obligation under a finance lease. 
D) Obligation under a customer loyalty program. 
A) Payment to supplier for raw material received. 
B) Obligation to repay a US dollar bank loan. 
C) Obligation under a finance lease. 
D) Obligation under a customer loyalty program.

Question 19

Which of the following is correct about a "liability" under IFRS Framework?

Accepted Answer

A) A future obligation arising from past events, the settlement of which is expected to result in an inflow of resources. 
B) A present obligation arising from past events, the settlement of which is expected to result in an inflow of resources. 
C) A past obligation arising from past events, the settlement of which is expected to result in an outflow of resources. 
D) A present obligation arising from past events, the settlement of which is expected to result in an outflow of resources. 
A) A future obligation arising from past events, the settlement of which is expected to result in an inflow of resources. 
B) A present obligation arising from past events, the settlement of which is expected to result in an inflow of resources. 
C) A past obligation arising from past events, the settlement of which is expected to result in an outflow of resources. 
D) A present obligation arising from past events, the settlement of which is expected to result in an outflow of resources.

Question 20

A company, using a perpetual inventory system, sells goods on credit for $10,000. The applicable PST rate is 5% and the GST rate is 10%. The cost of goods sold was $6,000. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Accepted Answer

The answer of A company, using a perpetual inventory system,...

Explain the meaning of the following terms: current assets, trade payables, expected value, deferred revenue and warranty.

List three characteristics of a franchise arrangement.

Which of the following characteristic is required for a liability under IFRS Framework?

What are "liabilities"? Differentiate between financial liabilities and non-financial liabilities.

List three reasons why the recording of sales taxes is not straightforward.

Which statement is correct?

A company purchases inventory on credit for $80,000. Inventory costing $30,000 is sold on credit for $40,000. The applicable HST rate is 10%. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Which statement about warranties is correct?

A company, using a perpetual inventory system, sells goods on credit for $10,000. The applicable HST rate is 10%. The cost of goods sold was $6,000. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Which statement is correct about provisions, contingent assets and contingent liabilities?

Which statement about contingent liabilities is correct?

Which statement about deferred revenue is correct?

Explain what contingent assets and liabilities are and how these items are accounted for financial reporting purposes.

Why are taxes payable not classified as financial liabilities?

Sales made in fiscal 2019 for $50,000,000 include a 5 year warranty coverage. The estimated cost for warranty is expected to be 2% for the first 4 years and 5% for the last year. Determine how much warranty expense will be recorded in fiscal 2019.

Explain how commitments and guarantees are accounted for under accrual accounting.

Which is not an example of a financial liability?

Which of the following is correct about a "liability" under IFRS Framework?

A company, using a perpetual inventory system, sells goods on credit for $10,000. The applicable PST rate is 5% and the GST rate is 10%. The cost of goods sold was $6,000. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Accounting for Income Taxes

Accounting Changes

Statement of Cash Flows

Filters

Exam 1: Current Liabilities and Contingencies

Explain the meaning of the following terms: current assets, trade payables, expected value, deferred revenue and warranty.

List three characteristics of a franchise arrangement.

Which of the following characteristic is required for a liability under IFRS Framework?

What are "liabilities"? Differentiate between financial liabilities and non-financial liabilities.

List three reasons why the recording of sales taxes is not straightforward.

Which statement is correct?

A company purchases inventory on credit for $80,000. Inventory costing $30,000 is sold on credit for $40,000. The applicable HST rate is 10%. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Which statement about warranties is correct?

A company, using a perpetual inventory system, sells goods on credit for $10,000. The applicable HST rate is 10%. The cost of goods sold was $6,000. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Which statement is correct about provisions, contingent assets and contingent liabilities?

Which statement about contingent liabilities is correct?

Which statement about deferred revenue is correct?

Explain what contingent assets and liabilities are and how these items are accounted for financial reporting purposes.

Why are taxes payable not classified as financial liabilities?

Sales made in fiscal 2019 for $50,000,000 include a 5 year warranty coverage. The estimated cost for warranty is expected to be 2% for the first 4 years and 5% for the last year. Determine how much warranty expense will be recorded in fiscal 2019.

Explain how commitments and guarantees are accounted for under accrual accounting.

Which is not an example of a financial liability?

Which of the following is correct about a "liability" under IFRS Framework?

A company, using a perpetual inventory system, sells goods on credit for $10,000. The applicable PST rate is 5% and the GST rate is 10%. The cost of goods sold was $6,000. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction.

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Accounting for Income Taxes

Accounting Changes

Statement of Cash Flows

Filters