Question 1

Accounting policies include each of the following except

Accepted Answer

A) principles. 
B) conventions. 
C) rules. 
D) All of these answers are included. 
A) principles. 
B) conventions. 
C) rules. 
D) All of these answers are included.

Question 2

Sauder Corporation reports the following information:   Sauder should report cash provided by operating activities of

Accepted Answer

A) HK$450,000. 
B) HK$630,000. 
C) HK$870,000. 
D) HK$1,050,000. 
A) HK$450,000. 
B) HK$630,000. 
C) HK$870,000. 
D) HK$1,050,000.

Question 3

The accounting profession has recommended that companies use the word reserve only to describe amounts deducted from assets.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following should be excluded from long-term liabilities?

Accepted Answer

A) Obligations payable at some date beyond the operating cycle 
B) Most pension obligations 
C) Non-current liabilities that mature within the operating cycle and will be paid from a sinking fund 
D) None of these choices are correct. 
A) Obligations payable at some date beyond the operating cycle 
B) Most pension obligations 
C) Non-current liabilities that mature within the operating cycle and will be paid from a sinking fund 
D) None of these choices are correct.

Question 5

Companies frequently describe the terms of all long-term liability agreements in notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 6

Financial flexibility measures the ability of an enterprise to take effective actions to alter the amounts and timing of cash flows.

Accepted Answer

A) True 
 B)False

Question 7

The statement of financial position contributes to financial reporting by providing a basis for all of the following except

Accepted Answer

A) computing rates of return. 
B) evaluating the capital structure of the enterprise. 
C) determining the increase in cash due to operations. 
D) assessing the liquidity and financial flexibility of the enterprise. 
A) computing rates of return. 
B) evaluating the capital structure of the enterprise. 
C) determining the increase in cash due to operations. 
D) assessing the liquidity and financial flexibility of the enterprise.

Question 8

Which of the following statement of financial position classifications would normally require the greatest amount of supplementary disclosure?

Accepted Answer

A) Current assets 
B) Current liabilities 
C) Plant assets 
D) Long-term liabilities 
A) Current assets 
B) Current liabilities 
C) Plant assets 
D) Long-term liabilities

Question 9

Within the statement of financial position where should the account non-controlling interest (minority interest) be reported?

Accepted Answer

A) Non-current assets. 
B) Non-current liabilities. 
C) Equity. 
D) Current liabilities. 
A) Non-current assets. 
B) Non-current liabilities. 
C) Equity. 
D) Current liabilities.

Question 10

Equity or debt securities held to finance future construction of additional plants should be classified on a balance sheet as

Accepted Answer

A) current assets. 
B) property, plant, and equipment. 
C) intangible assets. 
D) long-term investments. 
A) current assets. 
B) property, plant, and equipment. 
C) intangible assets. 
D) long-term investments.

Question 11

Land held for speculation is reported in the property, plant, and equipment section of the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 12

The account form and the report form of the statement of financial position are both acceptable under IFRS.

Accepted Answer

A) True 
 B)False

Question 13

Working capital is

Accepted Answer

A) capital which has been reinvested in the business. 
B) unappropriated retained earnings. 
C) cash and receivables less current liabilities. 
D) none of these choices are correct. 
A) capital which has been reinvested in the business. 
B) unappropriated retained earnings. 
C) cash and receivables less current liabilities. 
D) none of these choices are correct.

Question 14

Rosalie Corporation is located in London but does business throughout Europe.The company builds and sells equipment used in manufacturing pharmaceuticals.On December 31, 2015, Rosalie has trading securities valued at £63,000; goodwill valued at £450,000; prepaid insurance valued at £36,000; patents valued at £210,000; and a customer list valued at £390,000.On Rosalie Corporation's statement of financial position at December 31, 2015, what amount should be reported as intangible assets?

Accepted Answer

A) £1,113,000 
B) £1,149,000 
C) £1,050,000 
D) £660,000 
A) £1,113,000 
B) £1,149,000 
C) £1,050,000 
D) £660,000

Question 15

The IASB recommends disclosure for all significant accounting principles and methods that involve selection from among alternatives.

Accepted Answer

A) True 
 B)False

Question 16

Statement of financial position information is useful for all of the following except

Accepted Answer

A) assessing a company's risk 
B) evaluating a company's liquidity 
C) evaluating a company's financial flexibility 
D) determining free cash flows. 
A) assessing a company's risk 
B) evaluating a company's liquidity 
C) evaluating a company's financial flexibility 
D) determining free cash flows.

Question 17

In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for

Accepted Answer

A) operating activities. 
B) borrowing activities. 
C) lending activities. 
D) financing activities. 
A) operating activities. 
B) borrowing activities. 
C) lending activities. 
D) financing activities.

Question 18

Caroline, Inc.exchanged a tract of land it held in Mississippi for a tract of land owned by Rosalie Corporation located in Illinois.How is this transaction reported on Caroline, Inc.'s statement of cash flows?

Accepted Answer

A) As a cash inflow from investing activities and a cash outflow from financing activities. 
B) As a cash inflow and a cash outflow from investing activities. 
C) As a cash inflow and a cash outflow from financing activities. 
D) This transaction is not reported in the body of the statement of cash flows. 
A) As a cash inflow from investing activities and a cash outflow from financing activities. 
B) As a cash inflow and a cash outflow from investing activities. 
C) As a cash inflow and a cash outflow from financing activities. 
D) This transaction is not reported in the body of the statement of cash flows.

Question 19

Companies present a "Summary of Significant Accounting Policies" generally as the first note to the financial statements.

Accepted Answer

A) True 
 B)False

Question 20

Each of the following are an intangible asset except

Accepted Answer

A) copyrights. 
B) goodwill. 
C) plant expansion fund. 
D) trademarks. 
A) copyrights. 
B) goodwill. 
C) plant expansion fund. 
D) trademarks.

Exam 5: Statement of Financial Position and Statement of Cash Flows

Accounting policies include each of the following except

Sauder Corporation reports the following information: Sauder should report cash provided by operating activities of

The accounting profession has recommended that companies use the word reserve only to describe amounts deducted from assets.

Which of the following should be excluded from long-term liabilities?

Companies frequently describe the terms of all long-term liability agreements in notes to the financial statements.

Financial flexibility measures the ability of an enterprise to take effective actions to alter the amounts and timing of cash flows.

The statement of financial position contributes to financial reporting by providing a basis for all of the following except

Which of the following statement of financial position classifications would normally require the greatest amount of supplementary disclosure?

Within the statement of financial position where should the account non-controlling interest (minority interest) be reported?

Equity or debt securities held to finance future construction of additional plants should be classified on a balance sheet as

Land held for speculation is reported in the property, plant, and equipment section of the statement of financial position.

The account form and the report form of the statement of financial position are both acceptable under IFRS.

Working capital is

The IASB recommends disclosure for all significant accounting principles and methods that involve selection from among alternatives.

Statement of financial position information is useful for all of the following except

In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for

Caroline, Inc.exchanged a tract of land it held in Mississippi for a tract of land owned by Rosalie Corporation located in Illinois.How is this transaction reported on Caroline, Inc.'s statement of cash flows?

Companies present a "Summary of Significant Accounting Policies" generally as the first note to the financial statements.

Each of the following are an intangible asset except

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities, Provisions, and Contingencies

Non-Current Liabilities

Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Presentation and Disclosure in Financialreporting

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