Question 1

The view of income that IFRS generally supports is referred to as the

Accepted Answer

A) all-inclusive approach. 
B) current operating performance approach. 
C) other comprehensive income approach. 
D) operating income approach. 
A) all-inclusive approach. 
B) current operating performance approach. 
C) other comprehensive income approach. 
D) operating income approach.

Question 2

A trial balance will NOT balance if

Accepted Answer

A) an amount is posted to the wrong account. 
B) a transaction has been entered twice. 
C) a transaction has been omitted. 
D) only the debit side of a journal entry has been posted. 
A) an amount is posted to the wrong account. 
B) a transaction has been entered twice. 
C) a transaction has been omitted. 
D) only the debit side of a journal entry has been posted.

Question 3

On December 10, 2013 Peach Inc.received a cheque for $60,000 from a customer for services that Peach will be performing in December 2013 and January 2014.By December 31, 2013, Peach had earned 40% of that amount.Assuming the appropriate year end adjustments were made, the 2013 balance in Peach's Unearned Revenue account will be

Accepted Answer

A) $60,000. 
B) $36,000. 
C) $24,000. 
D) zero. 
A) $60,000. 
B) $36,000. 
C) $24,000. 
D) zero.

Question 4

Lower of cost and net realizable value (NRV) The December 31, 2014 inventory of Rhode Inc.consisted of four products, for which certain information is provided below:   Instructions Using the lower of cost and NRV approach applied on an individual-item basis, calculate the inventory valuation that should be reported for each product on December 31, 2014.

Accepted Answer

The answer of Lower of cost and net realizable value...

Question 5

The accrual basis of accounting

Accepted Answer

A) must be used by all taxpayers. 
B) recognizes revenue when earned and expenses when incurred. 
C) does not record depreciation. 
D) records depreciation but expenses all inventory purchases. 
A) must be used by all taxpayers. 
B) recognizes revenue when earned and expenses when incurred. 
C) does not record depreciation. 
D) records depreciation but expenses all inventory purchases.

Question 6

An external event involving a transfer or exchange between two or more entities or parties is called a(n)

Accepted Answer

A) account. 
B) transaction. 
C) ledger. 
D) accounting system. 
A) account. 
B) transaction. 
C) ledger. 
D) accounting system.

Question 7

If receivables are used as collateral in borrowing transactions

Accepted Answer

A) the receivables generally come under the control of the lender. 
B) a liability is reported on the borrower's statement of financial position. 
C) the receivables will be reported as a liability. 
D) the transaction would be reported as a sale. 
A) the receivables generally come under the control of the lender. 
B) a liability is reported on the borrower's statement of financial position. 
C) the receivables will be reported as a liability. 
D) the transaction would be reported as a sale.

Question 8

In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should be classified as cash inflows from

Accepted Answer

A) operating activities. 
B) financing activities. 
C) investing activities. 
D) selling activities. 
A) operating activities. 
B) financing activities. 
C) investing activities. 
D) selling activities.

Question 9

The double-entry accounting system is

Accepted Answer

A) the procedure of transferring journal entries to the ledger accounts. 
B) an accounting system first developed by Canada Revenue Agency. 
C) the procedure of entering transaction data in the journal. 
D) a system that records the dual effect of each transaction in appropriate accounts. 
A) the procedure of transferring journal entries to the ledger accounts. 
B) an accounting system first developed by Canada Revenue Agency. 
C) the procedure of entering transaction data in the journal. 
D) a system that records the dual effect of each transaction in appropriate accounts.

Question 10

A statement of cash flows prepared under the INDIRECT method adds and subtracts certain items to the base number.Decreases in unearned revenues would be shown as

Accepted Answer

A) a deduction from net income. 
B) an addition to net income. 
C) a deduction from sales. 
D) an addition to sales. 
A) a deduction from net income. 
B) an addition to net income. 
C) a deduction from sales. 
D) an addition to sales.

Question 11

Use the following information for questions  
-Assuming that Lock uses the perpetual inventory system, what should the inventory be at January 31, using the moving-average inventory method, rounded to the nearest dollar?

Accepted Answer

A) $10,237 
B) $10,260 
C) $10,360 
D) $10,505 
A) $10,237 
B) $10,260 
C) $10,360 
D) $10,505

Question 12

Application of the fair value model On January 20, 2015, Trail Corp.purchased a luxury apartment complex in British Columbia for   Instructions Prepare all required journal entries for 2015, 2016, and 2017.

Accepted Answer

@#IMG-DLM& Property, Plant, an

Question 13

If the earnings process has a critical event, it is often referred to as a

Accepted Answer

A) point of delivery. 
B) constructive obligation. 
C) discrete earnings process. 
D) transfer of risks and rewards of ownership. 
A) point of delivery. 
B) constructive obligation. 
C) discrete earnings process. 
D) transfer of risks and rewards of ownership.

Question 14

The business model may be broken down into three activities:

Accepted Answer

A) investing, operating, allocating. 
B) investing, operating, financing. 
C) financing, operating and comprehensive income. 
D) balance sheet, income statement, cash flow statement. 
A) investing, operating, allocating. 
B) investing, operating, financing. 
C) financing, operating and comprehensive income. 
D) balance sheet, income statement, cash flow statement.

Question 15

The likelihood of loss because of the failure of the other party to fully pay the amount owed is called

Accepted Answer

A) accounting risk. 
B) bad debts. 
C) credit risk. 
D) currency risk. 
A) accounting risk. 
B) bad debts. 
C) credit risk. 
D) currency risk.

Question 16

Which of the following is NOT a current liability?

Accepted Answer

A) unearned revenue 
B) derivatives 
C) stock dividends distributable 
D) trade accounts payable 
A) unearned revenue 
B) derivatives 
C) stock dividends distributable 
D) trade accounts payable

Question 17

The shareholders' equity section is usually divided into which four parts?

Accepted Answer

A) preferred shares, common shares, retained earnings, contributed surplus 
B) preferred shares, common shares, retained earnings, other comprehensive income 
C) capital shares, contributed surplus, retained earnings, accumulated other comprehensive
Income 
D) capital shares, appropriated retained earnings, unappropriated retained earnings,
Contributed surplus 
A) preferred shares, common shares, retained earnings, contributed surplus 
B) preferred shares, common shares, retained earnings, other comprehensive income 
C) capital shares, contributed surplus, retained earnings, accumulated other comprehensive
Income 
D) capital shares, appropriated retained earnings, unappropriated retained earnings,
Contributed surplus

Question 18

When a vendor is exposed to continued risks of ownership because of potential return of the product, which of the following accounting procedures should NOT be used?

Accepted Answer

A) Recording the sale, and accounting for returns as they occur in future periods. 
B) Not recording the sale until all return privileges have expired. 
C) Recording the sale, but reducing revenue by an estimate of future returns. 
D) Recording the sale, but ignoring future returns. 
A) Recording the sale, and accounting for returns as they occur in future periods. 
B) Not recording the sale until all return privileges have expired. 
C) Recording the sale, but reducing revenue by an estimate of future returns. 
D) Recording the sale, but ignoring future returns.

Question 19

Use the following information for questions. On April 1, Harmonica Corp.consigned 50 handcrafted benches to Organ Co.Harmonica's cost was $350 per bench.Total freight costs were $700, which were paid by Organ.On August 1, Harmonica received a cheque for $14,100 from Organ which included the following information:   Revenue Recognition 6 - 21  
-Flute Construction Corp.has consistently used the percentage-of-completion method. During 2014, Flute entered into a fixed-price contract to construct an office building for $6,000,000.Information relating to the contract is as follows:   Under the earnings approach, contract costs incurred during 2015 were

Accepted Answer

A) $1,440,000. 
B) $1,485,000. 
C) $1,575,000. 
D) $2,160,000. 
A) $1,440,000. 
B) $1,485,000. 
C) $1,575,000. 
D) $2,160,000.

Question 20

The current cash debt coverage ratio is often used to assess

Accepted Answer

A) financial flexibility. 
B) solvency. 
C) liquidity. 
D) profitability. 
A) financial flexibility. 
B) solvency. 
C) liquidity. 
D) profitability.

The view of income that IFRS generally supports is referred to as the

A trial balance will NOT balance if

The accrual basis of accounting

An external event involving a transfer or exchange between two or more entities or parties is called a(n)

If receivables are used as collateral in borrowing transactions

In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should be classified as cash inflows from

The double-entry accounting system is

A statement of cash flows prepared under the INDIRECT method adds and subtracts certain items to the base number.Decreases in unearned revenues would be shown as

Use the following information for questions -Assuming that Lock uses the perpetual inventory system, what should the inventory be at January 31, using the moving-average inventory method, rounded to the nearest dollar?

Application of the fair value model On January 20, 2015, Trail Corp.purchased a luxury apartment complex in British Columbia for Instructions Prepare all required journal entries for 2015, 2016, and 2017.

If the earnings process has a critical event, it is often referred to as a

The business model may be broken down into three activities:

The likelihood of loss because of the failure of the other party to fully pay the amount owed is called

Which of the following is NOT a current liability?

The shareholders' equity section is usually divided into which four parts?

When a vendor is exposed to continued risks of ownership because of potential return of the product, which of the following accounting procedures should NOT be used?

The current cash debt coverage ratio is often used to assess

Intermediate Accounting Volume 2

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Exam 1: Intermediate Accounting Volume 1

The view of income that IFRS generally supports is referred to as the

A trial balance will NOT balance if

The accrual basis of accounting

An external event involving a transfer or exchange between two or more entities or parties is called a(n)

If receivables are used as collateral in borrowing transactions

In a statement of cash flows, receipts from sales of property, plant, and equipment and other productive assets should be classified as cash inflows from

The double-entry accounting system is

A statement of cash flows prepared under the INDIRECT method adds and subtracts certain items to the base number.Decreases in unearned revenues would be shown as

Use the following information for questions -Assuming that Lock uses the perpetual inventory system, what should the inventory be at January 31, using the moving-average inventory method, rounded to the nearest dollar?

Application of the fair value model On January 20, 2015, Trail Corp.purchased a luxury apartment complex in British Columbia for Instructions Prepare all required journal entries for 2015, 2016, and 2017.

If the earnings process has a critical event, it is often referred to as a

The business model may be broken down into three activities:

The likelihood of loss because of the failure of the other party to fully pay the amount owed is called

Which of the following is NOT a current liability?

The shareholders' equity section is usually divided into which four parts?

When a vendor is exposed to continued risks of ownership because of potential return of the product, which of the following accounting procedures should NOT be used?

The current cash debt coverage ratio is often used to assess

Intermediate Accounting Volume 2

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