Question 1

The income statement is related to the balance sheet because:

Accepted Answer

A) Income increases owners' equity and total assets (or reduces liabilities). 
B) Income increases only owners' equity. 
C) Assets and expenses have debit balances. 
D) Liabilities and revenue have credit balances. 
A) Income increases owners' equity and total assets (or reduces liabilities). 
B) Income increases only owners' equity. 
C) Assets and expenses have debit balances. 
D) Liabilities and revenue have credit balances.

Question 2

A corporation had total assets of $40,000,total liabilities of $20,000,and total contributed capital of $8,000 at the beginning of the year.For the year,the corporation earned net income of $50,000 and paid cash dividends of $10,000.At the end of the year,the company had total assets of $80,000 and its total contributed capital remained at $8,000.At the end of the year,the corporation had total liabilities of:

Accepted Answer

A) $-0- 
B) $20,000 
C) $28,000 
D) $32,000 
A) $-0- 
B) $20,000 
C) $28,000 
D) $32,000

Question 3

Under IFRS,balance sheet items may be classified as current/non-current or by order of liquidity (or reverse liquidity).

Accepted Answer

A) True 
 B)False

Question 4

Accounting errors and policy changes are handled retrospectively,with an adjustment to opening Retained Earnings to correct for the effects of these,while changes in accounting estimates are handled prospectively.

Accepted Answer

A) True 
 B)False

Question 5

Which item below is not a current asset?

Accepted Answer

A) Prepaid expense 
B) Unearned revenue 
C) Short-term investment 
D) Work-in-process inventory 
A) Prepaid expense 
B) Unearned revenue 
C) Short-term investment 
D) Work-in-process inventory

Question 6

ABC Inc's largest customer declared bankruptcy shortly after the company's fiscal year end but well before the financial statements for the last year were issued.The company accounted for roughly 80% ABC's revenues.On the date of bankruptcy,the company owed ABC Inc.$500,000 for purchases it made from ABC Inc during the preceding fiscal year.Given the above,what should the company do from an accounting/financial reporting standpoint?

Accepted Answer

A) Will not disclose the event and the estimated amount uncollectible in a note to the financial statements. 
B) Disclose the event as part of management's M, D & A (Management Discussion and Analysis). 
C) Both disclose the event and the estimated amount uncollectible in a note to the financial statements and accrue for the estimated amount uncollectible. 
D) No action is required. 
A) Will not disclose the event and the estimated amount uncollectible in a note to the financial statements. 
B) Disclose the event as part of management's M, D & A (Management Discussion and Analysis). 
C) Both disclose the event and the estimated amount uncollectible in a note to the financial statements and accrue for the estimated amount uncollectible. 
D) No action is required.

Question 7

Guarantees are always recorded as liabilities in the financial statements.

Accepted Answer

A) True 
 B)False

Question 8

The shareholders' equity section is usually divided into which three parts on an ASPE Balance Sheet?

Accepted Answer

A) Preferred shares, common shares, treasury shares. 
B) Preferred shares, common shares, retained earnings. 
C) Capital shares, contributed surplus, retained earnings. 
D) Capital shares, appropriated retained earnings, unappropriated retained earnings. 
A) Preferred shares, common shares, treasury shares. 
B) Preferred shares, common shares, retained earnings. 
C) Capital shares, contributed surplus, retained earnings. 
D) Capital shares, appropriated retained earnings, unappropriated retained earnings.

Question 9

Biological assets,Investment Properties and Provisions must all be shown separately under IFRS (wherever applicable) but not under ASPE.

Accepted Answer

A) True 
 B)False

Question 10

A company reported current assets of $150,000,current liabilities of $100,000 and total assets of $450,000; therefore,the:
(a) Amount of working capital was $_____________________.
(b) Working capital ratio was $_________________________.

Accepted Answer

(a) Working capital,

Question 11

Consider ABC Inc's most recent segment results: $$\begin{array} { | c | c | c | c | } 
\hline \text { Segment } & \text { Revenues } & \text { Assets } & \text { Profits } \
\hline \text { A } & 2000 & 500 & 500 \
\hline \text { B } & 300 & 2000 & 200 \
\hline \text { C } & 200 & 500 & 100 \
\hline \text { D } & 3000 & 5000 & 300 \
\hline & & & \
\hline \text { Totals: } & \mathbf { 5 5 0 0 } & \mathbf { 8 0 0 0 } & \mathbf { 1 1 0 0 } \
\hline
\end{array}$$ Required:
Which of the above segments would be reportable as per IFRS 8?

Accepted Answer

@#IMG-DLM& Thus,Segments A,B & D reporta

Question 12

Errors are normally unintentional,but may on occasion be intentional.

Accepted Answer

A) True 
 B)False

Question 13

An example of an item which is NOT an element of working capital is:

Accepted Answer

A) Accrued interest on notes receivable. 
B) Organization costs. 
C) Goods in process. 
D) Accounts Payable. 
A) Accrued interest on notes receivable. 
B) Organization costs. 
C) Goods in process. 
D) Accounts Payable.

Question 14

The beginning-of-the-year total owner's equity for a firm was $40,000.During the year,the firm issued common stock for a total proceeds of $20,000,earned $10,000 net income,and paid $5,000 in cash dividends.If ending total liabilities are $100,000,what is ending total assets?

Accepted Answer

A) $165,000 
B) $75,000 
C) $35,000 
D) $100,000 
A) $165,000 
B) $75,000 
C) $35,000 
D) $100,000

Question 15

When a company depends heavily on one or a few customer(s) for its business,this must be disclosed in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 16

The party responsible for the financial statements of a company is the:

Accepted Answer

A) Shareholders of the company. 
B) Management of the company. 
C) Independent auditor. 
D) Government. 
A) Shareholders of the company. 
B) Management of the company. 
C) Independent auditor. 
D) Government.

Question 17

A statement of changes in Equity is mandatory under both IFRS and ASPE.

Accepted Answer

A) True 
 B)False

Question 18

Assets must be presented before liabilities and equities under IFRS.

Accepted Answer

A) True 
 B)False

Question 19

Deferred Income Tax Assets and Liabilities must be presented as non-current under IFRS.

Accepted Answer

A) True 
 B)False

Question 20

All items in Accumulated Other Comprehensive Income must eventually be recycled to the income statement.

Accepted Answer

A) True 
 B)False

The income statement is related to the balance sheet because:

Under IFRS,balance sheet items may be classified as current/non-current or by order of liquidity (or reverse liquidity).

Accounting errors and policy changes are handled retrospectively,with an adjustment to opening Retained Earnings to correct for the effects of these,while changes in accounting estimates are handled prospectively.

Which item below is not a current asset?

Guarantees are always recorded as liabilities in the financial statements.

The shareholders' equity section is usually divided into which three parts on an ASPE Balance Sheet?

Biological assets,Investment Properties and Provisions must all be shown separately under IFRS (wherever applicable) but not under ASPE.

A company reported current assets of $150,000,current liabilities of $100,000 and total assets of $450,000; therefore,the: (a) Amount of working capital was $_. (b) Working capital ratio was $_____.

Consider ABC Inc's most recent segment results: Segment Revenues Assets Profits A 2000 500 500 B 300 2000 200 C 200 500 100 D 3000 5000 300 Totals: Required: Which of the above segments would be reportable as per IFRS 8?

Errors are normally unintentional,but may on occasion be intentional.

An example of an item which is NOT an element of working capital is:

The beginning-of-the-year total owner's equity for a firm was $40,000.During the year,the firm issued common stock for a total proceeds of $20,000,earned $10,000 net income,and paid $5,000 in cash dividends.If ending total liabilities are $100,000,what is ending total assets?

When a company depends heavily on one or a few customer(s) for its business,this must be disclosed in the notes to the financial statements.

The party responsible for the financial statements of a company is the:

A statement of changes in Equity is mandatory under both IFRS and ASPE.

Assets must be presented before liabilities and equities under IFRS.

Deferred Income Tax Assets and Liabilities must be presented as non-current under IFRS.

All items in Accumulated Other Comprehensive Income must eventually be recycled to the income statement.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters

Exam 4: Statements of Financial Position and Changes in Equity; Disclosure Notes

The income statement is related to the balance sheet because:

Under IFRS,balance sheet items may be classified as current/non-current or by order of liquidity (or reverse liquidity).

Accounting errors and policy changes are handled retrospectively,with an adjustment to opening Retained Earnings to correct for the effects of these,while changes in accounting estimates are handled prospectively.

Which item below is not a current asset?

Guarantees are always recorded as liabilities in the financial statements.

The shareholders' equity section is usually divided into which three parts on an ASPE Balance Sheet?

Biological assets,Investment Properties and Provisions must all be shown separately under IFRS (wherever applicable) but not under ASPE.

A company reported current assets of $150,000,current liabilities of $100,000 and total assets of $450,000; therefore,the: (a) Amount of working capital was $_____________________. (b) Working capital ratio was $_________________________.

Consider ABC Inc's most recent segment results: Segment Revenues Assets Profits A 2000 500 500 B 300 2000 200 C 200 500 100 D 3000 5000 300 Totals: Required: Which of the above segments would be reportable as per IFRS 8?

Errors are normally unintentional,but may on occasion be intentional.

An example of an item which is NOT an element of working capital is:

The beginning-of-the-year total owner's equity for a firm was $40,000.During the year,the firm issued common stock for a total proceeds of $20,000,earned $10,000 net income,and paid $5,000 in cash dividends.If ending total liabilities are $100,000,what is ending total assets?

When a company depends heavily on one or a few customer(s) for its business,this must be disclosed in the notes to the financial statements.

The party responsible for the financial statements of a company is the:

A statement of changes in Equity is mandatory under both IFRS and ASPE.

Assets must be presented before liabilities and equities under IFRS.

Deferred Income Tax Assets and Liabilities must be presented as non-current under IFRS.

All items in Accumulated Other Comprehensive Income must eventually be recycled to the income statement.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Property,Plant,and Equipment; Intangibles; and Goodwill

Depreciation,Amortization,and Impairment

Financial Instruments: Investments in Debt and Equity Securities

Filters

A company reported current assets of $150,000,current liabilities of $100,000 and total assets of $450,000; therefore,the: (a) Amount of working capital was $_. (b) Working capital ratio was $_____.