Question 1

Which statement is correct under the IFRS definition for a "liability"?

Accepted Answer

A) The obligating event must be probable before the liability can be recognized. 
B) The obligating event must be virtually certain before the liability can be recognized. 
C) A reliable measure of the obligation must exist before the liability can be recognized. 
D) A precise measure of the obligation must exist before the liability can be recognized. 
A) The obligating event must be probable before the liability can be recognized. 
B) The obligating event must be virtually certain before the liability can be recognized. 
C) A reliable measure of the obligation must exist before the liability can be recognized. 
D) A precise measure of the obligation must exist before the liability can be recognized.

Question 2

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 3

What are "liabilities"? Differentiate between financial liabilities and nonfinancial liabilities.

Accepted Answer

∙ Liabilities are present obligations of

Question 4

On January 1,2017 BCL Transmission Services Co.issued a $40,000,non-interest bearing note,due on January 1,2018,in exchange for a custom-built computer system.The fair value of the computer system is not easily determinable.The market rate of interest for similar transactions is 4%.BCL's year-end is December 31.
Required:
a.Prepare the journal entry to record the issuance of the note payable.
b.Prepare the journal entry to record the accrual of interest at December 31,2017,assuming that BCL prepares adjusting entries only at year-end.
c.Prepare the journal entry to record the retirement of the note payable on January 1,2018.

Accepted Answer

@#IMG-DLM& No entry for intere

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

Gladstone Distributors Inc.entered into a non-cancellable contract to buy 40,000 litres of linseed oil for $6 per litre for resale purposes.Gladstone intends to resell the oil to retail paint outlets for $10 per litre.The contract was entered into on October 31,2016 for delivery on January 15,2017.Gladstone's year-end is December 31.On December 12,2016,Gladstone's supplier reduces the price to $5.10 per litre due to adverse market conditions.
Required:
a.Outline the required accounting treatment assuming that Gladstone expects it can sell the oil for $6.45 per litre.
b.Outline the required accounting treatment assuming that Gladstone expects it can sell the oil for $5.55 per litre.

Accepted Answer

@#IMG-DLM& 
a.While the company has contracted to

Question 7

In 2017,Johnson's Cycles Inc.sold 5,000 mountain bikes.For the first time,Johnson offered an in-store,no-charge,two-year warranty on each bike sold.Company management estimates that the average cost of providing the warranty is $8 per unit in the first year of coverage and $11 per unit in the second year.
Johnson's warranty-related expenditures totaled $36,500 for labor costs during 2017.
Required:
a.Prepare the summary journal entry to recognize Johnson's warranty expense in 2017.
b.Prepare the summary journal entry to recognize the warranty service provided in 2017.
c.Determine the total provision for warranty obligations that will be reported on the company's balance sheet at year-end.Assuming that all sales transactions and warranty service took place on the last day of the year,how much of the warranty obligation will be classified as a current liability? As a non-current liability?

Accepted Answer

@#IMG-DLM& c.The total provision for warranty obli

Question 8

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

Accepted Answer

A) The same probability threshold is used to record contingent liabilities and provisions. 
B) The same probability threshold is used to record contingent assets and contingent liabilities. 
C) Possible contingent liabilities are recorded. 
D) Virtually certain contingent assets are recorded. 
A) The same probability threshold is used to record contingent liabilities and provisions. 
B) The same probability threshold is used to record contingent assets and contingent liabilities. 
C) Possible contingent liabilities are recorded. 
D) Virtually certain contingent assets are recorded.

Question 9

Explain the difference between "probable," "possible," and "remote" under IFRS.

Accepted Answer

Probable: The probability of occurrence

Question 10

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 11

Which of the following is true about non-interest bearing notes?

Accepted Answer

A) The most common method of determining the fair value of non-interest bearing notes is the discounted cash flow analysis. 
B) Non-interest bearing short-term payables may never be measured at the original invoice amount. 
C) A rule of thumb is to use the face value for non-interest bearing notes payable with a duration of greater than 90 days. 
D) A rule of thumb is to use the market value for non-interest bearing notes payable with a duration of 90 days or less. 
A) The most common method of determining the fair value of non-interest bearing notes is the discounted cash flow analysis. 
B) Non-interest bearing short-term payables may never be measured at the original invoice amount. 
C) A rule of thumb is to use the face value for non-interest bearing notes payable with a duration of greater than 90 days. 
D) A rule of thumb is to use the market value for non-interest bearing notes payable with a duration of 90 days or less.

Question 12

Deck Contractors Inc.(DC)enters into a contract to construct six decks adjacent to a commercial building.The purchaser has agreed to pay $8,500 for each deck (total $51,000).The terms of the contract call for a 40% deposit ($3,400 per deck)at time of contract signing and payment of the balance ($5,100 per deck)as each deck is completed.
The contract is signed on October 1,2017.Two decks are completed in 2017 and the balance in 2018.DC has a December 31 year-end.The cost to DC of constructing each deck is $3,400,which it pays in cash.
Required:
a.Prepare summary journal entries for 2017 and 2018.
b.What is the balance in the deferred revenue account as at December 31,2017?

Accepted Answer

a.Summary journal entries
 @#IMG-DLM& b.

Question 13

Which is a reason to use the net method to record purchase discounts?

Accepted Answer

A) Cost-benefit factor is greater for the net method. 
B) Reporting "purchase discounts lost" signifies inefficient business practices. 
C) Given the materiality of the amounts involved,the net method is used. 
D) The net method is technically superior to the gross method. 
A) Cost-benefit factor is greater for the net method. 
B) Reporting "purchase discounts lost" signifies inefficient business practices. 
C) Given the materiality of the amounts involved,the net method is used. 
D) The net method is technically superior to the gross method.

Question 14

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

Accepted Answer

A) A future obligation arising from current events,the settlement of which is expected to result in an outflow of resources. 
B) A present obligation arising from current events,the settlement of which is expected to result in an outflow of resources. 
C) A future 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 current events,the settlement of which is expected to result in an outflow of resources. 
B) A present obligation arising from current events,the settlement of which is expected to result in an outflow of resources. 
C) A future 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 15

Which is a non-current liability?

Accepted Answer

A) HST payable. 
B) 45 day accounts payable. 
C) Five year loan that matures four months after year end reporting date. 
D) The creditor has granted a 15-month grace period on a loan in default. 
A) HST payable. 
B) 45 day accounts payable. 
C) Five year loan that matures four months after year end reporting date. 
D) The creditor has granted a 15-month grace period on a loan in default.

Question 16

Fill in the following chart.

Accepted Answer

The answer of Fill in the following chart.
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Question 17

A company purchases inventory on credit for $40,000.Inventory costing $30,000 is sold on credit for $50,000.The applicable HST rate is 10%.Sales taxes are remitted on a monthly basis.Prepare the necessary journal entries for this transaction.

Accepted Answer

Purchase o

Question 18

Contrast the gross method with the net method of recording purchase discounts by completing the following table:

Accepted Answer

The answer of Contrast the gross method with the net...

Question 19

Which statement is correct?

Accepted Answer

A) Supplier discounts can only be accounted for by using the gross method. 
B) The amount owing for trade payables is generally not known with a high degree of certainty. 
C) An accrued liability is needed when a company has received goods,but not the invoice. 
D) Completeness means that obligations are reported in the proper accounting period. 
A) Supplier discounts can only be accounted for by using the gross method. 
B) The amount owing for trade payables is generally not known with a high degree of certainty. 
C) An accrued liability is needed when a company has received goods,but not the invoice. 
D) Completeness means that obligations are reported in the proper accounting period.

Question 20

Which statement about sales taxes is correct?

Accepted Answer

A) The consumer is responsible for remitting the tax to the government. 
B) Taxes are uniformly applied to all sale transactions. 
C) Businesses can deduct the GST paid on their purchases from GST collected. 
D) The same products that are exempt from GST are exempt from PST. 
A) The consumer is responsible for remitting the tax to the government. 
B) Taxes are uniformly applied to all sale transactions. 
C) Businesses can deduct the GST paid on their purchases from GST collected. 
D) The same products that are exempt from GST are exempt from PST.

Which statement is correct under the IFRS definition for a "liability"?

Which statement about deferred revenue is correct?

What are "liabilities"? Differentiate between financial liabilities and nonfinancial liabilities.

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

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

Explain the difference between "probable," "possible," and "remote" under IFRS.

Which statement about contingent liabilities is correct?

Which of the following is true about non-interest bearing notes?

Which is a reason to use the net method to record purchase discounts?

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

Which is a non-current liability?

Fill in the following chart.

A company purchases inventory on credit for $40,000.Inventory costing $30,000 is sold on credit for $50,000.The applicable HST rate is 10%.Sales taxes are remitted on a monthly basis.Prepare the necessary journal entries for this transaction.

Contrast the gross method with the net method of recording purchase discounts by completing the following table:

Which statement is correct?

Which statement about sales taxes is correct?

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Accounting for Income Taxes

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters

Exam 11: Current Liabilities and Contingencies

Which statement is correct under the IFRS definition for a "liability"?

Which statement about deferred revenue is correct?

What are "liabilities"? Differentiate between financial liabilities and nonfinancial liabilities.

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

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

Explain the difference between "probable," "possible," and "remote" under IFRS.

Which statement about contingent liabilities is correct?

Which of the following is true about non-interest bearing notes?

Which is a reason to use the net method to record purchase discounts?

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

Which is a non-current liability?

Fill in the following chart.

A company purchases inventory on credit for $40,000.Inventory costing $30,000 is sold on credit for $50,000.The applicable HST rate is 10%.Sales taxes are remitted on a monthly basis.Prepare the necessary journal entries for this transaction.

Contrast the gross method with the net method of recording purchase discounts by completing the following table:

Which statement is correct?

Which statement about sales taxes is correct?

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Accounting for Income Taxes

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters