Accounting Principles II Exam Practice Tests
Course Introduction
Accounting Principles II is a continuation of introductory accounting, focusing on the principles and procedures related to corporate accounting. This course explores topics such as stockholder equity, long-term liabilities, investments, statement of cash flows, and financial statement analysis. Students will further develop their understanding of how financial information is reported and used in decision-making processes, deepening their knowledge of the accounting cycle and the role of ethics in the accounting profession. Emphasis is also placed on interpreting and analyzing accounting data to support business strategies and management decisions.
Recommended Textbook
Horngren's Accounting Volume 2 10th Canadian Edition by Tracie L. Miller Nobles
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7 Chapters
1392 Verified Questions
1392 Flashcards
Source URL: https://quizplus.com/study-set/3557
Page 2
Chapter 1: Partnerships
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202 Verified Questions
202 Flashcards
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Sample Questions
Q1) Refer to Table 12-6.Assuming Bud is given a 12.5% interest in the partnership for a $60,000 cash investment,the entry to record his investment includes a:
A) credit to Bud, Capital for $40,000
B) debit to Donna, Capital for $6,000
C) credit to Rick, Capital for $8,000
D) credit to Bud, Capital for $60,000
Answer: A
Q2) Jen,Brad,and George formed a partnership with Jen contributing $50,000,Brad contributing $60,000 and George investing $90,000.Their partnership agreement called for the net income division to be based on the ratio of capital investments.If the partnership net income for the first year of operations was $75,000,what amount of net income would be credited to Jen's capital account?
A) $18,750
B) $22,500
C) $37,500
D) $43,500
Answer: A
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Page 3
Chapter 2: Corporations: Share Capital and the Balance Sheet
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180 Verified Questions
180 Flashcards
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Sample Questions
Q1) The primary difference between Accounting Standards for Private Enterprises (ASPE_and International Financial Reporting Standards (IFRS_for share capital are:
A) There are no differences
B) The required disclosure for share capital
C) The accounting treatment of preferred shares
D) The accounting treatment of share payments
Answer: B
Q2) Your friends have come to you for advice.They are starting a landscaping business and are confused about which organizational structure to choose - partnership or corporation.What structure would you recommend? Support your recommendation by discussing the advantages and disadvantages of both of these organizational structures.
Answer: Students should select one-partnership or corporation-and then draw on the advantages and disadvantages of each organizational structure to support their recommendation.
Q3) Annually the corporation must pay dividends to their shareholders.
A)True
B)False
Answer: False
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Chapter 3: Corporations: Retained Earnings and the
Income Statement
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205 Verified Questions
205 Flashcards
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Sample Questions
Q1) Refer to Table 14-5.The balance in the common shares account after the distribution of a 10% common stock dividend is: __________.
Answer: $400,000 + (50,000 × 10% × $12.00_= $460,000
Q2) Atlantic Motels Ltd.(AML),a mid-size motel chain on Canada's east coast,had Retained Earnings of $5.7 million at the beginning of 2017.During 2017 AML earned a net income of $955,000.Given the profitable year AML distributed cash dividends of $500,000 to common shareholders.Prepare the statement of retained earnings for AML for the year ended December 31,2017.
Answer: Atlantic Motels Ltd.
Statement of Retained Earnings
For the year ended December 31,2017
\[\begin{array} { l c }
\text { Retained earnings, Jan. 1,2017 } & \$ 5,700,000 \\
\text { Net Income for } 2017 & 955,000 \\
\text { Dividends for } 2017 & \underline{( 500,000 )} \\
\text { Retained earnings, Dec. 31, } 2017 &\underline{ \$ 6,155,000} \end{array}\]
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Page 5
Chapter 4: Long-Term Liabilities
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186 Verified Questions
186 Flashcards
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Sample Questions
Q1) The book value of bonds is equal to bonds payable:
A) plus the unamortized premium
B) less the unamortized premium
C) less the amortized premium
D) plus the amortized premium
Q2) The main difference in accounting for leases under Accounting Standards for Private Enterprises (ASPE_versus International Financial Reporting Standards (IFRS_is that IFRS requires effective-interest method of amortizing a bond discount or premium.
A)True
B)False
Q3) Refer to Table 15-7.Assuming the bonds were issued on May 1,2017,at 107.44 when the market interest rate was 6%,and the company uses the effective interest method of amortization,the semiannual interest payment on November 1,2017,would include a:
A) debit to interest expense for $175,000
B) debit to discount on bonds payable for $13,840
C) credit to premium on bonds payable for $13,840
D) debit to interest expense for $161,160
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Chapter 5: Investments and International Operations
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191 Verified Questions
191 Flashcards
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Sample Questions
Q1) In early 2017,Brownlee Corporation found itself with idle cash that it decided to invest in the shares of another business.The following events transpired in 2017 and 2018: 2017
Feb. 1 Brownlee Corporation purchased 1,000 shares in Green Corporation at 16.50 per share
This investment was classified as a short-term investment.
Nov. 15 A dividend of \( \$ 1 \) per share was received on the Green Corporation shares. Dec. 31 This is the end of the fiscal year for Brownlee Corporation. On this date the Green Corporation shares were worth 15.45 per share. 2018 \(\text {Jan. } 27 \text { Brownlee Corporation sold } 500 \text { Green Corporation shares for } 17.50 \text { per share }\) Prepare journal entries for the above transactions.
Q2) Currency exchange rates are affected by the demand for a country's currency. A)True B)False
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Chapter 6: The Cash Flow Statement
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207 Verified Questions
207 Flashcards
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Sample Questions
Q1) An exchange of shares for land is presented on the cash flow statement as a financing activity and an investing activity.
A)True
B)False
Q2) Under Accounting Standards for Private Enterprises (ASPE),payment of dividends is classified as a financing activity in the cash flow statement.Under International Financial Reporting Standards (IFRS),how is payment of dividends reported?
A) as an operating activity
B) as a financing activity
C) as either an operating or financing activity
D) as an investing activity
Q3) Which of the following is considered a financing activity?
A) interest earned on short-term investments
B) sale of inventory
C) dividends received on investments in shares
D) dividends paid to shareholders
Q4) Format of the operating activities section of the cash flow statement that lists the major categories of operating cash receipts and cash payments
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Chapter 7: Financial Statement Analysis
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214 Verified Questions
214 Flashcards
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Sample Questions
Q1) Following is a comparative income statement for Chui Corporation: Chui Corporation
Comparative Income Statement
For the Years Ended December 31, 2017 and 2016 \(\begin{array} { l r r } & 2017 & 2016 \\
\text { Net sales } & \$ 122,000 & \$ 120,000 \end{array}\) Expenses: \(\begin{array}{lrr}
\text { Cost of goods sold } & 62,000 & 57,000 \\
\text { Selling and general expenses } & 20,000 & 12,000 \\
\text { Interest expense } & 12,000 & 14,000 \\
\text { Income tax expense } & 6,000 & 7,000 \\
\text { Total expenses }&100,000&90,000\\
\text { Net income }&\$22,000&\$30,000
\end{array}\) a_Prepare a horizontal analysis of Chui income statement. b_What positive/negative changes do you see that may have contributed to the $8,000 decrease in net income?
Q2) Ratio of dividends per share to market price per share
Q3) Study of percentage changes in comparative financial statements
Q4) Ratio of total liabilities to total assets
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