Intermediate Accounting II
Solved Exam Questions
Course Introduction
Intermediate Accounting II builds upon the foundational principles covered in the first intermediate accounting course, focusing on more complex aspects of financial reporting and analysis. This course delves into intricate topics such as liabilities, shareholders equity, investments, revenue recognition, earnings per share, and accounting for income taxes, pensions, and leases. Students will gain proficiency in applying generally accepted accounting principles (GAAP) to real-world business scenarios, preparing and analyzing financial statements, and interpreting the impact of various accounting policies on the financial position and performance of companies. Through problem-solving exercises and case studies, the course prepares students for advanced accounting challenges and professional examinations.
Recommended Textbook
Intermediate Accounting 6th Edition Volume 2 by Thomas H. Beechy
Available Study Resources on Quizplus
11 Chapters
1425 Verified Questions
1425 Flashcards
Source URL: https://quizplus.com/study-set/2889
Page 2
Chapter 1: The Framework for Financial Reporting
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/57522
Sample Questions
Q1) XY Company owed a $45,489 due on January 1,2015.An agreement was reached to pay it off in five equal annual payments,starting on December 31,2015.The interest rate was 10 percent.The total amount of interest paid under the terms of the agreement was (round annual payment to nearest $1):
A) $25,000
B) $22,745
C) $14,511
D) $6,000
Answer: C
Q2) Constructive obligations may arise from:
A) Accrued Liabilities resulting from operations.
B) Warranty obligations.
C) Notes Payable.
D) Unearned Revenues.
Answer: B
Q3) Under IFRS,a continuity schedule must be provided for both provisions and contingencies.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Accounting Judgements
Available Study Resources on Quizplus for this Chatper
77 Verified Questions
77 Flashcards
Source URL: https://quizplus.com/quiz/57521
Sample Questions
Q1) If bonds are issued initially at a discount and the straight-line method of amortization is used for the discount,interest expense in the early years will be:
A) less than if the interest method is used.
B) less than the amount of the interest payments.
C) more than if the interest method is used.
D) The same as if the interest method is used.
Answer: C
Q2) JV issued $10,000,10% bonds payable (interest payable annually),which mature at the end of six years from issue date.The effective rate of interest at issue date was 12%.The sale price of the bonds was: $_________________.
Answer: 11ea71d0_1fe9_bf0a_89cd_0159173f3fd3_TB2440_00
Q3) For bonds payable,the cash interest paid in each interest period is:
A) The same amount regardless of whether the bond was sold at par, a discount, or a premium.
B) Different depending upon the date of sale.
C) Not the same amount when the stated and yield interest rates are different.
D) Dependent on the initial amount of accrued interest.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Statements of Income and Comprehensive Income
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/57520
Sample Questions
Q1) XHC had only two share transactions.Initially,XHC issued 1,000 common shares,at $15 per share.XHC later bought back 200 shares at $16 per share.Under the single-transaction method,what is the amount that should be recorded in the treasury stock account?
A) $2,000
B) $3,000
C) $3,200
D) $3,600
Answer: C
Q2) The entry to record share issue costs will never affect:
A) Earnings.
B) Share Capital.
C) Retained Earnings.
D) Liabilities.
Answer: A
Q3) A stock split results in the reduction of the par or stated value per share and a proportional increase in the number of shares outstanding.
A)True
B)False
Answer: True
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Statements of Financial Position and Changes in Equity; Disclosure Notes
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/57519
Sample Questions
Q1) Under ASPE,convertible debt must always be treated as debt in its entirety.
A)True
B)False
Q2) Options are ONLY for the purpose of buying or selling financial instruments.
A)True
B)False
Q3) Which of the following forms part of the definition of a financial liability?
A) Cash
B) An equity instrument of another entity
C) To deliver cash or another financial asset to another party
D) A contractual right to receive cash or another financial asset from another party
Q4) Which of the following are requirements for hedge accounting?
A) An existing risk management strategy involving hedging.
B) Designation and documentation of the hedging relationship.
C) Reasonable expectation of hedge effectiveness.
D) All of these answers are correct.
Q5) A company issues a financial instrument for $40,000 paying interest of $4,000 per year.How would the repayment of the financial instrument be treated if it was determined to be debt?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/57518
Sample Questions
Q1) In Canada,tax rates are usually enacted in the year to which they pertain.
A)True
B)False
Q2) Under the comprehensive allocation method,deferred tax assets and liabilities are valued at the tax rates that are expected to be substantially enacted in the year of reversal.
A)True B)False
Q3) EGR Company provided you with the following information:
2013 Net Income: $1,500,000
2014 Net Income: $900,000
2013 Tax rate: 35%
2014 Tax rate: 40%
In addition,the only difference between accounting and tax are warranty costs accrued of $100,000 in 2013.No actual warranty expenses were incurred in 2013 or 2014.Prepare journal entries for 2013 and 2014 to record income tax expense.
Q4) What term is used to describe an amount that will eventually be taxable?
Q5) Under the indirect method of preparing cash flows from operating activities,deferred income tax expense must be added back to net income.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Revenue Recognition
Available Study Resources on Quizplus for this Chatper
98 Verified Questions
98 Flashcards
Source URL: https://quizplus.com/quiz/57517
Sample Questions
Q1) VB Corporation reported a net loss of $50,000 for accounting purposes.Items included in the loss are golf dues amounting to $3,000,meals and entertainment totalling $10,000,CCA of $10,000,depreciation of $5,000,warranty expenses of $8,000 and warranty expenditures of $6,000.VB's taxable income is:
A) ($45,000)
B) ($51,000).
C) ($57,000).
D) ($58,000).
Q2) FGH had a $1,200 temporary difference for deferred gross margin on instalment sales at the end of 2012.This temporary difference will reverse equally during 2013,2014 and 2015.The enacted corporate income tax rate is 48% and government is discussing a reduction in the corporate income tax rates for 2014 and 2015 to 38%.The deferred income tax liability related to this temporary difference at the end of 2013 would be:
A) $192
B) $248
C) $384
D) $576
Q3) Describe the difference between a tax loss and a tax benefit.
Q4) How can a company use CCA to fully utilize losses that have been incurred?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Financial Assets: Cash and Receivables
Available Study Resources on Quizplus for this Chatper
227 Verified Questions
227 Flashcards
Source URL: https://quizplus.com/quiz/57516
Sample Questions
Q1) Executory costs include:
A) finance expense incurred.
B) annual lease rentals paid.
C) insurance premiums.
D) leasehold improvements.
Q2) Leasing assets can result in much time and effort on the part of the lessee.Contracts,details,complex calculations and journal entries are all required to accurately track each lease.Why then,with all the extra work involved would a company be inclined to lease instead of buy?
Q3) On January 1,2014,MU Corporation leased an asset,under an operating lease,to obtain the use of a special machine for three years.The lease payments were $9,000 per year payable at each year-end; the lessee must pay all operating expenses.At the inception date,MU Corporation should:
A) record the asset at $27,000.
B) record the rent expense of $27,000.
C) record the asset at its fair market value.
D) record the asset at the present value of the annual lease payments.
E) make no entry.
Q4) Explain what a temporary difference is and how it arises?
Q5) Explain the most common methods of avoiding lease capitalization?
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Cost-Based Inventories and Cost of Sales
Available Study Resources on Quizplus for this Chatper
93 Verified Questions
93 Flashcards
Source URL: https://quizplus.com/quiz/57515
Sample Questions
Q1) The amount of the expected return on plan assets is usually computed by multiplying the:
A) ending market-related value of the plan assets by the expected long-term rate of return on plan assets.
B) beginning carrying value of the plan assets by the actuary's interest rate.
C) average carrying value of the plan assets by the expected long-term rate of return on plan assets.
D) beginning market-related value of the plan assets by the expected long-term rate of return on plan assets.
Q2) For a given employee group,the accumulated benefit method of funding for defined benefit plans results in increasingly larger contributions to the fund over time when compared to both the projected unit credit and level contribution methods.Assume that average salaries increase over time.
A)True
B)False
Q3) Under a defined contribution pension plan,forfeitures are estimated in advance.
A)True
B)False
Q4) What is a defined contribution plan?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Long-Lived Assets
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/57514
Sample Questions
Q1) A reverse split may be used to increase the value per share of a company.
A)True
B)False
Q2) On January 1,2014,WXY had stock warrants outstanding to purchase 6,000 shares at an option price of $10.The common shares' market price was $15 the entire year.The firm has 200,000 common shares outstanding at the end of the year.The effect of the warrants on EPS is to:
A) Increase the denominator of all EPS calculations by 6,000 shares.
B) Increase the denominator of all EPS calculations by 2,000 shares.
C) Affect the diluted EPS calculation, but not the basic EPS calculation.
D) Have no potentially dilutive effect on the EPS calculation.
E) Increase the denominator of all EPS calculations by 4,000 shares.
Q3) When computing diluted earnings per share,convertible securities are:
A) Ignored.
B) Recognized only if they are dilutive.
C) Recognized only if they are anti-dilutive.
D) Recognized whether they are dilutive or anti-dilutive.
Q4) Only firms with a complex capital structure must compute diluted EPS.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Depreciation, Amortization, and Impairment
Available Study Resources on Quizplus for this Chatper
154 Verified Questions
154 Flashcards
Source URL: https://quizplus.com/quiz/57513
Sample Questions
Q1) Which of the following types of errors will not self-correcting the next year?
A) Accrued expenses not recognized at year-end.
B) Accrued revenues (but not collected) not recognized at year-end.
C) Depreciation expense overstated for the year.
D) Prepaid expenses not recognized at year-end.
E) Prepaid revenues (collected in advance) not recognized at year-end.
Q2) Which of the following combinations of errors would cause a $2,000 overstatement of pre-tax income?
A) $4,000 Overstated by beginning inventory and $2,000 Understated by ending inventory
B) $4,000 Understated by beginning inventory and $2,000 Understated by ending inventory
C) $4,000 Overstated ending by inventory and $2,000 Understated by depreciation expense
D) $4,000 Understated by depreciation expense and $2,000 Understated by beginning inventory
Q3) A change in an accounting estimate should be reported on the financial statements on a retrospective basis.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Financial Instruments: Investments in Bonds and Equity Securities
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/57512
Sample Questions
Q1) Return on total assets is generally considered to be a better measure of the overall profit performance of a business than is profit margin on sales.
A)True
B)False
Q2) The amount of working capital would not be affected by which of the following transactions?
A) Sale of long-term investments for cash at a loss
B) Transfer of a long-term investment for cash
C) Issuance of a long-term note in exchange for cash
D) Issuance of common shares of the corporation in exchange for noncurrent assets
E) All of these choices would affect working capital
Q3) The negotiating of a collective agreement is a contractual decision that may necessitate the use of financial analysis.
A)True
B)False
Q4) Book value per share is based upon all voting common and preferred shares. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13