Intermediate Accounting Test Preparation
Course Introduction
Intermediate Accounting provides a comprehensive exploration of the principles, concepts, and applications underlying the preparation and analysis of financial statements. Building on foundational accounting knowledge, this course delves into complex topics such as revenue recognition, inventory valuation, long-term assets, liabilities, and stockholders equity. Students will engage with real-world scenarios and current accounting standards (such as IFRS and GAAP), developing skills to analyze and communicate financial information effectively. The course prepares students for advanced study in accounting and equips them with the technical competence required for professional practice in the field.
Recommended Textbook
Advanced Accounting Updated 1st Canadian Edition by Gail Fayerman
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10 Chapters
580 Verified Questions
580 Flashcards
Source URL: https://quizplus.com/study-set/3370
Page 2
Chapter 1: Accounting for Investments
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56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/66911
Sample Questions
Q1) When reflecting an investment using the cost method, the investment is initially recorded at cost and the balance is not adjusted in subsequent periods unless there is an impairment.
A)True
B)False Answer: True
Q2) Companies invest in non-strategic investments to obtain a higher return than holding cash in a bank account.
A)True
B)False Answer: True
Q3) A company is a party to a joint venture when it does not have the rights to the assets or the obligations for the liabilities.
A)True
B)False Answer: True
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Chapter 2: Business Combinations
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55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/66910
Sample Questions
Q1) Whaley Company assigned goodwill of $60,000 to one of the reporting divisions of Rory company when it initially acquired it. Four years later the following information for this division follows: \(\begin{array}{|l|r|r|}\hline&\text { Carrying Amount }&\text { Fair value}\\
\hline \text { Cash } & \$ 20,000 & \$ 20,000 \\
\hline \text { Inventory } & 35,000 & 40,000 \\
\hline \text { Equipment } & 125,000 & 160,000 \\
\hline \text { Goodwill } & 60,000 & \\
\hline \text { Accounts Payable } & 30,000 & 30,000 \\ \hline
\end{array}\) Based on the preceding information, what amount of goodwill will be reported for this division if its fair value of the division is now determined to be $200,000?
A)$0
B)$60,000
C)$30,000
D)$10,000
Answer: D
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Page 4
Chapter 3: Consolidation: Wholly Owned Subsidiaries
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56 Verified Questions
56 Flashcards
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Sample Questions
Q1) Which of the following statements regarding consolidated financial statements at the date of acquistion is FALSE?
A)At the day of acquisition, there is a need to prepare a consolidated statement of income.
B)Regarding the equity accounts, only the parent's balances are carried into the consolidated statement of financial position.
C)At acquisition date, all the equity of the subsidiary is pre-acquisition and eliminated.
D)The assets and liabilities of the subsidiary are carried forward into the consolidated statement of financial position at fair value.
Answer: A
Q2) Since taxes are paid by the individual companies, the CCA claim for the acquiree is based on the amount recorded in the records of the ____________.
A)acquirer.
B)acquiree and acquirer.
C)acquiree.
D)consolidated entity.
Answer: C
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Chapter 4: Consolidations: Intragroup Transactions
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66 Verified Questions
66 Flashcards
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Sample Questions
Q1) Quick Company owns all of the outstanding shares of Peanut Ltd. During the year, Peanut Ltd. declared and paid a dividend of $10,000. The tax rate is 30% for both entities. In preparation for the year-end consolidated financial statements, what are the consolidated financial statement adjustments required?
A)Decrease Dividend Revenue: $10,000, decrease Dividend Declared and Paid: $10,000, decrease Income Tax Expense: $3,000, and decrease Income Tax Payable: $3,000.
B)Increase Dividend Revenue: $10,000, increase Dividend Declared and Paid: $10,000, increase Income Tax Expense: $3,000, and increase Income Tax Payable: $3,000.
C)Decrease Dividend Revenue: $10,000, decrease Dividend Declared and Paid: $10,000.
D)Increase Dividend Revenue: $10,000, increase Dividend Declared and Paid: $10,000.
Q2) It is possible for an entity to acquire the bonds of another entity in the group on the open market.
A)True B)False
Q3) Why are intragroup transactions eliminated?
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Chapter 5: Consolidation: Non-Controlling Interest
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61 Verified Questions
61 Flashcards
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Sample Questions
Q1) What is the purpose of showing an allocation of the net income between the parent and the subsidiary companies on the consolidated statement of comprehensive income?
A)To report the net income of the subsidiary company to its shareholders.
B)To report the net income of the parent and subsidiary companies to their respective shareholders.
C)To report the net income of the parent and subsidiary companies to the tax department.
D)To report the net income of the parent company to its shareholders.
Q2) Whereas the goodwill of the subsidiary may be determined by calculating the goodwill acquired by the parent entity and then adding the fair value of the NCI, this process is not applicable for a gain on bargain purchase.
A)True
B)False
Q3) Why is the calculation of the NCI necessary for both for the Statement of Changes in Equity and for the Statement of Financial Position?
Q4) Discuss the implications of a gain on bargain purchase for the non-controlling interest.
Q5) What does the "group" consist of under the entity concept of consolidation?
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Chapter 6: Accounting for Investments in Associates and Joint Ventures
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) The difference between the fair value and the ___________ value of the investment at the day of a second acquisition of the same shares, is a gain or loss through the profit and loss of the entity.
A)book
B)carrying
C)current
D)future.
Q2) What are the principles for adjusting for the effects of intercompany transactions under IAS 28?
Q3) The maximum difference between the ends of the reporting periods of the entity and the associate or joint venture can be no more than:
A)1 month
B)3 months
C)6 months
D)12 months.
Q4) Describe how investments in associates and joint ventures are accounted for by a parent entity, which will and will not prepare consolidated financial statements.
Q5) Describe how to account for losses incurred by associate and joint venturers.
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Chapter 7: Accounting for Foreign Currency
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) Which of the following list would not be effective as a hedge for a Canadian company with a large number of transactions in Denmark?
A)Danish krone held by a Canadian bank.
B)A forward contract for the purchase of Danish krone.
C)A forward contract for the sale of Danish krone.
D)Canadian funds held by a Danish bank.
Q2) Monetary items are translated using the exchange rate at the balance sheet date.
A)True
B)False
Q3) Functional currency is the currency in which the company conducts its primary business activity.
A)True
B)False
Q4) A transaction gain or loss at the settlement date is a change in the exchange rate quoted by a foreign exchange trader.
A)True
B)False
Q5) How does a company establish the currency in which its books and records should be maintained?
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Chapter 8: Accounting for Foreign Investments
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56 Verified Questions
56 Flashcards
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Sample Questions
Q1) Consolidation adjustments must be restated to the presentation currency.
A)True
B)False
Q2) Which of the following statements relating to a functional currency is FALSE?
A)Functional currency is determined on an entity by entity basis
B)Functional currency is a reflection of the primary economic environment in which an entity operates.
C)The primary economic environment is the one in which an entity primarily generates and expends cash.
D)In order to determine what is considered to be a "functional currency," it is imperative that a "foreign currency" be first identified.
Q3) Fair value adjustments must be reflected on the balance sheet at the closing rate for the year.
A)True
B)False
Q4) How is the translation of the financial statements into a presentation currency completed?
Q5) When would a change in the functional currency of an entity occur, and how is it accounted for?
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Chapter 9: Reporting for Not-For-Profit Organizations
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57 Verified Questions
57 Flashcards
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Sample Questions
Q1) When is it NOT appropriate to use an encumbrance system?
A)When only a small part of expenditures for goods and services are discretionary.
B)When there is a significant lag between purchase orders and the receipt of goods.
C)When reporting is done on a yearly basis.
D)When commitments are made on a decentralized basis.
Q2) Kayla made a $150,000 contribution to the Gilliam Society, a not-for-profit organization. Kayla stipulated that his contribution is to be used for the organization's special events program in the next year. How should Gilliam record the contribution at the time of contribution?
A)As contribution revenue.
B)As a prepaid expense.
C)No entry is required.
D)As a deferred contribution.
Q3) A not-for-profit organization may disaggregate its financial statements into funds based on legal, contractual or voluntary actions of the entity.
A)True
B)False
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11
Chapter 10: Reporting for Public Sector Entities
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58 Verified Questions
58 Flashcards
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Sample Questions
Q1) Why is a public sector financial reporting framework needed?
Q2) The CICA PSA Handbook defines a public sector entity's ________________ as assets that could be used to discharge existing liabilities or finance future operations and are not for consumption in the normal course of operations.
A)current assets
B)non-financial assets
C)financial assets
D)tangible capital assets.
Q3) Factors considered to contribute to the reliability of information include all of the following EXCEPT:
A)representational faithfulness
B)completeness
C)neutrality
D)timeliness.
Q4) A government business enterprise sells goods and services to individuals and organizations within the government reporting entity as its principal activity.
A)True
B)False
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