1) The primary IFRS related to property, plant and equipment is found in
a.IAS 1 and IAS 34
b.IAS 11 and IAS 17
c.IAS 16 and IAS 23
d.IAS 27 and IAS 39
2) In order to properly record a direct-financing lease, the lessor needs to know how to
calculate the lease receivable. The lease receivable in a direct-financing lease is best
defined as
a.the amount of funds the lessor has tied up in the asset which is the subject of the
direct-financing lease
b.the difference between the lease payments receivable and the fair value of the leased
property
c.the present value of minimum lease payments
d.the total book value of the asset less any accumulated depreciation recorded by the
lessor prior to the lease agreement
3) Torque Co. has equipment with a carrying amount of $1,600,000. The expected
future net cash flows from the equipment are $1,630,000, and its fair value is
$1,360,000. The equipment is expected to be used in operations in the future. What
amount (if any) should Torque report as an impairment to its equipment?
a.No impairment should be reported
b.$240,000
c.$30,000
d.$270,000
4) A company should immediately recognize:
a.any gain when it makes a bargain purchase
b.any loss when it ignorantly pays too much for an asset originally
c.any gain when it constructs a piece of equipment at a cost savings
d.any loss when it receives any asset lower than its book value
5) The characteristic that is demonstrated when a high degree of consensus can be
secured among independent measurers using the same measurement methods is
a.relevance
b.faithful representation
c.verifiability
d.neutrality
6) Termination of an assets service due to theft, fire, etc, is called:
a.special assessment
b.nonreciprocal transfers
c.speculation
d.involuntary conversion
7) Companies that are listed on a stock exchange are required to submit their financial
statements to the
a.AICPA
b.APB
c.FASB
d.SEC
8) Given below are the future value factors for 1 at 8% for one to five periods.
PeriodsFuture Value of 1 at 8%
11.080
21.166
31.260
41.360
51.469
What amount will be in a bank account three years from now if $8,000 is invested each
year for four years with the first investment to be made today?
a.($8,000 x 1.260) + ($8,000 x 1.166) + ($8,000 x 1.080) + $8,000
b.$8,000 x 1.360 x 4
c.($8,000 x 1.080) + ($8,000 x 1.166) + ($8,000 x 1.260) + ($8,000 x 1.360)
d.$8,000 x 1.080 x 4
9) Which of the following organizations is not among the four international
standard-setting organizations?
a.The International Accounting Standards Committee Foundation (IASCF)
b.The Standards Advisory Council (SAC)
c.The International Financial Reporting Interpretations Committee (IFRIC)
d.The Financial Executives Institute (FEI)
10) Harrison Company has a loan receivable with a carrying value of $15,000 at
December 31, 2013 . On January 3, 2014, the borrower, Thomas Clark Imports,
declares bankruptcy, and Harrison estimates that it will collect only 60% of the loan
balance.
Which of the following entries would Harrison make to record the impairment under
IFRS?
a. Loan Receivable9,000
Impairment Loss9,000
b.Loan Recovery Expense6,000
Loan Receivable6,000
c.Impairment Loss9,000
Loan Receivable9,000
d.Impairment Loss6,000
Loan Receivable6,000
11) Which of the following is a nominal (temporary) account?
a.Unearned Service Revenue
b.Salaries and Wages Expense
c.Inventory
d.Retained Earnings
12) Which of the following intangible assets should not be amortized?
a.Copyrights
b.Customer lists
c.Perpetual franchises
d.All of these intangible assets should be amortized
13) When preparing a statement of cash flows (indirect method), an increase in ending
inventory over beginning inventory will result in an adjustment to reported net earnings
because
a.cash was increased while cost of goods sold was decreased
b.cost of goods sold on an accrual basis is lower than on a cash basis
c.acquisition of inventory is an investment activity
d.inventory purchased during the period was less than inventory sold resulting in a net
cash increase
14) On January 2, 2014, Klein Co. bought a trademark from Royce, Inc. for $1,600,000.
An independent research company estimated that the remaining useful life of the
trademark was 10 years. Its unamortized cost on Royces books was $1,200,000. In
Kleins 2014 income statement, what amount should be reported as amortization
expense?
a.$160,000
b.$120,000
c.$ 80,000
d.$ 60,000
15) In a corporate form of business organization, legal capital is best defined as
a.the amount of capital the state of incorporation allows the company to accumulate
over its existence
b.the par value of all capital stock issued
c.the amount of capital the federal government allows a corporation to generate
d.the total capital raised by a corporation within the limits set by the Securities and
Exchange Commission
16) Malone Corporation uses the perpetual inventory method. On March 1, it purchased
$60,000 of inventory, terms 2/10, n/30. On March 3, Malone returned goods that cost
$6,000. On March 9, Malone paid the supplier. On March 9, Malone should credit
a.purchase discounts for $1,200
b.inventory for $1,200
c.purchase discounts for $1,080
d.inventory for $1,080
17) An accrued expense can best be described as an amount
a.paid and currently matched with earnings
b.paid and not currently matched with earnings
c.not paid and not currently matched with earnings
d.not paid and currently matched with earnings