Question 1

An example of an intangible asset classification on a balance sheet is:

Accepted Answer

A)  rights held for a radio licence to the Himalayas. 
B)  shares in BHP Limited. 
C)  improvements to electric cables. 
D)  interest on debentures due to be paid in 2010. 
A)  rights held for a radio licence to the Himalayas. 
B)  shares in BHP Limited. 
C)  improvements to electric cables. 
D)  interest on debentures due to be paid in 2010.

Question 2

The using-up process or utilisation of intangible assets is referred to as:

Accepted Answer

A)  depreciation. 
B)  depletion. 
C)  dilution. 
D)  amortisation. 
A)  depreciation. 
B)  depletion. 
C)  dilution. 
D)  amortisation.

Question 3

Which of the following methods of handling bad debts often potentially leads to an overstatement of assets?

Accepted Answer

A)  Percentage of credit sales method. 
B)  Ageing of accounts receivable method. 
C)  Direct write-off method. 
D)  Allowance for doubtful debts. 
A)  Percentage of credit sales method. 
B)  Ageing of accounts receivable method. 
C)  Direct write-off method. 
D)  Allowance for doubtful debts.

Question 4

Goodwill:

Accepted Answer

A)  is the collective name for the unidentifiable assets of an entity. 
B)  may not be recognised as an asset. 
C)  is the collective name for identifiable assets. 
D)  includes trademarks and brand names. 
A)  is the collective name for the unidentifiable assets of an entity. 
B)  may not be recognised as an asset. 
C)  is the collective name for identifiable assets. 
D)  includes trademarks and brand names.

Question 5

Using the first-in, first-out periodic method, the value of closing inventory is:

Accepted Answer

A)  $4192. 
B)  $3450. 
C)  $2510. 
D)  $4400. 
A)  $4192. 
B)  $3450. 
C)  $2510. 
D)  $4400.

Question 6

You would expect to see the account Work-in-Progress Inventory reported on the balance sheet of a: Manufacturing firm Merchandising firm

Accepted Answer

A)  YesNo 
B)  No No 
C)  YesYes 
D)  No Yes 
A)  YesNo 
B)  No No 
C)  YesYes 
D)  No Yes

Question 7

Items purchased for incorporation into the manufacture or assembly of goods are referred to as raw materials, but they do not constitute inventory until the manufacturing or production process is complete.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following assets cannot be included as unidentifiable intangibles?

Accepted Answer

A)  Customer relations 
B)  Size of the market controlled 
C)  Copyright ownership 
D)  Superior management skills 
A)  Customer relations 
B)  Size of the market controlled 
C)  Copyright ownership 
D)  Superior management skills

Question 9

The net figure for accounts receivable after deducting the allowance for doubtful debts account:

Accepted Answer

A)  represents the expected cash to be collected. 
B)  is a contra account. 
C)  understates the realisable value of accounts receivable. 
D)  overstates the realisable value of accounts receivable. 
A)  represents the expected cash to be collected. 
B)  is a contra account. 
C)  understates the realisable value of accounts receivable. 
D)  overstates the realisable value of accounts receivable.

Question 10

What is the nature of the allowance for doubtful debts account and how does it arise?

Accepted Answer

The allowance for doubtful debts account

Question 11

The failure to allow for uncollectable accounts will cause the owners' equity to be overstated.

Accepted Answer

A) True 
 B)False

Question 12

A machine was purchased for $30 000 with a life expectancy of five years and a zero residual value. Under the straight-line method, the depreciation expense would be calculated at 20% per annum of the cost.

Accepted Answer

A) True 
 B)False

Question 13

When the price of inventory is decreasing, which of the following is true regarding the three best-known inventory valuation methods?

Accepted Answer

A)  The LIFO method will yield the smallest amount for cost of goods sold. 
B)  The weighted-average method will yield the largest amount for closing inventory. 
C)  The FIFO method will yield the highest amount for closing inventory. 
D)  Both LIFO and FIFO will yield a smaller tax obligation than weighted-average. 
A)  The LIFO method will yield the smallest amount for cost of goods sold. 
B)  The weighted-average method will yield the largest amount for closing inventory. 
C)  The FIFO method will yield the highest amount for closing inventory. 
D)  Both LIFO and FIFO will yield a smaller tax obligation than weighted-average.

Question 14

Depreciation refers to the systematic allocation of the depreciable amount of a depreciable asset over its useful life.

Accepted Answer

A) True 
 B)False

Question 15

Assuming that the allowance for doubtful debts method of accounting for bad debts is used, when a customer's account is determined to be a bad debt, which of the following will occur?

Accepted Answer

A)  Bad debts expense is increased, allowance for doubtful debts is decreased. 
B)  Allowance for doubtful debts is reduced, accounts receivable is reduced. 
C)  Allowance for doubtful debts is reduced, bad debts expense is reduced. 
D)  Allowance for doubtful debts is reduced, accounts payable is increased. 
A)  Bad debts expense is increased, allowance for doubtful debts is decreased. 
B)  Allowance for doubtful debts is reduced, accounts receivable is reduced. 
C)  Allowance for doubtful debts is reduced, bad debts expense is reduced. 
D)  Allowance for doubtful debts is reduced, accounts payable is increased.

Question 16

How is accumulated depreciation reported in the financial statements? On the Under the category of

Accepted Answer

A)  balance sheet assets 
B)  balance sheet liabilities 
C)  statement of comp income revenues 
D)  statement of comp income expenses 
A)  balance sheet assets 
B)  balance sheet liabilities 
C)  statement of comp income revenues 
D)  statement of comp income expenses

Question 17

J. Q. Adams Co. had beginning inventory of 50 units with a total cost of $1000. During the period, J. Q. Adams first purchased 20 units for $800 and then 30 units for $1800. The company uses the LIFO periodic method of costing inventory. If a physical count of ending inventory showed 45 units, at what amount would they be valued on the balance sheet?

Accepted Answer

A)  $1620 
B)  $900 
C)  $2400 
D)  $3600 
A)  $1620 
B)  $900 
C)  $2400 
D)  $3600

Question 18

How would the composition of the inventory reported in the balance sheet of a retail organisation, such as Woolworths, be similar to that of a manufacturing entity, and in what way(s) would it differ?

Accepted Answer

The inventory of both types of entity wo

Question 19

Using the last-in, first-out periodic method, the value of closing inventory is:

Accepted Answer

A)  $4400. 
B)  $4192. 
C)  $1840. 
D)  $3460. 
A)  $4400. 
B)  $4192. 
C)  $1840. 
D)  $3460.

Question 20

The Allowance for Doubtful Debts is classified on the:

Accepted Answer

A)  statement of comprehensive income as an expense. 
B)  statement of comprehensive income as revenue. 
C)  balance sheet as a liability. 
D)  balance sheet as a deduction to an asset. 
A)  statement of comprehensive income as an expense. 
B)  statement of comprehensive income as revenue. 
C)  balance sheet as a liability. 
D)  balance sheet as a deduction to an asset.

An example of an intangible asset classification on a balance sheet is:

The using-up process or utilisation of intangible assets is referred to as:

Which of the following methods of handling bad debts often potentially leads to an overstatement of assets?

Goodwill:

Using the first-in, first-out periodic method, the value of closing inventory is:

You would expect to see the account Work-in-Progress Inventory reported on the balance sheet of a: Manufacturing firm Merchandising firm

Items purchased for incorporation into the manufacture or assembly of goods are referred to as raw materials, but they do not constitute inventory until the manufacturing or production process is complete.

Which of the following assets cannot be included as unidentifiable intangibles?

The net figure for accounts receivable after deducting the allowance for doubtful debts account:

What is the nature of the allowance for doubtful debts account and how does it arise?

The failure to allow for uncollectable accounts will cause the owners' equity to be overstated.

A machine was purchased for $30 000 with a life expectancy of five years and a zero residual value. Under the straight-line method, the depreciation expense would be calculated at 20% per annum of the cost.

When the price of inventory is decreasing, which of the following is true regarding the three best-known inventory valuation methods?

Depreciation refers to the systematic allocation of the depreciable amount of a depreciable asset over its useful life.

Assuming that the allowance for doubtful debts method of accounting for bad debts is used, when a customer's account is determined to be a bad debt, which of the following will occur?

How is accumulated depreciation reported in the financial statements? On the Under the category of

How would the composition of the inventory reported in the balance sheet of a retail organisation, such as Woolworths, be similar to that of a manufacturing entity, and in what way(s) would it differ?

Using the last-in, first-out periodic method, the value of closing inventory is:

The Allowance for Doubtful Debts is classified on the:

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

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Exam 8: Accounting for Selected Assets

An example of an intangible asset classification on a balance sheet is:

The using-up process or utilisation of intangible assets is referred to as:

Which of the following methods of handling bad debts often potentially leads to an overstatement of assets?

Goodwill:

Using the first-in, first-out periodic method, the value of closing inventory is:

You would expect to see the account Work-in-Progress Inventory reported on the balance sheet of a: Manufacturing firm Merchandising firm

Items purchased for incorporation into the manufacture or assembly of goods are referred to as raw materials, but they do not constitute inventory until the manufacturing or production process is complete.

Which of the following assets cannot be included as unidentifiable intangibles?

The net figure for accounts receivable after deducting the allowance for doubtful debts account:

What is the nature of the allowance for doubtful debts account and how does it arise?

The failure to allow for uncollectable accounts will cause the owners' equity to be overstated.

A machine was purchased for $30 000 with a life expectancy of five years and a zero residual value. Under the straight-line method, the depreciation expense would be calculated at 20% per annum of the cost.

When the price of inventory is decreasing, which of the following is true regarding the three best-known inventory valuation methods?

Depreciation refers to the systematic allocation of the depreciable amount of a depreciable asset over its useful life.

Assuming that the allowance for doubtful debts method of accounting for bad debts is used, when a customer's account is determined to be a bad debt, which of the following will occur?

How is accumulated depreciation reported in the financial statements? On the Under the category of

How would the composition of the inventory reported in the balance sheet of a retail organisation, such as Woolworths, be similar to that of a manufacturing entity, and in what way(s) would it differ?

Using the last-in, first-out periodic method, the value of closing inventory is:

The Allowance for Doubtful Debts is classified on the:

Introduction to Accounting

Types of Organisations and the Financial Reporting Framework

Ethics and Corporate Governance

Wealth and the Measurement of Profit

Presentation of Financial Position and the Worksheet

Presentation of Financial Performance and the Worksheet

Presentation of Cash Flows

Liabilities and Sources of Financing

Financial Statement Analysis

Worksheet to Debits and Credits

An Introduction to Management Accounting: a Strategic Perspective

Performance Measurement and the Balanced Scorecard

Costs and Cost Behaviour

Budgets

Cost-Volume-Profit Analysis

Accounting for Decision Making: With and Without Resource Constraints

Capital Investment Decisions

Filters