Question 1

Under IAS 2, what adjustment needs to be made after an inventory write-down if the selling price subsequently increases?

Accepted Answer

A)  No adjustment is necessary. Once inventory is written down, it cannot be increased under IASB standards. 
B)  It should be sold at the replacement cost. 
C)  The inventory write-down should be reversed to bring it in line with the new net realizable value. 
D)  Recovery of inventory loss should be debited to reflect the increase in inventory value. 
A)  No adjustment is necessary. Once inventory is written down, it cannot be increased under IASB standards. 
B)  It should be sold at the replacement cost. 
C)  The inventory write-down should be reversed to bring it in line with the new net realizable value. 
D)  Recovery of inventory loss should be debited to reflect the increase in inventory value.

Question 2

The following inventory information was taken from the records of Kleinfeld Inc.:   Under U.S. GAAP, what should the balance sheet report for Inventory?

Accepted Answer

A)  $9,000 
B)  $8,500 
C)  $7,000 
D)  $10,000 
A)  $9,000 
B)  $8,500 
C)  $7,000 
D)  $10,000

Question 3

How is control determined when a parent company does not own a majority of the voting stock of a subsidiary?

Accepted Answer

A)  Controlling the subsidiary's investing activities. 
B)  Controlling the subsidiary's operating activities. 
C)  Controlling the subsidiary's financing activities. 
D)  Criteria that establish effective control include control of the subsidiary's senior management or board of directors, the control of the subsidiary's operating, investing, or financing activities, and the right to obtain control by buying more shares after a triggering event. 
A)  Controlling the subsidiary's investing activities. 
B)  Controlling the subsidiary's operating activities. 
C)  Controlling the subsidiary's financing activities. 
D)  Criteria that establish effective control include control of the subsidiary's senior management or board of directors, the control of the subsidiary's operating, investing, or financing activities, and the right to obtain control by buying more shares after a triggering event.

Question 4

Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, the discounted expected future cash flows was $51,000, and the selling price was $53,000, what is the amount of impairment loss?

Accepted Answer

A)  $5,000 
B)  $3,000 
C)  $1,000 
D)  $0 
A)  $5,000 
B)  $3,000 
C)  $1,000 
D)  $0

Question 5

A "bottom-up" test and "top-down" test must be applied under IASB standards to determine:

Accepted Answer

A)  impairment of tangible fixed assets. 
B)  impairment of patents. 
C)  impairment of goodwill. 
D)  allocation of overhead costs. 
A)  impairment of tangible fixed assets. 
B)  impairment of patents. 
C)  impairment of goodwill. 
D)  allocation of overhead costs.

Question 6

The following information was taken from the fixed asset records of Bosco Ltd. as of December 31, 2010:   Using IAS 36, what is the amount of impairment loss?

Accepted Answer

A)  €18,000 
B)  €37,000 
C)  €15,000 
D)  €25,000 
A)  €18,000 
B)  €37,000 
C)  €15,000 
D)  €25,000

Question 7

Under IAS 38, which of the following items is specifically EXCLUDED from being recognized as an internally generated intangible asset?

Accepted Answer

A)  Computer software costs 
B)  Copyrights 
C)  Customer lists 
D)  Motion picture films 
A)  Computer software costs 
B)  Copyrights 
C)  Customer lists 
D)  Motion picture films

Question 8

Memphis Ltd. purchased a building in 2015 for €11,000,000 and as of December 31, 2018 had recorded accumulated depreciation on the building of €4,000,000. On December 31, 2018, the company conducted its first revaluation when the fair value was €27,000,000. Under IAS 16, the journal entry recorded on this date would include:

Accepted Answer

A)  a credit to Revaluation Surplus-Building for €20,000,000. 
B)  a debit to Revaluation Surplus-Building for €14,000,000. 
C)  a debit to Loss on Revaluation-Building for €14,000,000. 
D)  a credit to Loss on Revaluation-Building for €20,000,000. 
A)  a credit to Revaluation Surplus-Building for €20,000,000. 
B)  a debit to Revaluation Surplus-Building for €14,000,000. 
C)  a debit to Loss on Revaluation-Building for €14,000,000. 
D)  a credit to Loss on Revaluation-Building for €20,000,000.

Under IAS 2, what adjustment needs to be made after an inventory write-down if the selling price subsequently increases?

The following inventory information was taken from the records of Kleinfeld Inc.: Under U.S. GAAP, what should the balance sheet report for Inventory?

How is control determined when a parent company does not own a majority of the voting stock of a subsidiary?

Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, the discounted expected future cash flows was $51,000, and the selling price was $53,000, what is the amount of impairment loss?

A "bottom-up" test and "top-down" test must be applied under IASB standards to determine:

The following information was taken from the fixed asset records of Bosco Ltd. as of December 31, 2010: Using IAS 36, what is the amount of impairment loss?

Under IAS 38, which of the following items is specifically EXCLUDED from being recognized as an internally generated intangible asset?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part II

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

International Taxation

International Transfer Pricing

Management Accounting Issues in Multinational Corporations

Auditing and Corporate Governance: An International Perspective

International Sustainability Reporting

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Exam 4: International Financial Reporting Standards: Part I

Under IAS 2, what adjustment needs to be made after an inventory write-down if the selling price subsequently increases?

The following inventory information was taken from the records of Kleinfeld Inc.: Under U.S. GAAP, what should the balance sheet report for Inventory?

How is control determined when a parent company does not own a majority of the voting stock of a subsidiary?

Under U.S. GAAP, if the carrying value of a fixed asset was $50,000, the undiscounted expected future cash flows was $55,000, the discounted expected future cash flows was $51,000, and the selling price was $53,000, what is the amount of impairment loss?

A "bottom-up" test and "top-down" test must be applied under IASB standards to determine:

The following information was taken from the fixed asset records of Bosco Ltd. as of December 31, 2010: Using IAS 36, what is the amount of impairment loss?

Under IAS 38, which of the following items is specifically EXCLUDED from being recognized as an internally generated intangible asset?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part II

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

International Taxation

International Transfer Pricing

Management Accounting Issues in Multinational Corporations

Auditing and Corporate Governance: An International Perspective

International Sustainability Reporting

Filters