Multiple Choice Questions:

1. On July 1, 2014, Linden Company purchased the copyright to Norman Computer Tutorials for $140,000. It is estimated that the copyright will have a useful life of 5 years. The amount of Amortization Expense recognized for the year 2014 would be

a) $13,125

b) $28,000

c) $25,900

d) $14,000

2. The first payment Thayer Company purchased a building on January 2 by signing a long-term $2,520,000 mortgage with monthly payments of $23,100. The mortgage carries an interest rate of 10 percent. The amount owed on the mortgage after will be

a) $2,520,000

b) $2,499,000

c) $2,517,900

d) $2,496,900

3. A company has an average inventory on hand of $75,000 and its average days in inventory are 36.5 days. What is the cost of goods sold?

a) $750,000

b) $876,000

c) $1,752,000

d) $1,680,000

4. All of the following situations below might indicate a company has a low quality of earnings except

a) A lack of disclosure about guaranteed payments that were mentioned in the MD&A of the annual report.

b) Revenue is recognized when earned.

c) Maintenance costs are capitalized and then depreciated.

d) Adoption of a different inventory method for each of the last three years.

4. IFRS

a) Implies that receivables with different characteristics should be reported separately.

b) Requires that receivables with different characteristics should be reported separately.

c) Implies that receivables with different characteristics should be reported as one unsegregated amount.

d) Requires that receivables with different characteristics should be reported as one unsegregated amount.