Question
1. Goods in transit which are shipped with terms FOB shipping point should be A. Included in the inventory of the buyer. B. Excluded from
1. Goods in transit which are shipped with terms FOB shipping point should be
A. Included in the inventory of the buyer.
B. Excluded from the inventory of the buyer.
C. Included in the inventory of the shipping company.
D. Included in the inventory of the seller.
2. ABC Printing Company determines that a printing press used in tis operations has suffered a permanent impairment in value because of technological changes. The entry to record the impairment should
A. Include a credit to the equipment account.
B. Recognize an extraordinary loss for the period.
C. Not be made if the equipment is still being used.
D. Include a credit to the equipment accumulated impairment losses account.
3. Share of dividends of different class are recorded in what manner?
A. By memorandum entry only.
B. By debiting a new investment account and crediting the original investment account.
C. By debiting the investment account and crediting dividend income at the total par value of the shares to be received.
D. By debiting the investment account and crediting dividend income at the total fair value of the shares to be received.
4. Which of the following is not included in cost to sell as defined in IAS 41 Agriculture?
A. Levies by regulatory authorities.
B. Transportation costs.
C. Commission to brokers.
D. Transfer taxes and duties.
5. The following statements relate to cash. Which statement is false?
A. Classification of a restricted cash balance as current or noncurrent should parallel the classification of the related obligation for which the cash was restricted.
B. Cash equivalents are short-term highly liquid investments that are readily convertible into cash and so near their maturity that they represent insignificant risk of changes in value because of changes in interest rates.
C. Legally restricted bank deposit held as compensating balance should be segregated from the cash account reported as current or noncurrent depending on the term of the related loan.
D. A six-month money market placement with remaining maturity of two months on balance sheet date should be classified as cash equivalents.
6. All of the following are considered research and development activities, except
A. Design of tools, jigs, molds and dies involving new technology.
B. Activities aimed at obtaining new knowledge.
C. Routine on-going effort, enrich or improve quality of an existing product.
D. Search for, evaluation and final selection of, applications of research findings or other knowledge.
7. Which of the following is correct about non-trade receivables being classified as current asset?
A. Non-trade receivables are classified as current assets if these are collectible within one-year or the company's normal operating cycle, whichever is longer.
B. Non-trade receivables are classified as current assets if these are collectible within the company's normal operating cycle.
C. Non-trade receivables are classified as current assets if these are collectible within one year.
D. Non-trade receivables are classified as current assets if these are collectible within one-year or the company's normal operating cycle, whichever is shorter.
8. The diminishing balance method of depreciation results in
A. Increasing charge over the useful life of the asset.
B. Constant charge over the useful life of the asset if the residual value does not change.
C. Variable charge based on the expected use or output.
D. Decreasing charge over the useful life of the asset.
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