6. Marck Co. holds a 30% stake in Club Co. which was purchased in 2020 at a cost of P 3,000,000. Marck Co has significant Influent over Club Co. After applying the equity method, the Investment in Club Co. account has a balance of P 3,040,000. At December 31, 2020 the fair value of the investment is P 3,120,000. Which of the following values is acceptable for Marck to use in its balance sheet at December 31, 2020?

I. P 3,000,000

II. P 3,040,000

III. P 3,120,000

Group of answer choices

a. II only.

b. I, II, or III.

c. II or III only.

d. I or II only.

7. Which of the following is correct about the effective-interest method of amortization?

Group of answer choices

a. Amortization of a premium decreases from period to period.

b. The effective-interest method produces a constant rate of return on the book value of the investment from period to period.

c. The effective interest method applied to investments in debt securities is different from that applied to bonds payable.

d. Amortization of a discount decreases from period to period.

8. An investor in common stock received dividends in excess of the investor's share of investee's earnings subsequent to the date of the investment. How will the investor's investment account be affected by those dividends for each of the following investments? (1) Financial asset at fair value and

(2) Investment in Associates

Group of answer choices

a. Decrease & No effect

b. No effect & No effect

c. No effect & Decrease

d. Decrease & Decrease

9. Goods shipped FOB Shipping point at year-end should ordinarily be included in

Group of answer choices

a. The inventory of the buyer

b. Both the inventory of buyer and inventory of seller

c. The inventory of the seller

d. Neither the inventory of the buyer nor the inventory of the seller

10.Product costs are:

Group of answer choices

a. subtracted from cost of goods sold.

b. treated in the same manner as period costs.

c. inventoried.

d. expensed when incurred.

11. Under IFRS, the specific identification method of accounting for inventory is required for

Group of answer choices

a. All inventory items

b. Inventory items which are interchangeable.

c. Biological (agricultural) inventories.

d. Inventory items that are not interchangeable and goods that are produced and segregated for specific projects.

12.According to the net method, which of the following items should be included in the cost of inventory?

(1) Freight costs and (2) Purchase discounts not taken

Group of answer choices

a. Yes and Yes

b. No and Yes

c. No and No

d. Yes and No

13.This cost formula would most likely reflect the current prices of ending inventory at year-end

a. Standard costing

b. FIFO

c. Weighted average

d. Moving average

14. What is the method of accounting for inventory in which the cost of goods sold is recorded each a time a sale is made?

Group of answer choices

a. Periodic inventory system

b. Perpetual inventory system

c. Professional inventory system

d. Planned inventory System

15. Which of the following is not true about accounting for inventory under IFRS?

Group of answer choices

a. FIFO is allowed.

b. The weighted-average method is acceptable.

c. Inventories are always valued at net realizable value.

d. Interest costs may be capitalized if there is a lengthy production period to prepare goods for sale