Financial Accounting Test 2
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This Quiz is to test your accounting information, its an advanced questions. After you finish, you will review your answers before submit and then you will get your result with analysis & correct answer. Financial Accounting Test 1:https://www. Proprofs. Com/quiz-school/story. Php? Title=financial-accounti ng-test-1All the best. Best Regards,,,Yassir Derbas[email protected] /* */https://kw. Linkedin. Com/pub/yassir-derbas-cma-candidate/67/616/940
- 1.In 2007, XYZ Company had a net loss of $160,000 and reported the following:Dividends paid: $40,000Depreciation expense: $30,000Increase in accounts payable: $15,000Issuance of stock: $100,000Retirement of debt: $50,000Given this data, the amount of cash flow from operations was:
- 2.
- A.
No, because its not permit to offsetting of assets and liabilities unless is it allowed by another standard.
- B.
Yes, because this situation is not offsetting.
- C.
Yes, because in this case, offsetting leads to better understanding of the financial statements by their users.
- D.
No, because the assets and liabilities shall not be offset.
- 3.A company sold machine for USD 4,000. The machine’s carrying amount was USD 1,500 and before sale, the company incurred cost of USD 200 to clean the machine. How will this transaction be recognized in the company’s financial statements?
- A.
Gain on machine’s disposal of USD 2,300.
- B.
Gain on machine’s disposal of 2,500 and other operating expenses of USD 200.
- C.
Operating revenue of USD 4,000 and other operating expenses of USD 200. Machine’s carrying amount is included in the annual depreciation charge.
- D.
Net operating revenue of USD 3,800. Machine’s carrying amount is included in the annual depreciation charge.
- 4.What are the examples of derivatives?
- A.
Futures, forward contracts, swaps, written warrants.
- B.
Futures, forward contracts, swaps, options.
- C.
Futures, forward contracts, options, treasury shares, swaps.
- D.
Futures, preference shares, options, swaps.
- 5.If the Co. received check from a customer for USD 1,000 on 31 Dec, 20x1 but not deposited until next day, the amount will be considered on 31 Dec, 20x1 as an accounts receivable.
- A.
True
- B.
False
- 6.In the statement of Cash Flow, once the AR increasing it should be [Blank] (added, deducted) from the net profit, and once the AP decreasing it should be [Blank] (added, deducted) from the net profit, if the inventory increased it means [Blank] (gave, took) money from the Co. and if the current liabilities increased it means [Blank] (gave, took) money from the Co.
- 7.How shall an impairment loss be recognized in the financial statements?
- A.
Immediately in profit or loss.
- B.
Immediately in profit or loss unless the asset is carried at revalued amount.
- C.
In profit or loss on the straight-line basis over the asset’s remaining useful life.
- D.
Immediately in other comprehensive income.
- 8.Which of the following items would you classify as cash or cash equivalents?
- A.
Petty cash, bank account balance, short-term investments readily convertible to cash which are subject to insignificant risk of changes in value.
- B.
Petty cash, bank account balance, term deposit due in 5 months.
- C.
Petty cash, bank account balance, term deposit, debentures convertible within 6 months.
- D.
Petty cash, bank account balance, term deposit due in 5 months, short-term investments readily convertible to cash which are subject to insignificant risk of changes in value.
- 9.
- A.
Major research and feasibility study performed in order to assess planned development of intangible asset – software.
- B.
Inventories that necessarily take a substantial period of time to get ready for its intended use or sale, for example, whiskey.
- C.
Development of software intended for future resale.
- D.
Self-constructed building.
- 10.Losses from inventory due to theft, evaporation, and waste are called:
- A.
Average cost.
- B.
Realization.
- C.
Shrinkage.
- D.
Costing.
- 11.Which of the following is NOT an example of a period expense?
- A.
Administrative costs.
- B.
Inventory Costs.
- C.
Accounting Costs.
- D.
Selling Costs.
- 12.The unusually revenue is the revenue that has been generated from activity not related to the nature activity of the company like: selling assets.
- A.
True
- B.
False
- 13.
- A.
Assets and liabilities are both understated.
- B.
Assets are understated and liabilities are overstated.
- C.
Assets and shareholders' equity are both understated.
- D.
Assets, liabilities, and shareholders' equity are all correctly stated.
- 14.The precise definition to the bank reconciliation is to find the discrepancies between bank's balance and Company's balance due to timing.
- A.
True
- B.
False
- 15.Which of the following assets is a monetary asset?
- A.
Patent.
- B.
Land.
- C.
Inventory.
- D.
Account Receivable.
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