Info
Warning
Danger

Study Resources (Accounting)

Ex. 1-65Professional judgement Explain the principle of professional judgement.When or why might it be necessary to employ professional judgement, even in a rules-based system? Ex. 1-66SOX and standard setting After several highly-publicized accounting scandals in the U.S. such as Enron, Sunbeam, and WorldCom, all of whom, coincidentally, were clients of the now basically.
8 Views
View Answer
31.When deciding whether to recognize a financial statement element (or not), and how to measure it, the accountant should a) always use estimates. b) record “hard” numbers and ignore “soft” numbers. c) determine an acceptable level of uncertainty. d) recognize a financial statement element even if it cannot be measured. 32.During the lifetime of an.
13 Views
View Answer
Ex. 3-76Adjusting entries Present, in journal form, the adjustments that would be made on July 31, 2016, the end of the fiscal year, for each of the following: 1.The supplies inventory on August 1, 2015was $8,350. Supplies costing $16,650 were purchased during the fiscal year and debited to Supplies Inventory. A count.
10 Views
View Answer
Ex. 2-73Control and the economic entity assumption Consolidated financial statements are prepared from the perspective of the economic entity.Determination of which business units, or subsidiaries, are to be included in the entity is rooted in the definition of control.Describe how this concept is interpreted under IFRS and ASPE, respectively.Discuss the significance.
7 Views
View Answer
1.Which of the following is NOT part of the conceptual framework for financial reporting? a) elements of financial statements b) qualitative characteristics of accounting information c) notes to financial statements d) foundationalprinciples 2.Which of the following is NOT an objective of financial reporting? a) to provide information about an entity’s economic resources, obligations and equity/net assets b).
38 Views
View Answer
Ex. 2-63Equitable obligations Due to the current poor economic conditions, InfernoCorp, a medium-size manufacturer in Burnaby, is downsizing its Shipping Dept. and has to let go two of the employees, Chevronand Shell. Both are excellent workers and have been with the company for several years. The Shipping Dept. supervisor, Jo-Ann Roberts,.
9 Views
View Answer
Ex. 2-69Foundational accounting principles and qualitative characteristics –matching Listed below are several foundational accounting principles and qualitative characteristics. Match the letter of each with the appropriate phrase describing its application. Note that each itemmay be used more than once or not at all. a.Economic entity assumptiong.Matching principle b.Going concern assumptionh.Full disclosure principle c.Monetary unit.
8 Views
View Answer
Ex. 3-78 Calculation of expense The records for Jay Inc. showed the following for 2016: Jan 1Dec 31 Accrued expenses...................$2,000$3,600 Prepaid expenses...................900800 Cash paid during the year for expenses..$55,000 Instructions Calculate the total amount of expenses that should be reported on the 2016 statement of comprehensive income. Ex. 3-79 Calculation of revenue The records for Oriole Corp. showed the.
15 Views
View Answer
Pr. 3-99Preparation of Financial Statements Use the following information to prepare a multi-step Statement of Comprehensive Income, a Statement of Changes in Shareholders Equity, and a classified Statement of Financial Position. Charles Corporation Adjusted Trial Balance December 31, 2017 DebitCredit Cash....................................................$ 33,400 Accounts Receivable.......................................87,400 Merchandise Inventory.....................................90,000 Store Supplies............................................  7,000 Store Equipment.......................................... 170,000 Accumulated Depreciation—Store Equipment...................54,000 Delivery Equipment........................................96,000 Accumulated Depreciation—Delivery Equipment.................26,000 Notes Payable............................................82,000 Accounts Payable.........................................117,000 Common Shares..........................................200,000 Retained.
14 Views
View Answer
Ex. 2-65Comprehensive Income Describe the income concept of comprehensive income.That is included in this notion of income under IFRS?What is included in it under ASPE? Ex. 2-66Foundational principles Briefly explain the foundational principles of recognition, measurement, presentation and disclosure that underlie financial accounting. .
8 Views
View Answer
Exercises Ex. 1-45Effective capital allocation Explain the advantages of an effective capital allocation process. Ex 1-46Financial statements in practice and theory What are the four most frequently provided financial statements?Provide two terminologies used to refer to each statement. Ex. 1-47Stakeholders in the financial reporting environment Briefly describe the much-publicized subprime lending crisis in the United States,.
8 Views
View Answer
31.In Canada, the body which is NOT instrumental in the development of financial reporting standards is the a) Accounting Standards Board (AcSB). b) Financial Accounting Standards Board (FASB). c) International Accounting Standards Board (IASB). d) American Institute of Certified Public Accountants. 32.The adoption of International Financial Reporting Standards in Canada is an example of a) the.
10 Views
View Answer
Ex. 3-74Recordable events Before transactions are entered into a corporation's accounting system, the underlying event must be analyzed, to determine how (and if) it should be recorded. The situations below relate to Maxwell Corporation: Instructions Indicate whether the items below are recordable events. 1.A new mortgage contract for its new factory building is signed. 2.The.
12 Views
View Answer
Ex. 3-88Present value of an annuity due How much must be invested now to receive $30,000 for ten years if the first $30,000 is received today and the rate is 8%? PROBLEMS Pr. 3-89Journal Entries Jonathan Green owns Gopher Greenhouses, a gardening centre (as a sole proprietorship). His first year of operations included the.
8 Views
View Answer
158.Using an internet search engine, search for the terms “best of breed” + ERP. Locate information that addresses the debate/dilemma faced by many companies regarding the decision implementing best of breed technology versus new applications from an ERP vendor. Write a brief memo to discuss this issue. .
7 Views
View Answer
11.Performing a service for a client on account will a) increase one asset and decrease another asset. b) decrease an asset and decrease a liability. c) increase an asset and decrease equity. d) increase an asset and increase equity. 12.The account credited for a receipt of cash on account is a) Cash. b) Service Revenue. c) Accounts Receivable. d).
10 Views
View Answer
MULTIPLE CHOICE—Conceptual 1.The business model may be broken down into three activities: a) investing, operating, allocating. b) investing, operating, financing. c) financing, operating, and comprehensive income. d) balance sheet, income statement, cash flow statement. 2.The income statement captures an entity’s a) financing activities. b) investing activities. c) operating activities. d) interrelationship between activities. 3.The “risk/return” trade-off means a) using various techniques to.
15 Views
View Answer
159.Using an internet search engine, search for the terms “big bang” + ERP. Identify at least one company that represents a success story with regard to this ERP implementation method (other than Marathon, as described in the Real World Example). Also identify at least one company that experienced problems with.
8 Views
View Answer
Ex. 2-61Enhancing Qualitative Characteristics Although fundamental qualitative characteristics of relevance and reliability are considered most important, financial statement preparers also place value upon certain enhancing qualitative characteristics.Briefly describe each of these characteristics and their contribution to providing decision-useful accounting information. Ex. 2-62Accounting terminology – fill in the blanks Fill in the blanks below.
10 Views
View Answer
Pr. 3-90Adjusting entries The information shown below relates to Flower Corporation. At December 31, 2017 Flower's general ledger shows the following balances: Prepaid lease.............$7,000Debit Prepaid insurance.........$1200Debit Unearned revenue.........$84,000Credit In addition, the following information is available: 1.The entire amount shown as prepaid lease has expired. 2.One-third of the amount shown as prepaid insurance has expired. 3.Half of the amount.
8 Views
View Answer
45.On September 1, 2017, BrownCorp. made the annual lease payment of $12,000 for its fleet of delivery trucks. The payment covered the period September 1, 2017 to August 31, 2018. Assuming the entire amount had originally been debited to Lease Expense, the required adjustment at December 31, 2017 is a) debit.
12 Views
View Answer
Pr. 3-96 Trial balance correction The Controller of SHD Corporation asks his assistant to correct the company's December 31, 2017 trial balance. The preliminary trial balance, which does not balance, is reproduced below: SHD Corporation Trial Balance December 31, 2017 DebitCredit Cash....................................................$  10,000 Accounts Receivable.......................................15,000 Prepaid Insurance.........................................600 Equipment...............................................40,000 Inventories...............................................9,000 Accounts Payable.........................................$  11,590 Common Shares..........................................110,000 Sales...................................................17,100 Salaries.................................................64,000 Office Supplies............................................2,150 Depreciation Expense......................................2,550_______ $143,300$138,690 The assistant's review uncovered the following errors: 1.The accounts.
9 Views
View Answer
Ex. 2-59Moral hazard In Chapter 1, the issue of information asymmetry, and the concept of moral hazard were introduced.Explain why the moral hazard issue is worse where some users (such as accountants and bankers) have expert knowledge. Ex. 2-60Materiality The concept of materiality if extremely important to the process of financial statement preparation.
8 Views
View Answer
Ex. 1-67Challenges facing financial reporting In North America, the financial reporting environment is changing at a very rapid pace. Briefly describe four challenges facing the accounting profession today. Ex. 1-68Role of executives and management in a post-SOX world SOX introduced sweeping changes to the institutional structure of the accounting profession.What key provision was.
12 Views
View Answer
51.Principles-based GAAP is sometimes criticized for being a) too inflexible. b) too flexible. c) too inconsistent. d) too difficult for the reader to understand. 52.Which of the following situations does NOT demonstrate an attempt at financial engineering? a) creating complex legal arrangements and financial instruments b) structuring debt financing so that it meets the GAAP definition of.
10 Views
View Answer
Pr. 3-98Ten-column work sheet The work sheet and trial balance of Santos Corporation is reproduced below. The information given below is relevant to the preparation of adjusting entries needed to both properly match revenues and expenses for the period and reflect the proper balances in the real and nominal accounts. Instructions As the.
9 Views
View Answer
21.Equitable obligations arise due to a) statutory requirements. b) contractual obligations. c) moral or ethical considerations. d) union agreements. 22.Under IFRS, equity does NOT include a) long term leases. b) common and/or preferred shares. c) accumulated other comprehensive income. d) retained earnings. 23.Gains are defined as a) increases in economic resources resulting from an entity’s ordinary activities. b) decreases in economic resources.
15 Views
View Answer
EXERCISES Ex. 3-72Definitions Define the following terms: 1.Event 2.Work sheet 3.Permanent accounts 4.Temporary accounts 5.Income summary 6.General ledger Ex. 3-73Definitions Provide clear, concise answers for the following: 1.What is the accrualbasis of accounting? 2.What is an accrued expense? 3.What is accrued revenue? 4.What is a prepaid expense? 5.What is unearned revenue? *6. State the rule that indicates which adjusting entries for prepaid and unearned items should.
10 Views
View Answer
11.The overriding criterion by which accounting information can be judged is that of a) usefulness for decision making. b) freedom from bias. c) timeliness. d) comparability. 12.Which statement is correct regarding enhancing qualitative characteristics? a) Full discussion of the information presented is a substitute for comparable information. b) Numbers that are easily verifiable with a reasonable degree.
15 Views
View Answer
Ex. 2-67Identification of foundational accounting principles State the accounting principle or assumption that is most applicable in the following situations: 1.A company prepares consolidated financial statements for a subsidiary that it owns. 2.The decision to remove an asset from the balance sheet 3.A large sale on account is not recognized as revenue because collectability.
7 Views
View Answer
MULTIPLE CHOICE–Conceptual 1.Which of the following statements is true regarding accounting information systems? a) Both large and small firms should use the same type of accounting system. b) All firmsshould have the same types of transactions. c) The volume of data to be handled should not vary between firms. d) The kind of information that.
16 Views
View Answer
21.The “efficient markets hypothesis” proposes that a) market prices reflect information known only to internal stakeholders. b) market prices reflect all information about a company. c) market prices reflect information known only to external stakeholders. d) information asymmetry is required. 22.Which of the following does NOT describe a cause of management bias? a) the need to.
8 Views
View Answer
Ex. 2-77Fraudulent financial reporting and the accountant’s role Explain what the accountant’s responsibility is in preparation of a company’s financial records. Ex. 2-78Financial reporting pressures caused by budgets Explain why budgets might exert negative influence into accounting decisions.Offer some examples to illustrate where this might be the case. .
14 Views
View Answer
Pr. 3-92 Adjusting and closing entries The following trial balance was taken from the books of Kaslo Corporation at December 31, 2017: AccountDebitCredit Cash....................................................$  40,000 Accounts Receivable.......................................108,000 Note Receivable...........................................8,000 Allowance for Doubtful Accounts..............................$   1,800 Merchandise Inventory.....................................54,000 Unexpired Insurance.......................................4,800 Furniture and Equipment....................................138,000 Accumulated Depreciation...................................15,000 Accounts Payable.........................................10,800 Common Stock...........................................44,000 Retained Earnings.........................................65,000 Sales...................................................410,000 Cost of Goods Sold........................................128,000 Salaries Expense..........................................53,000 Rent Expense............................................    12,800________ Totals...............................................$546,600$546,600 At year end, the following items have not yet.
9 Views
View Answer
Ex. 1-55Merits of accrual- vs. cash-basis accounting Investors are interested in assessing a company’s ability to generate net cash inflows, as well as its ability to protect and enhance capital investments.Briefly explain how each of the accrual- and cash-basis methods, respectively, might enhance these objectives. Ex. 1-56Information asymmetry In markets where information asymmetry.
8 Views
View Answer
Ex. 2-71Matching concept A concept is a group of related ideas. Matching could be considered a concept because it includes ideas related to both revenue recognition and expense recognition. Briefly explain the theory behind a) revenue recognition and b) expense recognition. Ex. 2-72Forms of business organization Identify at least two (2) common forms.
8 Views
View Answer
Ex. 3-86 Inputs under IFRS 13 There are three levels of inputs under IFRS 13.What type of inputs are used by Hood company in exercise3-85?As a result, what classification would be assigned to the specialized equipment? Ex. 3-87Calculate market price of a bond On January 1, 2017 Lance Co. issued five-year bonds with.
13 Views
View Answer
65. On December 1, 2017, Flynn Consulting paid $27,000 for a three-year insurance policy (December 1, 2017 to November 30, 2020) and debited the entire amount to Prepaid Insurance. The December 31, 2017 required adjusting entry in connection with this policy would be a) debit Prepaid Insurance and credit Insurance Expense.
13 Views
View Answer
MULTIPLE CHOICE QUESTIONS 1.The essential characteristic(s) of accounting is (are) a) communication of financial information to interested internal parties only. b) communication of economic information to external parties. c) identification and measurement of financial information only. d) identification, measurement, and communication of financial information. 2.Financial accounting is concerned with the process that culminates in a) the preparation.
20 Views
View Answer
11.Audited financial statements are prepared by a) auditors. b) financial analysts. c) Canada Revenue Agency. d) management. 12.The auditor’s primary responsibility is to a) review financial statements and discuss them with management. b) prepare financial statements. c) report to Canada Revenue Agency. d) report to standard setters. 13.The widely publicized subprime lending crisis was NOT caused by a) capital market participants.
13 Views
View Answer
Ex. 3-80Adjusting the Closing Entries The adjusted trial balance of Ryan Financial Planners appears below. Instructions Using the information from the adjusted trial balance, you are to prepare for the month ending December 31: a)an income statement. b)a retained earnings statement. c) a balance sheet. Ryan Financial Planners Adjusted Trial Balance December 31, 2017 DebitCredit Cash....................................................$  2,900 Accounts Receivable.......................................2,200 Supplies.................................................1,800 Equipment...............................................16,000 Accumulated Depreciation—Equipment........................$  4,000 Accounts.
10 Views
View Answer
Ex. 3-84Your client, Bench Company, has a few minor lawsuits outstanding.Your main contact, Michael Wood, has heard that, though their amount is unknown, these lawsuits must be recorded on the financial statements.Explain briefly for Mr. Wood, the cash flow approach you would take to determining the amount to record on.
13 Views
View Answer
Pr. 3-94Closing Entries Below is a selection of account balances for Howard Ltd. at December 31, 2017: Sales........................$856,000 Sales returns..................$40,000 Cost of goods sold..............$456,000 Advertising expense............$38,000 Salaries expense...............$113,000 Depreciation expense...........$31,000 Insurance expense.............$9,000 Administrative expense..........$10,000 All accounts have their normal balances. Instructions Prepare all necessary closing entries at December 31, 2017. Pr. 3-95Adjusting entries Data relating to the balances of various accounts affected by adjusting.
12 Views
View Answer
21.For adjusting entries relating to accrued revenues, a) a liability-revenue account relationship exists. b) the adjusting entry involves a credit to an asset account and a debit to a revenue account. c) if an adjustment is not made, assets will be overstated. d) before adjustment, both assets and revenues are understated. 22.Which of the following.
9 Views
View Answer
Ex. 3-82Explain whether the financial statement excerpt below is from the financial statements of a corporation, a sole proprietorship or a partnership: Abhrams, Capital..........$20,000 Johnston, Capital..........$25,000 Zinck, Capital.............$20,000 Total....................$65,000 Ex. 3-83Expected Cash Flow Approach Assume that Picnic Paper Co. has several minor lawsuits outstanding.To determine the amount of liability to recognize on the statement of financial.
19 Views
View Answer
41.Fair value (of an asset) is a) an entry price. b) an entity-specific measure. c) an exit price. d) not used when following IFRS. 42.Application of the full disclosure principle a) is theoretically desirable but not practical because the costs of complete disclosure exceed the benefits. b) is violated when important financial information is buried in the.
13 Views
View Answer

Welcome Back!

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Forgot?
Login
Don't have an account? Signup

Join ScholarOn

ScholarOn has more then 20 Million answers, flashcards & more being added everyday!

or
Signup
By registering, I agree to the Terms and Privacy Policies
Already have an account? Log in

Thank You For Registering

Please Vreify Your Email Address

Resend Link
Verification Mail Send Successfully. Please Check Your Email.

Forgot Password

Please enter your registered email to recieve the password reset link.

Send reset link
Already have an account? Log in
Did you know?

ScholarOn has more than 2 Million+ answers, textbook solutions & flashcards. Explore Now!

d
Let us boost your grade together!