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Study Resources (Accounting)

11.As prescribed in AASB 121, translation of the accounts of foreign operations to the presentation currency requires any gains or losses on translation be taken directly to reserves. 12.If the exchange rate for US dollars relative to Australian dollars goes from US$1 = A$2.10 to US$1 = A$2.20, the Australian.
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39.Yarra Manufacturing Ltd is an Australian registered entity that has a branch in Singapore, Kew Ltd. Kew Ltd has a foreign operation in China. The foreign operation maintains its accounting records in Chinese yuan. The functional currency of the Chinese operation is Singapore dollar. The presentation currency of Kew Ltd.
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EXERCISES Ex. 192 Prepare an income statement, a retained earnings statement, and a balance sheet for the medical practice of Linda Denny, MD, from the items listed below for the month of October 2012. Retained earnings (October 1)$15,000 Common stock30,000 Accounts payable6,000 Equipment29,000 Service revenue23,000 Dividends6,000 Supplies expense3,500 Cash13,000 Utilities expense700 Supplies2,800 Salaries and wages expense7,000 Accounts receivable10,000 Rent expense2,000 LINDA DENNY, MD Income Statement For the Month.
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74.Describe, with examples, the reasons why organisations would want to swap a loan denominated in one currency for another. 75.Discuss the accounting treatment required under AASB 121 The Effects of Changes in Foreign Exchange Rates when a reporting entity has a foreign currency monetary items at the reporting date. .
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              31.If the assets owned by a business total $150,000 and liabilities total $105,000, stockholders’ equity totals $45,000.               32.If the assets owned by a business total $100,000 and liabilities total $65,000, stockholders’ equity totals $25,000.               33.Claims of creditors and owners on the assets of a business are called.
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              51.A small neighborhood barber shop that is operated by its owner would likely be organized as a a.joint venture. b.partnership. c.corporation. d.proprietorship.               52.A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason.
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              71.Which of the following is a user of accounting information with an indirect financial interest in a business? a.A financial adviser b.Management c.Investor d.Creditor               72.Which type of corporate information is readily available to investors? a.financial comparison of operating alternatives b.marketing strategies for a product that will be introduced in eighteen months c.forecasts of cash needs.
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52.Common examples of qualifying assets are assets that result from development and construction activities in:   A. agriculture; power generation facilities; investment property. B. extractive industries; general insurance; investment property. C. agriculture; general insurance; investment property. D. extractive industries; power generation facilities; investment property. 53.AASB 123 Borrowing Costs defines a qualifying asset as an asset that:   A. takes a period of greater.
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              131.Ashley’s Accessory Shop started the year with total assets of $70,000 and total liabilities of $40,000. During the year the business recorded $110,000 in revenues, $55,000 in expenses, and dividends of $20,000. The net income reported by Ashley’s Accessory Shop for the year was a.$40,000. b.$50,000. c.$65,000. d.$55,000. 132.If total liabilities increased by.
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1.AASB 121 requires foreign currency transactions to be recorded on initial recognition in the local currency, by applying to the foreign currency amount the spot exchange rate between the local currency and the foreign currency at the date of the transaction. 2.AASB 121 requires foreign currency transactions to be recorded.
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Ex. 193 Use the following accounts and information to prepare, in good form, an income statement, a retained earnings statement, and a balance sheet for Pierce Industries for the month ended August 31, 2012. Accounts payable$  1,100Dividends$ 3,000 Accounts receivable5,400Insurance expense1,200 Buildings 63,000Supplies1,400 Cash20,600Notes payable3,300 Service revenue 25,700 Rent expense3,400 Common stock52,000Salaries expense 10,000 Retained earnings (beginning)25,900 PIERCE INDUSTRIES Income.
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              91.Resources owned by a business are referred to as a.stockholders’ equity. b.liabilities. c.assets. d.revenues.               92.The best definition of assets is the a.cash owned by the company. b.collections of resources belonging to the company and the claims on these resources. c.Owners’ investment in the business. d.resources belonging to a company have future benefit to the company..
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62.Which of the following items is not within the scope of AASB 121 The Effects of Changes in Foreign Exchange Rates?   A. foreign currency denominated loans B. bank deposits in foreign currency C. investments in foreign operations D. foreign currency derivatives 63.Which of the following items is within the scope of AASB 121 The Effects of Changes in Foreign.
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Be. 183 Determine the missing items. Assets   =   Liabilities + Stockholders’ Equity $75,000$56,000(a) (b)$28,000$34,000 $84,000(c)$55,000 Be. 184 Determine the missing items. Assets   =   Liabilities + Stockholders’ Equity $61,000$50,000(a) (b)$18,000$30,000 $54,000(c)$40,000 Be. 185 Identify which of the following accounts appear on a balance sheet. (a) Service revenue (b) Cash (c) Common stock (d) Accounts payable (e) Rent expense (f)    Supplies (g) Land Be. 186 For the.
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111.The company’s policy toward dividends and growth could best be determined by examining the a.Balance sheet. b.Income statement. c.Retained earnings statement. d.Statement of cash flows.               112.An income statement a.summarizes the changes in retained earnings for a specific period of time. b.reports the changes in assets, liabilities, and stockholders’ equity over a period of time. c.reports the.
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51.Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines provide guidance to best practice reporting. These include defining the report quality to contain the following qualitative attributes:   A. reliability, relevance, comparability and understandability. B. inclusivity, materiality, accuracy and timeliness. C. reliability, clarity, balance, comparability, accuracy and timeliness. D. inclusivity, materiality, sustainability context and completeness 52.Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines.
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TRUE-FALSE STATEMENTS               1.A business organized as a separate legal entity owned by stockholders is a partnership.               2.Corporate stockholders generally pay higher taxes but have no personal liability.               3.The liability of corporate stockholders is limited to the amount of their investment.               4.The majority of U.S. business is transacted.
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141.Stockholders’ equity can be described as claims of a.creditors on total assets. b.owners on total assets. c.customers on total assets. d.debtors on total assets. 142.Payments to stockholders are called a.expenses. b.liabilities. c.dividends. d.distributions. 143.Common stock is reported on the a.statement of cash flows. b.retained earnings statement. c.income statement. d.balance sheet. 144.Stockholders’ equity is comprised of a.common stock and dividends. b.common stock and retained earnings. c.dividends.
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BRIEF EXERCISES Be. 175 Indicate in the space by letter whether each statement below applies to a sole proprietorship (S), partnership (P), or corporation (C). More than one answer may be appropriate. ____a.Simple to establish. ____b.Shared control. ____c.Easy to transfer ownership. ____d.No personal liability. ____e.Tax advantage. ____f.Easier to raise funds. Be. 176 Indicate in the space provided by each.
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              61.Which of the following is the most appropriate and modern definition of accounting? a.The information system that identifies, records, and communicates the economic events of an organization to interested users b.A means of collecting information c.The interconnected network of subsystems necessary to operate a business d.Electronic collection, organization, and communication of vast amounts.
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41.The Shell Group of companies has developed a Social Responsibility Management system that may be described as:   A. an integrated financial reporting system designed to encourage internal decision making and reporting to incorporate the modified historical cost system's approach to environmental and social reporting into all management systems. B. an integrated means for consistently.
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11.'Greenwash' is a term applied to environmental reports that are considered to be for the purpose of public relations rather than a balanced report of environmental impacts. 12.According to Environment Australia, public environmental reporting is the communication of environmental position information by an organisation to its shareholders. 13.Freeman and Reed.
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              21.A different set of financial statements usually is prepared for each user.               22.The heading for the income statement might include the line “As of December 31, 20xx.”               23.Net income is another term for revenue.               24.Cash is another term for Stockholders’ Equity.               25.The primary purpose of.
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21.The body/bodies that have been proactive in providing environmental reporting guidelines/framework include:   A. the International Accounting Standards Board. B. the International Federation of Accountants. C. the Minerals Council of Australia. D. the International Oil and Gas Producers Board. 22.Factors that may influence perceptions of what the responsibility of an organisation should be include:   A. an individual's cultural background. B. the time period (generation).
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31.AccountAbility's work is the AA1000 series of standard which is based on the following principle:    A. responsiveness. B. inclusivity. C. materiality. D. all of the given answers. 32.In Australia there is a specific requirement for reporting entities in the extractive industries to disclose:   A. information about the potential environmental impacts on protected species (as specified by.
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MULTIPLE CHOICE QUESTIONS               41.The proprietorship form of business organization a.must have at least two owners in most states. b.generally receives favorable tax treatment relative to a corporation. c.combines the records of the business with the personal records of the owner. d.is classified as a separate legal entity.               42.A business organized as a corporation a.is.
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76.How does the accounting treatment for qualifying monetary items differ from other foreign currency monetary items as prescribed under AASB 121 The Effects of Changes in Foreign Exchange Rates? 78.Discuss the situations in which the discontinuation of fair-value hedge accounting is to be done as provided for in AASB 139. .
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Be. 187 Classify each of these items as an asset (A), liability (L), or stockholders’ equity (SE). _____1.Accounts receivable _____2.Accounts payable _____3.Common stock _____4.Supplies _____5.Retained earnings _____6.Cash _____7.Notes payable _____8.Equipment Be. 188 At the beginning of the year, Gant Company had total assets of $690,000 and total liabilities of $300,000. Answer the following questions viewing each situation as being independent of.
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Be. 179 Listed below in alphabetical order are the balance sheet items of Nolan Company at December 31, 2012. Prepare a balance sheet and include a complete heading. Accounts payable$    6,000 Accounts receivable15,000 Buildings65,000 Cash11,000 Common stock80,000 Land31,000 Equipment5,000 Retained earnings41,000 Be. 180 Indicate in the space provided by each item whether it would appear on the Income Statement (IS), Balance.
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              11.Two primary external users of accounting information are investors and creditors.               12.Financing activities for corporations include borrowing money and selling shares of their own stock.               13.Investing activities involve collecting the necessary funds to support the business.               14.The purchase of equipment is an example of a financing.
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1.A specific Australian requirement for companies to provide environmental information in their annual reports is available in AASB 137 Provisions, Contingent Liabilities and Contingent Assets. 2.The qualitative characteristics identified in the Global Reporting Initiatives (GRI) Guidelines are similar with those provided in AASB 101 Presentation of Financial Statements. 3.The Parliamentary.
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19.The 'spot rate' is:   A. the rate for delivery the next day of currencies to be exchanged. B. the exchange rate for immediate delivery of currencies to be exchanged. C. only used in relation to metals, that is, the spot metal price. D. can never be used in translating the accounts of foreign operations. 20.'Exchange rate' is:   A. not defined in.
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69.Explain why some opponents of the accounting prescribed in AASB 121 object to the requirement that long-term receivables and payables be translated using the reporting date spot rates. 71.What is a forward rate agreement? Explain, with an example, how such an agreement can be used as a hedging instrument. .
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161.Marvin Services Corporation had the following accounts and balances: Accounts payable $12,000 Equipment $14,000 Accounts receivable 2,000 Land 14,000 Buildings ? Unearned service revenue 4,000 Cash 6,000 Total stockholders' equity ? If the balance of the Buildings account was $28,000 and $2,000 of Accounts Payable were paid in cash, what would be the balance of the total stockholders' equity? a.$54,000 b.$48,000 c.$68,000 d.$52,000 162.Marvin Services Corporation had the following accounts and.
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29.Under the translation method required by AASB 121, the approach to translating a foreign operation's accounts includes:    A. Non-monetary items included in the statement of financial position are translated at the rate current at reporting date. B. Equity at the date of investment is translated at the rate for the when the.
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              81.Debt securities sold to investors that must be repaid at a particular date some years in the future are called a.accounts payable. b.notes receivable. c.taxes payable. d.bonds payable.               82.Which of the following activities involves collecting the necessary funds to support the business? a.Operating b.Investing c.Financing d.Delivering               83.Buying assets needed to operate a business is an.
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101.Ending retained earnings for a period is equal to: a.Beginning retained earnings + Net income + Dividends b.Beginning retained earnings – Net income – Dividends c.Beginning retained earnings + Net income – Dividends d.Beginning retained earnings – Net income + Dividends Ans: C, SO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA.
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151.Why are financial statement users interested in the statement of cash flows? a.It is the easiest financial statement to evaluate. b.It provides information about an important company resource. c.It is the first statement that is presented to users. d.It helps users decide whether assets such as office equipment should be replaced. 152.Why should the.
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121.Finney Company began the year by issuing $20,000 of common stock for cash. The company recorded revenues of $185,000, expenses of $160,000, and paid dividends of $10,000. What was Finney’s net income for the year? a.$15,000 b.$35,000 c.$25,000 d.$45,000 122.Lankston Company began the year by issuing $60,000 of common stock for cash. The company.
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