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Study Resources (Accounting)

11) Which statement is not correct? A) Agricultural activity involves growth, degeneration and reproduction. B) Agricultural activity includes processing into the final product. C) Revenue recognition for agricultural produce is covered under the requirements of IAS 18. D) Inventory valuation for agricultural produce is covered under the requirements of IAS 2. 12) Which statement is.
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1) Which of the following is not a characteristic of intangible assets? A) Intangibles do not have physical substance. B) Intangibles benefit more than one year. C) Intangibles have fixed determinable cash flows. D) Intangibles are held for use in the ordinary course of business. 2) Explain how goodwill arises in a business.  Give an.
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4) The following transactions occurred in fiscal 2012: • Synthesize Inc. exchanged machinery with Energize Corp. Synthesize's machinery Energize's machinery Cost 500,000 620,000 Accumulated depreciation 200,000 500,000 Fair value 350,000 Not known • Synthesize Inc. purchased equipment by signing a 5 year non-interest bearing note payable for $200,000. The implicit rate of interest was 5%. • Synthesize received a government grant of $10,000 to.
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1) Which statement is correct? A) The revaluation model is required for non-current assets under IFRS. B) The revaluation model is required for non-current assets under ASPE. C) The revaluation model is optional for non-current assets under IFRS. D) The revaluation model is optional for non-current assets under ASPE. 2) Which is correct with respect.
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11) Explain derecognition of property, plant or equipment. 12) What does a "gain on disposal of property, plant and equipment" mean? Does a gain suggest good or excellent management and a loss on disposal indicate poor management? Explain your conclusion. 13) Will the method of depreciation affect the net cash outflow associated.
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20) Adam's Bikes produces specialized bicycle frames. The production process uses two machines, which together form a cash generating unit (CGU). The following information is relevant to the evaluation of impairment for these machines. Bending machine Welding machine Total CGU Net carrying value 550,000 450,000 1,000,000 Fair value less costs to sell 380,000 See requirement See requirement Value in use 950,000 Required: a. Assume that.
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11) Wilson Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 120,000 Building Accumulated Depreciation 40,000 Net carrying value 80,000 The fair value for the property is $20,000. What amount would be booked to the "accumulated depreciation" account if Wilson chooses to use the proportional method to record the revaluation? A) $0 B) $30,000.
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1) How does IFRS require that government grants for property, plant and equipment (PPE) be recorded? A) The government grant should be recorded directly to equity. B) The government grant should be recorded indirectly to equity via income. C) The government grant should not be recorded directly to equity via income. D) The government.
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41) AccountingPro purchased equipment on January 1, 2009 for $275,000. The asset's useful life was estimated at 5 years or 10,000 units of output, with no residual value. The company has a December 31 year end. Additional Information Year Units of Output 2009 2,100 2010 2,000 2011 1,700 2012 2,300 2013 1,900 Assuming the company uses the units-of-production depreciation method, what is the depreciation.
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  Table 11-2   A $6,000, 120-day, 8% note payable is signed at the bank on October 2, 2013  to borrow cash for the purchase of a car. 33) Referring to Table 11-2, what is the amount of cash that is payable at the maturity of the note? A) $6,157.81 B) $5,921.16 C) $5,842.19 D) $6,000.00 34) Referring.
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11) Explain how government grants are accounted for and presented in the financial statements. 12) Wind Town is a builder of wind turbines that are used in electricity generation. To encourage the installation of wind turbines and the development of wind power technology, the provincial government has several programs in place.
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1) How is an impairment loss allocated to the non-current asset(s)? A) Allocate the impairment loss in proportion to the gross amounts of the assets in the cash generating unit. B) Allocate the impairment loss to assets with the highest carrying amounts in the cash generating unit. C) Allocate the impairment loss in.
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17) Which statement is correct? A) Costs can continue to be capitalized in the post development phase. B) The project must meet IAS 38 criteria before development costs can be capitalized. C) The development phase includes generating new ideas or searching for new materials. D) The research phase includes designing, constructing or testing a.
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11) Soorya Resources incurred the following costs: Mine Site Costs incurred in exploration and evaluation Costs incurred in development Status at year-end Alpha 300,000 100,000 Producing @5% of reserves Beta 200,000 Abandoned Zeta 100,000 200,000 In development How much would be capitalized as "intangible assets" under the successful efforts method? A) $300,000 B) $400,000 C) $500,000 D) $600,000 12) GoodResources incurred the following costs: Mine Site Costs incurred in exploration and evaluation Costs incurred.
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1) What is "agricultural activity"? A) The harvested product of biological assets. B) A living animal or plant. C) The transformation of biological assets. D) Planting, harvesting and marketing produce. 2) Which of the following is correct with respect to the accounting for "investment properties"? A) Under ASPE, either the cost or fair value model may.
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43) Failure to record accrued interest on a note payable causes a company to: A) overstate interest income. B) understate interest expense. C) understate retained earnings. D) overstate interest expense and understate retained earnings. 44) Short-term notes payable: A) are an unusual form of financing. B) are generally due within one year. C) are classified on the balance.
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29) Why is it important to understand the difference between research costs and development costs? 30) What are the unique features that lead to the differing accounting treatment between research and development costs? 31) What is economic profit as it would be defined in finance or economics? Why is accounting net income.
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1) Growth Industries incurred the following costs in fiscal 2011: Land and building   Land purchase $3,000,000 Dismantling of old building 50,000 Proceeds from selling parts of old building 10,000 Building materials, labour for construction of new building 2,000,000 Roof of new building 750,000 Heating and air conditioning system for new building 500,000 Directly attributable overhead during construction of new building 100,000 General and administrative costs incurred.
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9) Polar Sky Railway (PSR), a transportation company, has substantial investments in property, plant and equipment. In 2011, the company exchanged some of these assets with other companies. [Note: any depreciation expense prior to the following transaction has already been properly recorded.] PSR traded railway tracks running Vancouver-Calgary-Winnipeg to its.
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24) Explain the accounting for internally developed intangible assets. 25) A professional sports team and related items (including a stadium) were bought by an exceedingly wealthy investor and sports fan. The negotiated price was $225,000,000. Details of what was purchased and the agreed fair values are as follows: Fair value in $.
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9) Patent Corp., a publicly accountable entity, purchased a company with the following assets and liabilities for $100,000: Carrying value Fair value Cash 10,000 10,000 Inventories 18,000 17,000 Property, plant and equipment 12,000 10,000 Intangible assets 32,000 40,000 Accounts payable 15,000 15,000 Long-term liabilities 10,000 15,000 Equity 47,000 How much goodwill should be recorded? A) $47,000 B) $53,000 C) $70,000 D) $100,000 10) Growth Corp., a publicly accountable entity, purchased a company with the following assets and liabilities.
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23) Which of the following liabilities creates no expense on the part of the company? A) Employment Insurance payable B) Canada Pension Plan payable C) GST payable D) estimated warranty payable 24) When a company issues a short-term note payable: A) the note payable account is credited. B) the note payable is debited. C) the interest expense is.
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1) The following transactions occurred in fiscal 2012: • Synthesize Inc. exchanged machinery with Energize Corp. Synthesize's machinery Energize's machinery Cost 500,000 620,000 Accumulated depreciation 200,000 500,000 Fair value 350,000 Not known • Synthesize Inc. purchased equipment by signing a 5 year non-interest bearing note payable for $200,000. The implicit rate of interest was 5%. • Synthesize received a government grant of $10,000 to.
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11) What is the meaning of "depreciation"? A) The systematic allocation of an asset's depreciable amount allocated in proportion to the productive capacity used. B) The systematic allocation of an asset's depreciable amount allocated evenly over the asset's estimated useful life. C) The systematic allocation of an asset's depreciable amount over its estimated.
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2) Grape Company (GC) had been renting an office building for several years. On January 1, 2013, GC decided to have a new office building constructed. On that date, it acquired land with an abandoned warehouse on it for $350,000. Other costs included the following: Demolition of warehouse $18,000 Legal fees for purchase.
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49) At December 31, 2012, the following data were available for a building owned by Omega Company: Building cost $700,000 Accumulated depreciation - building 525,000 Estimated residual value at end of the useful life 25,000 Estimated remaining useful life 15 A small room was built on the back of the building at a cost of $45,000. The room was.
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21) Explain the accounting for assets related to the agricultural industry. 22) Information about the PPE for Jeffery Inc. is provided below. Determine the balance sheet presentation under the cost and fair value model for each year.  Ignore the impact of income taxes and assume that a full year depreciation is.
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11) Based on the following information, what is the recoverable amount for the impairment test? Cost $750,000 Accumulated depreciation 530,000 Value in use (sum of discounted cash flows) 230,000 Fair value 240,000 Disposal costs 5,000 A) $220,000 B) $230,000 C) $235,000 D) $240,000 12) Based on the following information, what is the impairment amount to be recorded? Cost $750,000 Accumulated depreciation 530,000 Value in use (sum of discounted cash flows) 230,000 Fair.
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1) Which statement is correct about indefinite lived intangible assets? A) This is an infinite lived asset. B) The asset is expected to continue providing economic benefits for the foreseeable future. C) Management does not know how long the asset is expected to provide economic benefits. D) The asset has fixed and determinable cash.
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31) Wilson Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 120,000 Building Accumulated Depreciation 40,000 Net carrying value 80,000 The fair value for the property is $40,000. Using straight-line depreciation and assuming that the property has a remaining depreciable life of 5 years, how much would be booked to accumulated depreciation.
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1) Which statement does not describe the "successful efforts" method? A) A method of accounting that capitalizes costs of mineral exploration and evaluation only if the outcome is successful. B) A method of accounting that capitalizes costs of mineral exploration and evaluation only if the production is technically feasible. C) A method of.
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  Objective 11-1 1) Accrued interest on a note payable should be credited to interest payable. 2) Interest payable is a contra liability account and is deducted from the note payable on the balance sheet. 3) A $45,000, 10%, 90-day note payable comes to maturity. The amount to be paid at maturity including interest.
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1) When is property, plant, and equipment (PPE) not derecognized? A) When PPE is sold. B) When PPE is scrapped. C) When PPE is idle. D) When PPE is destroyed in a flood. 2) Which question arises at the time property, plant, and equipment is derecognized? A) Should the transaction be recorded at fair value or.
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21) Smith Inc wishes to use the revaluation model for this property: Before Revaluation Building Gross Value 120,000 Building Accumulated Depreciation 60,000 Net carrying value 60,000 The fair value for the property is $150,000. Assuming this is the first year of using the revaluation model, what amount would be booked to profit and loss if Smith chooses to.
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