Escolar Documentos
Profissional Documentos
Cultura Documentos
BUSINESS DEPARTMENT
REV 003
MIDTERM
QUESTIONS A B C
4
Fences and parking lots are reported
on the balance sheet as current assets. land improvements. land.
7 Plant assets purchased on long-term the total value of the future amount the present
credit contracts should be accounted the future of the future value of the
for at payments. payments. future payments.
When a plant asset is acquired by
8 issuance of common stock, the cost of
the plant asset is properly measured par value of the stated value of the book value of
by the stock. stock. the stock.
10
Which of the following is a capital Payment of an Retirement of Payment of
expenditure? account payable bonds payable income taxes
rate is the total cost rate is the total life is the total
19
divided by the total annual depreciation cost divided by
For the composite method, the annual divided by the total the total annual
composite depreciation. depreciable cost. depreciation.
Tangible
22 equipment costs
Of the following costs related to the associated with
development of natural resources, Acquisition cost of machinery used
which one is not a part of depletion the natural resource to extract the
cost? deposit
Accumulated Exploration costs natural resource
depreciation, either Details
23 Which of the following disclosures is by major classes of demonstrating how Depreciation
not required in the financial statements depreciable assets depreciation was expense for the
regarding depreciation? or in total. calculated. period.
equal to the
the asset's balance of the
24 the fair market acquisition cost less related
value of the asset the total related accumulated
at a balance sheet depreciation depreciation
The book value of a plant asset is date. recorded to date. account.
27
Which of the following is not an Research and
intangible asset? Trade name development costs Franchise
Which of the following principles best
28 describes the current method of
accounting for research and Associating cause Systematic and Income tax
development costs? and effect rational allocation minimization
deferred credits that
are recognized and obligations to
any accounts having
measured in transfer
credit balances after
29 Liabilities are _____________. conformity with ownership shares
closing entries are
generally accepted to other entities
made.
accounting in the future.
principles.
A cash dividend
A dividend payable in
Which of the following is a current Preferred dividends payable to
30 the form of additional
liability? in arrears preferred
shares of stock
stockholders
Environmental
Which of the following contingencies Guarantees of
32 Probable losses not liabilities that cannot
needs be disclosed in the financial indebtedness of
reasonably estimable be reasonably
statements or the notes thereto? others
estimated
Which of the following sets of conditions Amount of loss is Amount of loss is Event is unusual
33 would give rise to the accrual of a reasonably estimable reasonably estimable in nature and
contingency under current generally and event occurs and occurrence of occurrence of
accepted accounting principles? infrequently event is probable. event is probable
They are sold by malls, supermarkets or
34 drugstores which are redeemable by Warranty Premium Gift certificate
purchase of merchandise.
The obligation to
The obligation to
The obligation to pay pay interest on a
provide goods that
for goods that an five-year note
36 Which of the following represents a customers have
entity expects to payable that was
liability? ordered and paid for
order from suppliers issued the last
during the current
next year day of the current
year
year
outflow of
entity has present
42 Which condition does not provide for a the amount can be resources is
obligation as a result
recognition of provision as a liability? measured reliably probable to settle
of past event
the obligation
established pattern
47 Which of the following tdoes not give rise
based on past legislation a contract
to a legal obligation?
exprerience
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ROSALIA C. DE GUZMAN
MENT
D ANSWER REFERENCES
recognized as
revenue of the
period.
Partial recognition
all of these.
obligations arising
from past
Financial Accounting Volume
transactions and One, Latest Edition, Valix,
payable in assets or Peralta, Valix
services in the
future.
D
The obligation to
distribute an entity’s
own shares next year Financial Accounting Volume
as a result of a stock One, Latest Edition, Valix,
dividend declared Peralta, Valix
near the end of the
current year
d by:
BERNARDO C. PANGILINAN
by: