Akuntansi Keuangan

1. Financing Activities Include

a. Lending Money
b. Acquiring Investment
c. Issuing Debt
d. Acquiring non-current Asset

Financing activities involve liability and equity items and include (a) obtaining
cash from creditors and repaying the amounts borrowed, and (b) obtaining capital
from owners and providing them with a return on, and a return of, their investment.
(pg. 1183)

2. Which of the following Transaction affects only Statement of Financial Position

a. Recovery of a bad debt using the allowance method
b. Recording BDE using the allowance method
c. Writing off a bad debt using the direct write-off method
d. Recording BDE using the percentage of sales basis
3. Which of the following statement is false regarding the different bases used for the
allowance method
a. Three bases that generally accepted are the percentage of sales, the percentage of
receivables, and the direct write-off
b. Management can choose whichever basis it prefers
c. If management wishes emphasize the cash receivable value of receivable it will
select the percentage of receivable basis
d. The company must determine it past experience with bad debt losses regardless of
which basis it select
4. Antidilutive securities
a. Should be included in the computation of diluted earnings per share but not basic
earnings per share
b. Are those whose inclusions in earnings per share computations would cause basic
earnings per share to exceed diluted earnings per share
c. Include share options and warrants whose exercise price is less than the average
market price of ordinary shares
d. Should be ignored in all earnings per share calculation
 Antidilutive securities are securities that upon conversion or exercise increase
earnings per share (or reduce the loss per share). A company should exclude any
security that is antidilutive, nor can the company use such a security to offset dilutive
securities. (pg.779)

5. Free cash flows equal cash provided by

a. Operations less capital expenditures and cash dividends
b. Operations less Cash Dividends
c. Investing activities less capital expenditures and cash dividends
d. Operations less capital expenditures
(pg. 2013)

6. The statement of cash flows should help investor and creditor assess each of the
following, except:
a. Entity’s ability to generate future income
b. Entity’s ability to pay dividend
c. Reasons for the difference between Net Income and Net Cash provided by
operating activities
d. Cash Investing and Financing transactions during the period

The statement of cash flows provides information to help investors, creditors, and
others assess the following: (pg.1182)

a. The entity’s ability to generate future cash flows

b. The entity’s ability to pay dividends and meet obligations.
c. The reasons for the difference between net income and net cash flow from
operating activities.
d. The cash and non-cash investing and financing transactions during the period
7. Meyer Company reported net income of $30.000 for the year. During the year,
account receivable increased by $7.000, account payable decreased by $3.000 and
depreciation expense of $5.000 was recorded. Net cash provided by operating
activities for the year is:
a. $25.000
b. $45.000
 c. $29.000
d. $30.000

Accounts receivable decreased during the period because cash receipts (cash-
basis revenues) are higher than revenues reported on an accrual basis. To convert net
income to net cash flow from operating activities, the decrease in accounts receivable
must be added to net income. (pg.1191)

When accounts payable increase during the year, the company must add back
the increase in accounts payable to net income. (pg.1189)

The increase in accumulated depreciation is a non-cash charge; the company

adds it back to net income, to arrive at net cash flow from operating activities
(pg.1192)

8. The conversion of preference shares into ordinary shares requires that any excess of
the par value of the ordinary shares issued over. The carrying amount of the
preference shares being converted should be:
a. Reflected currently in income
b. Reflected currently in other comprehensive income
c. Treated as a prior adjustment
d. Treated as a direct reduction of retained earnings
9. Porter Corp. purchased its own par value shares on January 1, 2015 for $20.000 and
debited the treasury share account for the purchase price. The shares were
subsequently sold for $12.000. The $8.000 difference between the cost and sales price
should be recorded as a deduction from:
a. Share premium – Treasury to the extent that previous net “gains” from sales of the
same class stock are included therein; otherwise from retained earnings
b. Share premium – Treasury without regard as to whether or not there have been
previous “gains” from sales of the same class of shares included therein.
c. Retained Earnings
d. Net Income

When a corporation sells treasury shares below its cost, it usually debits the excess
of the cost over selling price to Share Premium— Treasury. After eliminating the
credit balance in Share Premium—Treasury, the corporation debits any additional
excess of cost over selling price to Retained Earnings. (pg.714)
10. A debt instrument with no ready market is exchanged for property whose fair value is
currently indeterminable. When such a transaction takes place.
a. The present value of the debt instrument must be approximated using an imputed
interest rate
b. It should be reported on the books of either party until the fair value of the
property becomes evident
c. The board of directors of the entity receiving the property should estimate a value
for the property that will serve as a basis for the transaction
d. The directors both entities involved in the transaction should negotiate a value to
be assigned to the property
11. Which of the following is not generally correct about recording a sale of debt
investment before maturity date?
a. Accrued interest will be received by the seller even though it is not an interest
payment date
b. An entry must be made to amortize a discount to the date of sale
c. The entry to amortize a premium to the date of sale includes a debit to Debt
Investments
d. A gain on the sale is the excess of the selling price over the book value of the
bonds
12. A company is constructing an asset for its own use. Construction begins in 2015. The
asset is being financed entirely with a specific new borrowing. Construction
expenditures were made in 2015 and 2016. At the end of each quarter, the total
amount of interest cost capitalized in 2016 should be determined by applying the
interest rate on the specific new borrowing to the
a. Total accumulated expenditures for the asset in 2015 & 2016
b. Average accumulated expenditures for the asset in 2015 & 2016
c. Average expenditures for the asset in 2016
d. Total Expenditures for the asset in 2016
13. Judd Inc. own 35% of Corby Corporation. During the Calendar year 2015, Cosby had
net earnings of $300.000 and paid dividend of $30.000. Judd mistakenly recorded
these transactions using the fair value method rather than equity method of
accounting. What effect would this have on the investment account, net income, and
retained earnings, respectively?
a. Understate, overstate, overstate
 b. Overstate, understate, understate
c. Overstate, overstate, overstate
d. Understate, understate, understate
14. The occurrence which most likely would have no effect on 2015 net income
(assuming that all amounts are material) is the
a. Sale in 2015 of an office building contributed by a stockholder in 1987
b. Collection in 2015 of a receivable from a customer whose account was written off
in 2014 by charge to the allowance account
c. Settlement based on litigation in 2015 of previously unrecognized damages from a
serious accident which occurred in 2013
d. Worthless determined in 2015 of stock purchased on a speculative basis in 2011
15. Cotton Hotel recently purchased Emporia Hotel and the land on which it is located
with the plan to tear down the Emporia Hotel and build a new luxury hotel on the site.
The cost of the Emporia Hotel should be
a. Depreciated over the period from acquisition to the date hotel is scheduled to be
torn down
b. Written off as a loss in the year the hotel is tear down
c. Capitalized as part of the cost of the land
d. Capitalized as part of the cost of the new hotel
16. Broadway Co. was granted a patent on a product on Jan 1, 2004. To protect its patent,
the corporation purchased on Jan 1, 2015 a patent on a competing product which was
originally issued on Jan 10, 2011. Because of its unique plant, Broadway Co. doesn’t
feel the competing patent can be used in producing product. The cost of competing
patent should be:
a. Amortized over a maximum period of 20 years
b. Amortized over a maximum period of 16 years
c. Amortized over a maximum period of 9 years
d. Expensed in 2015
17. Under which of the following cases a percentage change may be computed?
a. The trend of the balances is decreasing but all balances are positive
b. There is no balance in the base year
c. There is a positive balance in the base year and a negative balance in the
subsequent year
 d. There is a negative balance in the base year and a positive balance in the
subsequent year
18. Ratio are used as tools in financial analysis
a. Instead of horizontal and vertical analysis
b. Because they may provide information that is not apparent from inspection of
individual components of the ratio
c. Because even singles ratios by themselves are quite meaningful
d. Because they are prescribed by GAAP
19. What are qualitative characteristics of financial statements according to the
framework?
a. Qualitative characteristics are the attributes that make the information provide
financial statements useful to users
b. Qualitative characteristics are boards classes of financial effects of transactions
and events
c. Qualitative characteristics are non-quantitative aspects of an entity’s position
performance and changes in financial position
d. Qualitative characteristics measure the extent to which an entity has complied
with relevant standards and interpretations

The qualitative characteristics that make accounting information useful (pg.30)

20. Which of the following is not a Qualitative Characteristics of financial statements

according to the framework?
a. Materiality
b. Understandability
c. Comparability
d. Relevance
21. Z has sold all of its shares to the public. The company was formerly a state-owned
entity. The National Regulator has retained the power to appoint (menunjuk) the
BOD. An overseas entity acquires 55% of the voting shares, but the regulator still
retains its power to appoint the directors. Who has control of entity?
a. The National Regulator
b. The Overseas Entity
c. Neither the National Regulator nor the Overseas Entity
d. d. The Board of Directors (BOD)
22. “A” has acquired an investment in a subsidiary “B”, with the view to dispose of this
investment within six months. The investment in the subsidiary has been classified as
held for sale & is to be accounted for in accordance with PSAK 58. The Subsidiary
has never been consolidated. How should the investment in the Subsidiary be treated
in the financial statements?
a. Purchase Accounting should be used
b. Equity Accounting should be used
c. The Subsidiary should not be consolidated but PSAK 58 should be used *
d. d. The Subsidiary should remain off Balance Sheet
23. Which of the following types of insurance contracts would probably not be covered
by IFRS 4 / PSAK 62?
a. Motor Insurance
b. Life Insurance
c. Medical Insurance
d. Pension Plan *
24. Insurance can recognize an intangible asset that is the difference between the fair
value & book value of insurance liabilities takes on in a business combination. This
asset should be accounted for using
a. PSAK 19. Intangible Assets
b. PSAK 62. Insurance Contracts only
c. PSAK 15. Property, Plant, and Equipment
d. Such an Asset should not be accounted for until phase two of the insurance
contract
25. When an independent valuation expert advises an entity that the salvage value of its
plant and machinery had drastically changed and thus the change is material, the
entity should:
a. Retrospectively change the depreciation charge based on the revised salvaged
value
b. Change the depreciation charge and treat it as a correction of an error
c. Change the annual depreciation for the current year and future year
d. Ignore effect of the change on annual depreciation, because changes in salvage
values would normally affect the future only since these are expected to be
recover in the future
26. Kinetic Inc. sells component parts to Brian Telecommunicating Inc. a smart phone
manufacturer. During Dec 13, Kinetic Inc. sold $680.000 of goods to Brian Inc. on
account for $880.000. Brian Inc. was dissatisfied with 25% of merchandise it received
due to inferior quality. On Dec 21, Brian Inc. returns the goods to Kinetic Inc. for
credit. Which of the following is true regarding the statement of financial position for
Brian Inc. at Dec 31, 2013?
a. Assets will increase by $170.000 and liabilities will decrease by $170.000
b. Assets will decrease by $170.000 and liabilities will decrease by $170.000
c. Assets will decrease by $220.000 and liabilities will decrease by $220.000
d. Assets will increase by $220.000 and liabilities will increase by $220.000
27. The accountant at Chandra Co. is figuring out the difference in income taxes the
company will pay depending on the choice of either FIFO or Average cost as an
inventory costing method. The tax rate is 30% and the FIFO method will result in
income before tax (IBT) of $9.100. The average cost method will result in IBT of
$8.225. What is the difference in tax that would be paid between two methods?
a. 875
b. 375
c. 263
d. Can’t be determined from the information provided
28. Assume the following data of sales from a company:
2015 -> $1.600.000 | 2013 -> $1.120.000 | 2014 -> $1.280.000 | 2012 -> $ 800.000
If 2012 is the base year, what is the percentage increase in sales from 2012 to 2014?
a. 100%
b. 160%
c. 60%
d. 62.5%
29. For the current month, the beginning inventory consisted of 3 units that cost 6500
each. Purchase = 4 Units @ 6800
= 1 Unit @6750

Sold = 5 unit

Wishes= maximize net income, COGS will be?

a. 5 units @ 6500
 b. 4 units @ 6800 and 1 unit @ 6750
c. 3 units @ 6500 and 1 unit @ 6800
d. 3 units @ 6500, 1 unit @ 6750, and 1 unit @6800
30. Riley Co. incurred the following costs during 2015 Significant modification to the
formulation of a chemical product $160.000 Troubleshooting in connection with
breakdowns during commercial products $150.000 Cost of exploration of new
formulas $200.000 Seasonal or other periodic design changes to existing product
$185.000 Laboratory research aimed at discovery of new technology $275.000 In its
income statement for the year ended December 31, 2015, Riley should report research
& development expense of:
a. $635.000
b. $785.000
c. $820.000
d. $970.000
31. On September 10, 2015, Jenks Co. incurred the following costs for one of its printing
presses Purchase Attachment $55.000
Installation of attachment $5.000
Replacement parts for renovation press $18.000
Labor and overhead in connection w/ renovation of press $7.000
Labor and attachment nor the renovation increases the estimated useful life of the
press. However, the renovation resulted in significantly increased productivity. What
amount of the costs should be capitalized?
a. $0
b. $67.000
c. $78.000
d. $85.000
32. Lazy Builders Inc. has incurred the following contract costs in the first year on a
twoyears fixed price contract for $4.0 million to construct a bridge Material cost = $2
Million Other Contract Costs (Include site labor costs) = $1 Million Cost to Complete
= $2 Million How much profit/loss should Lazy Inc. recognize in the first year of the
three-year construction contract?
a. Loss of $0.5 Million prorated over two years
b. Loss of $1.0 Million (expensed immediately)
c. NO Profit or Loss in the first year and deferring it to second year
 d. Since 60% is the percentage of completion, recognize 60% of loss (i.e. $0.6
Million)
33. Brilliant Inc. is constructing a skyscraper in the heart of town and has signed a fixed
price two-year contract for $21.0 Million with the local authorities. It has incurred the
following cost relating to the contract by the end of fitst year:
Material Cost = $5 Million
Labor Cost = $2 Million
Construction Overhead = $2 Million
Marketing Cost = $0.5 Million
Depreciation of the idle plant & equipment = $0.5 Million
At the end of the first year, it has estimated cost to complete the contract = $9
Million. What profit/loss from the contract should Brilliant Inc. recognize at the end
of the first year?
a. $1.5 Million
b. $1.0 Million
c. $1.05 Million
d. $1.28 Million
34. Bruner Constructions Inc. has consistently used the percentage of completion method
of recording income. In 2015, Bruner started work on a $42.000.000 construction
contract that was completed in 2016. The following information was taken from
Bruner’s 2014 accounting records: Progress Billings $18.200.000 Costs Incurred
$12.600.000 Collections $8.400.000 Estimated cost to complete $25.200.000 What
amount of gross profit should Bruner have recognize in 2015 on this contract?
a. $4.200.000
b. $2.800.000
c. $2.100.000
d. $1.400.000
35. NENN Co. allowance for uncollectible accounts was $115.00 at the end of 2015 and $
95.000 at the end of 2014. For the year ended December 31, 2015, NENN reported
bad debt expense of $23.000 in its income statement. What amount did NENN debit
to the appropriate account in 2015 to write off actual bad debts?
a. $2.000
b. $3.000
c. $20.000
 d. $43.000
36. On January 1, 2015. Beyer Co. issued a building to Heins Co. for a ten years term at
an annual rental of $80.000. At the inception of the lease, Beyer received $320.000
covering the first two-years rent of $160.000 and a security deposit of $160.000. This
deposit will not be returned to Heins upon expiration of the lease but will be applied
to payment of rent for the last two years of the lease. What portion of the $320.000
should be shown as a current and non-current liability respectively, in Beyer’s
December 31, 2015 statement of financial position?
Current Liability Non-Current Liability
a. $0 $320.000
b. $80.000 $160.000
c. c. $160.000 $160.000
d. $160.000 $80.000
37. On 1 July 2012, NALL Co. issued 2500 shares of its $10 par ordinary share and 5000
share of its $10 convertible preference share for a lump sum of $125.000. NALL’s
ordinary shares were selling for $24/share and the convertible preference shares for
$18/share. The amount of the proceeds allocated to NALL preference shares should
be:
a. $62.000
b. $75.000
c. $90.000
d. $68.750
38. On January 2, Matthews Corp. acquired 20% of the outstanding common stock of
Edmond Co. for $350.000. For the year ended December 31, Edmond’s reported Net
Income of $90.000 and paid dividends of $30.000 on its common stock. At Dec 31,
the carrying value of Matthews Investment in Edmonds under the equity method is:
a. $344.000
b. $350.000
c. $356.000
d. $362.000
39. Litke Company issued at a premium of a $100.000 bond issue convertible into 2000
ordinary shares (par value $40). At the time of the conversion, the unamortized
premium is $2.000, the market value of the bond is $110.000 and the shares are
 quoted on the market at $60/share. If the bonds are converted ordinary shares, what is
amount of share premium to be recorded on the conversion of the bonds?
A. $25.000
B. $22.000
C. $32.000
D. $40.000
40. On December 31, 2015, the equity section of Arndt Inc. was as follows:
Share capital-ordinary, par value $10; authorized 30.000 shares
Issued and outstanding 9000 shares $90.000
Share premium-ordinary $116.000
Retained Earnings $174.000+
Total Equity $380.000
On March 31, 2016, Arndt declared a 10% share dividends, and accordingly 900
additional shares were issued, when the fair value was $18 per share. For the three
months ended March 31, 2016 Arndt sustained a net loss of $32.000. The balance of
Arndt’s Retained Earnings as of March 31, 2016 should be:
a. $125.800
b. $133.000
c. $134.800
d. $142.000
41. Didde Co. had 300.000 ordinary shares issued and outstanding at December 31, 2015.
No ordinary shares were issued during 2016. On January 1, 2016 Didde issued
200.000 shares of non-convertible preference share. During 2016, didde declared and
paid $100.000 cash dividends on the ordinary shares and $80.000 on the preference
shares. Net income for the year ended December 31, 2016 was $620.000. what should
Didde 2016 earnings per share?
a. $2.07
b. $1.80
c. $1.73
d. $1.47
42. Ringler Corporation exchanges one plant asset for a similar plant asset and gives cash
in the exchange. The exchange is not expected to cause a material change in the future
cash flows for either entity. If a gain on the disposal of the old asset is indicated, the
gain will:
 a. Effectively reduce the amount to be recorded as the cost of the new asset
b. Be credited directly to the retained earnings account
c. Be reported in the Other Income and expense section of the income statement
d. Effectively increase the amount to be recorded as the cost of the new asset
43. Which of the following should be reported as a prior period adjustment?
a. Change in Estimated Lives of Depreciation: Yes, Change from Unaccepted
Principle to Accepted Principle: Yes
b. Change in Estimated Lives of Depreciation: No, Change from Unaccepted
Principle to Accepted Principle: No
c. Change in Estimated Lives of Depreciation: Yes, Change from Unaccepted
Principle to Accepted Principle: No
d. Change in Estimated Lives of Depreciation: No, Change from Unaccepted
Principle to Accepted Principle: Yes
44. At December 31, 2010, the following information was available from Kohl Co.’s
accounting records Inventory, 1/1/10 Cost $147,000 Retail $203,000 Purchases Cost
$833,000 Retail $1,155,000 Additional Markups Retail 42,000 Available for Sale
Cost $980,000 Retail $1,400,000 Sales for the year totaled $1,050,000. Markdowns
amounted to $10,000. Under the lower-of-cost-or-net realizable value method, Kohl’s
inventory at December 31, 2010 was:
a. $294,000
b. $245,000
c. $238,000
d. $252,000
45. If inventory levels are stable or increasing, an argument which is not an advantage of
the LIFO method as compared to FIFO is:
a. Cost of goods sold tends to be stated at approximately current cost on the income
statement
b. Income taxes tend to reduce in periods of rising prices
c. Cost assignments typically parallel the physical flow of goods
d. Income tends to be smoothed as prices change over time
46. At the end of the fiscal year, Apha Airlines has an outstanding purchase commitment
for the purchase of 1 million gallons of jet fuel at a price of $4,60 per gallon for
delivery during the coming summer. The company prices its inventory at the LCNRV.
 If the market price for jet fuel at the end of the year is $4,25, how would this situation
be reflected in the annual financial statements?
a. Record unrealized gains of $350,000 and disclose the existence of the purchase
commitment
b. Disclose the existence of the purchase commitment
c. Record unrealized losses of $350,000 and disclose the existence of the purchase
commitment
d. No impact
47. On May 5, 2011, MacDougal Corp. exchange 2,000 shares of its $25 par value
treasury ordinary shares for a patent owned by Masset Co. The treasury shares were
acquired in 2010 for $45,000. At May 5, 2011, MacDougal’s ordinary shares was
quoted at $34 per share, and the patent had a carrying value of $55,000 on Masset’s
books. MacDougal should record the patent at:
a. $50,000
b. $55,000
c. $45,000
d. $68,000
48. The following information is available for Naab Company for 2010 : freight-in
$30,000 Purchase returns : $75,000 Selling expenses : $150,000 Ending inventory :
$260,000. The cost of goods sold is equal to 400% of selling expenses. What is the
cost of goods available for sale?
a. $600,000
b. $860,000
c. $890,000
d. $815,000
49. Net income is understated if, in the first year, estimated residual value Is excluded
from the depreciation computation when using the:
a. Straight-line Method: No, Production or Use Method: No
b. Straight-line Method: Yes, Production or Use Method: Yes
c. Straight-line Method: Yes, Production or Use Method: No
d. Straight-line Method: No, Production or Use Method: Yes
50. Assume that the client’s valuation of an inventory item is $10 per unit for 1,000 units,
using FIFO. If the most recent acquisition of inventory was for 400 units at $10 per
 unit and the immediately preceding acquisition was for 700 units at $9.5 per unit, the
inventory item is in error and it is:
a. Understated $300
b. Overstated $300
c. Understated $400
d. Overstated $400
51. Which of the following is a method to generate cash from accounts receivable?
a. Assignment: No Factoring: No
b. Assignment: No Factoring: Yes
c. Assignment: Yes Factoring: No
d. Assignment: Yes Factoring: Yes
52. Hite Co. was formed on January 2, 2010, to sell a single product. Over a two-year-
period, Hite’s acquisition costs have increased steadily. Physical quantities held in
inventory were equal to three months’ sales at December 31, 2010, and zero at
December 31, 2011. Assuming the periodic inventory system, the inventory cost
method which reports the highest amount of each the following is:
A. Inventory December 31, 2010: Average Cost of Sales 2011: FIFO
B. Inventory December 31, 2010: Average Cost of Sales 2011: Average
C. Inventory December 31, 2010: FIFO Cost of Sales 2011: FIFO
D. Inventory December 31, 2010: FIFO Cost of Sales 2011: Average
53. In 2010, Orear Manufacturing signed a contract with a supplier to purchase raw
materials in 2011 for $700,000. Before the December 31, 2010 statement of financial
position date, the market price for these materials dropped to $510,000. The journal
entry to record this situation at December 31, 2010 will result in a credit that should
be reported
a. As a valuation account to Inventory on the statement of financial position
b. As an appropriation of retained earnings
c. On the income statement
d. As a current liability
54. Which of the following is true regarding the use of LIFO for inventory valuation?
a. If LIFO is used for external financial reporting, then it cannot be used for tax
purposes
b. For purposes of external financial reporting, LIFO may not be used with the
lower of-cost-or-net realizable value approach
 c. If FIFO is used for external financial reporting, then it must also be used for
internal reports
d. None of these
55. Ryan Distribution Co. has determined its December 31, 2010 inventory on a FIFO
basis at $250,000. Information pertaining to that inventory follows: Selling Price
$255,000 Cost to Sell $10,000 Cost to Complete $30,000 Ryan records losses that
result from applying the lower-of-cost-or-net realizable value rule. At December 31,
2010 the loss that Ryan should recognize is:
a. $5,000
b. $35,000
c. $0
d. $25,000
56. In preparing its August 31, 2010 bank reconciliation, Bing Corp. has available the
following information: (8/31/10) Balance per bank statement, $21,650 (8/31/10)
Deposit in transit, $3,900 (8/30/10) Return of customer’s check for insufficient funds,
$600 (8/31/10) Outstanding checks, $2,750 Bank service charge for August $100. At
August 31, 2010, Bing’s correct cash balance is:
a. $20,500
b. $22,800
c. $22,200
d. $22,100
57. On January 2, 2010, York Corp. replaced its boiler with a more efficient one. The
following information was available on that date: Purchase price of new boiler
$150,000 Carrying amount of old boiler $10,000 Fair Value of old boiler $4,000
Installation cost of new boiler $20,000 The old boiler was sold for $4,000. What
amount should York capitalize as the cost of the new boiler?
a. $170,000
b. $150,000
c. $166,000
d. $160,000
58. Compared to the accrual basis of accounting, the cash basis of accounting overstates
income by the net increase during the accounting period of the:
a. Accounts Receivable: No, Accrued Expenses Payable: Yes
b. Accounts Receivable: Yes, Accrued Expenses Payable: No
 c. Accounts Receivable: Yes, Accrued Expenses Payable: Yes
d. Accounts Receivable: No, Accrued Expenses Payable: No
59. Presented below are data for Antwerp Corp. Assets, January 1, 2011 : €2,800 2012 :
€3,360 2013 : ??? Liabilities, January 1 2011 : €1,680 2012 : ??? 2013 : €2,016
Shareholder’s Equity, Jan 1 2011 : ??? 2012 : ??? 2013 : €2,100 Dividends 2011 :
€560 2012 : €420 2013 €476 Increase in Share capital-ordinary 504 448 500 2011 :
€504 2012 : €448 2013 : €500 Shareholder’s Equity, Dec 31 2011 : ??? 2012 : ???
2013 : €1,596 Net Income 2011 : €560 2012 : €448 2013 : ??? Shareholder’s Equity at
January 1, 2011 is:
A.€560
B.€1,624
C.€1,120
D.€504
60. When depreciation is computed for partial periods under a diminishing-charge
depreciation method, it is necessary to:
a. Use a residual value equal to the first year’s partial depreciation charge
b. Use the straight-line method for the year in which the asset is sold or otherwise
disposed of
c. Determine depreciation expense for the full year and then prorate the expense
between the two periods involved
d. Charge a full year’s depreciation to the year of acquisition
61. Caroline, Inc. hired a new controller in late 2011. The controller has not prepared
financial statements using IFRS before and need your assistance. In compiling a
complete set of financial statements under IFRS, in what order should the following
items be reported in the equity section on the statement of financial position at
December 31, 2011? If an item is not reported in the equity section, omit it from your
answer.
(I) Share Premium
(II) Retained Earnings
(III) Investment
(IV) Non-controlling interest
(V) Accumulated Comprehensive Income
(VI) Share Capital
A. III, VI, I, II, IV, V
 B. VI, I, II, V, IV
C. VI, I, IV, II, V
D. I, VI, IV, II, V, III
62. Henke Co. uses the retail inventory method to estimate its inventory for interim
statement purposes. Data relating to the computation of the inventory at July 31, 2010,
are as follows: Inventory, 2/1/10 Cost : $200,000 Retail : $250,000 Purchases Cost :
$1,000,000 Retail : $1,575,000 Markups, net Retail : $175,000 Sales Retail :
$1,750,000 Estimated normal shoplifting losses Retail : $20,000 Markdowns, net
Retail : $110,000 Under the lower-of-cost-or-net realizable value method, Henke’s
estimated inventory at July 31, 2010 is:
A. $96,000
B. $84,000
C. $120,000
D. $72,000
63. Watts Corporation made a very large arithmetical error in the preparation of its year-
end financial statements by improper placement of a decimal point in the calculation
of depreciation. The error caused the net income to be reported at almost double the
proper amount. Correction of the error when discovered in the next year should be
treated as:
a. Prior period adjustment
b. An other expense item for the year in which the error was made
c. An increase in depreciation expense for the year in which the error is discovered
d. Component of income for the year in which the error is discovered, but separately
listed on the income statement and fully explained in a note to the financial
statements.
64. The fifo method of process costing differs from the average cost method of processing
costing in that fifo:
a. Considers the stage of completion of beginning work in process in computing
equivalent units of production, but the average cost method doesn’t.
b. Allocates costs based on whole units, but the average cost method uses equivalent
units
c. Is applicable only to those companies using the fifo inventory pricing method, but
the average cost method may be used with any inventory pricing method
 d. Does not consider the stage of completion of beginning work in process in
computing equivalent units of production, but the average cost method does
65. It is mandatory that the essential provisions of which of the following be clearly stated
in the notes to the financial statements?
a. Pension Obligations
b. All of these
c. Lease Contracts
d. Stock Options Plans
66. At the following would not be uncovered by a bank reconciliation EXCEPT for:
a. improper payments of officers' personal expenditures.
b. payments on notes payable debited directly to the bank account by the bank but
not recorded on the books.
c. duplicate payment of a vendor's invoice.
d. payment to an employee for more hours than he worked
67. A plant asset with a five-year estimated useful life and no residual value is sold at the
end of the second year of its useful life. How would using the sum-of-the years’ –
digits method of depreciation instead of the double declining balance method of
depreciation affect a gain or loss on the sale of the plant asset?
a. Gain: Increase Loss: Increase
b. Gain: Decrease Loss: Decrease
c. Gain: Increase Loss: Decrease
d. Gain: Decrease Loss: Increase
68. On January 1, 2007, Russell Company purchased a copyright for $1,000,000, having
an estimated useful life of 16 years. In January 2011, Russell paid $150,000 for legal
fees in a successful defense of the copyright, Copyright amortization expense for the
year ended December 31, 2011, should be
a. $62,500
b. $71,875
c. $75,000
d. $0
69. Of the following costs related to the development of mineral resources, which one is
not a part of depletion cost?
a. Acquisition cost of the mineral resource deposit
b. Intangible development costs such as drilling costs, tunnels, and shafts
 c. Exploration costs
d. Tangible equipment costs associated with machinery used to extract the mineral
resource
70. On January 1, 2010, Huff Co. sold $1,000,000 of its 10% bonds for $885,296 to yield
12% interest is payable semi-annually on January 1 and July 1. What amount should
Huff report as interest expense for the six months ended June 30, 2010?
a. $60,000
b. $44,266
c. $50,000
d. $53,118