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QUESTIONS AND ANSWERS FOR FINANCIAL ACCOUNTING 1

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Tổng hợp các câu hỏi trắc nghiệm và đáp án thường thấy trong các đề kiểm tra giữ kỳ và kết thúc học phần của bộ môn Financial and Accounting 1 tại Đại học UEH. Câu hỏi bài tập sẽ có lời giải chi tiết.

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1 Current assets include cash and all other assets expected to become cash or be consumed: Within one year or one operating cycle, whichever is longer

2 The allowance for uncollectible accounts is a:Contra asset account

3 The net assets of a corporation are equal to:Shareholders’ equity

4 Which of the following transactions has no effect on the profit presented in the income

statement for the period? Paying dividends to shareholders

5 Cash flows from investing activities do not include:Proceeds from issuing bonds.

6 In a perpetual inventory system, the cost of inventory sold: Debited to cost of goods sold.

7 When a company purchases inventory on credit:Its quick ratio decreases.

8 Which of the following is not true about net operating cash flow?It is a measure used in accrual accounting and is recognized as the best predictor of future operating cash flow

9 What is the effect on each of the following accounts of the collection of an account previously written off?Allowance for uncollectible accounts: unchanged: Accounts Receivable: unchanged -> DR 111,112/CR 711

10 Adjustment entries before closing the income statement are made based on which accounting principle:Matching

11 In case of liquidation of fixed assets that are still of use value and cash collection, the following accounts shall be recorded:Increase income, increase costs

12 If a company has gone bankrupt, its financial statements likely violate: The going concern assumption.

13 Inventory does not include: Equipment used in the manufacturing of assets for sale.

14 Rent collected in advance is:A liability account in the statement of financial position

15 The difference between single-step and multiple-step income statements is primarily an issue of: Reporting (presenting)

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16 In comparing the direct method with the indirect method of preparing the statement of cash flows: Only operating activities are presented differently

17 A company reported cost of goods sold of $2,000,000 this year The inventory account

increased by $200,000 during the year to an ending balance of $400,000 What was the

cost of merchandise that the company purchased during the year?$2,200,000 (2,000,000+200,000)

18 Inventory was acquired in 2013 at a cost of $40,000 A qualified appraiser placed its value

at $48,000, and a recent firm offer for the inventory was for a cash payment of $46,000 The inventory should be reported in the financial statements at: $40,000 (the min of cost

and NRV)

19 Accounts receivable are normally reported at the: Net amount to be received.

20 At the beginning of October, the company shipped out the shipment for sale with a total

selling price of VND 100,000,000 Due to a promotion program, the company offers

customers a maintenance voucher with a period of 12 months from the beginning of

October Knowing this maintenance service has a reasonable value of VND 1,200,000 On the year-end income statement, revenue from sales and services is present in the amount (unit: VND): 99.110,672 (= 98,814,229 + 1,185,770*3/12)

● ALLOCATE: 100,000,000 250/253 % 98,814,229

● 1,200,000 3/253 % 1,185,770 101,200,000 100 % 100,000,000

21 Time of reversal of provision for impairment of Inventories: At the end of the accounting period when preparing the financial statements

22 Revenue should not be recognized until: The risks and rewards of ownership have transferred from seller to buyer

23 An asset that is not expected to be converted to cash or consumed within one year or the

operating cycle is: Goodwill

24 Company X has determined its year-end inventory on a FIFO basis to be $600,000 at cost.

Information pertaining to that inventory is as follows: Selling price: $620,000; Disposal costs: 30,000 What should be presented as this company inventory on the Statement of

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Financial position? $590,000 (the min of cost and NRV)

25 Which of the following is NOT part of the Income statement:Prepaid expenses

26 Under VAS, operating cash flows would include: Interest paid.

27 Accrued expenses: Result from services received before payment

28 Which of the following defines “liabilities”?Present obligation that is expected to result

in an outflow of economic benefits.

29 At the end of the financial year, the company has a bond payable of VND 1,000,000,000

with a term of 5 years The bonds are paid periodically each year in equal amounts and the first payment is due at the end of March of the following year Information on payable bonds is presented in the statement of financial position as follows (unit: thousand dong):

Short-term liabilities: 200,000 and Long-term liabilities: 800,000 VND

30 Balance at the beginning of the period: cost of goods A: 100 unit * 100,000 VND,

provision has been made for 100 unit * 30,000 VND/ unit In the period the enterprise sells

60 unit, unit price is 80,000 VND (0% VAT), at the time of sale, accountants determine

cost and revenue, respectively: 6,000,000; 4,800,000 VND (provision of inventory not effect on selling)

31 Schneider Ltd had salaries payable of $60,000 and $90,000 at the end of 2012 and 2013,

respectively During 2013, Schneider recorded $620,000 in salary expenses in its income

statement Cash outflows for salaries in 2013 were: $590,000 (=620-(90-60))

32 The enterprise liquidated one production equipment with the original cost of 164,000,000

VND, accumulated depreciation is 153,000,000 VND Income from selling this equipment

in the form of scrap is collected in cash 2,500,000 VND Accountants record this entry as

follows (unit: thousand dong): Dr 811: 11,000, Dr 214: 153,000/ Cr 211: 164,000 and Dr 111:2,500/ Cr 711:2,500

33 Office equipment has original cost of 170,000,000 VND, accumulated depreciation is

34,000,000 VND So, information about office equipment on the Financial Statement is

presented as follows: Tangible fixed assets: VND 136,000,000.- Cost: 170,000,000 VND,

- Accumulated depreciation: (34,000,000 VND)

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34 During the year, company K wrote off bad debts of 4,000 Before this entry, the balance of

accounts receivable from customers was 50,000 and the balance of provision account for

bad debts was 4,500.net bad debts after write-off of receivables is: 45,500 (write off not effect on bad debt expense)

35 In the Statement of Financial Position at the end of its first year of operations, Company D

reported an allowance for uncollectible accounts of $82,000 During the year, Company D wrote off $32,000 of accounts receivable they had attempted to collect and failed Credit sales for the year were $2.200,000, and cash collections from credit customers totaled

$1.950,000 What bad debt expense would company D report in its first-year Statement of Profit or Loss? $114,000 (82+32)

36 At the end of the year, the accountant determines the amount of bad debts that need to be

made provision to be 30 million dong, knowing the opening balance of account 2293 is 10

million dong, the following accounts shall be recorded: Dr 642/Cr 2293 20 million dong

37 Telcoba Ltd's trial balance included the following account balances at December 31, 2019:

Accounts receivable: $10,000: Inventories 40,000; Patent: 12.000; Investments: 30,000; Prepaid insurance: 6,000; Note receivable, due 2022:50,000 Investments consist of treasury bills that were purchased in December and mature in next February Prepaid insurance is for the next two years What amount should be included in the current asset

section of Telcoba's December 31, 2019, statement of financial position? $83,000

38 At the end of June, the company shipped 12,000,000 worth of tools to the management

department with an estimated useful life of 12 months Recorded accounting (accounting period calculated according to the calendar year): Dr 242: 12,000,000/ Cr 153: 12,000,000 and at the end of amortization period Dr 642: 6,000,000 / Cr 242: 6,000,000

39 At the end of the month, the accountant gathers the cost of significant repairs Fixed assets

at the sales department include: materials used: 500,000 Cash spent: 1.100.000 (including 10% VAT) The repair has not been completed, the accountant records (unit: thousand

dong): Dr 2413: 1.500, Dr 133: 100/Cr 152: 500, Cr 111: 1,100

40 How many sub-statements does a typical financial statement have?4 (Financial position, income statement, notes and cash flow)

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41 Who are the main users of the financial accouting information?extenal (investor, creditor, author, customer, )

42 Which statement shows how a company uses money? cash flow statement

43 Managers only uses managerial accounting information for running their businesses -> No (FALSE)

44 Which circular could be applied for all kinds of companies? Cir 200

45 Balance sheet is the another name of: Statement of financial position

46 Which statement shows how a company earns money? Income statement

47 Which documents are applied only for Small and Medium enterprises? Cir 133

48 Financial statements are prepared by: Accounting department

49 Which statements show financial situation of a company: all the financial statement

50 Which legal documents could be applied for all kinds of companies? ALL (Cir 200, Vas, accounting law)

51 Liquidity refers to: The readliness of asset to be converted to cash

52 Intangible assets usually are reported in the statement of financial position as current assets: FALSE

53 The ultimate responsibility for the financial statements lies with the auditors: FALSE

54 Which is the shareholders' equity account in the statement of financial position? Issued capital

55 Long – term assets include machinery, equipment and inventories: False

56 All current assets are either cash or assets that will be converted into cash or consumed within twelve months or operating cycle, if that is longer than one year -> TRUE

57 The statement of financial position reports a company’s financial position at a point in time-> TRUE

58 Assets do not include: Issued capital

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59 Accrued salaries and wages in a statement of financial position represent salary and wages

that have been earned by employees but not yet paid -> TRUE

60 Cash equivalents would include Cash which is not available for current operations -> FALSE

61 Prepaid expenses are classified as current assets if the services purchased are expected to expire within twelve months or the operating cycle, if that is longer -> TRUE

62 The balance of net receivables represents the amount expected to be collected -> TRUE

63 The statement of financial position reports: Assets and equities at a point in time

64 Why do many Income statements distinguish between Revenue and Other Incomes (Gains)? Help analysts better predict the future cash-flows

65 On the SCF, Cash received from sales of products to customers is reported as: Cash flows from operating activities

66 There are two methods for reporting operating activities: Indirect and Direct

67 A practice which a company pursuing its distributors to purchase more of its product than necessary near the end of a reporting period is called:Channel stuffing

68 What is the purpose of the statement of cashflows? To summarize the cash inflows and cash outflows in a period

69 On the SCF, Cash received from the capital contribution is reported as: Cash flows from financing activities

70 Cash flows are classified into 3 sections on the Statement of Cashflows These 3 sections are: Operating, Investing, Financing activities

71 What is the purpose of the income statement? To summarize the profit-generating activities occurring in a period

72 What is the purpose of the Statement of Cash flows? Provide relevant information about the amount of cash and cash equivalents which are received and paid for a period of time

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73 On the SCF, Cash received from sales of long-term assets used in the business is reported as: Cash flows from investing activities

74 A manufacturing company sells its product (which costs 60 millions VND) to a customer for 100 millions VND cash The amount of 100 millions VND is classified as: REVENUE

75 A manufacturing company sells its product (which costs 60 millions VND) to a customer

for 100 millions VND cash The amount of 60 millions VND is classified as: Expenses

76 Matching principle influences revenue the most

77 Revenue is: Economic interests that a company earns during a period

78 In the income statement, revenue is measured by: Unit of currency

79 Which documents affect service revenue in Vietnam: VAS 14

80 Which documents affect revenue in Vietnam: VAS 14, VAS 15, CIR 200

81 Customer loyalty program requires company to: Deferred revenue to a later period

82 ROA is calculated by: Returns divided by Average balance of assets

83 Unit of turnover is: NUMBER OF TIME

84 Another name of return: profit

85 Why should we use the average of Equity when calculating ROE? In order to make equity best fit to returns

86 In a good system of internal control, the person who initiates a transaction should be

allowed to effectively control the processing of the transaction through its final inclusion

in the accounting records -> FALSE

87 Which of the following does not change the balance in accounts receivables? BAD DEBT EXPENSE, RECOVERY

88 The allowance for uncollectible account is a: Contra asset account

89 A Company should provide for bad debts on an accounts receivable balance when it

is portable that the account receivable balance has been uncollectible

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90 The receivables turnover ratio provides a way for an analyst to assess the effectiveness of a company in managing its investment in receivables -> FALSE

91 From a financial accounting perspective, the main purposes of a system of internal control are to improve the accuracy and reliability of accounting information to safeguard assets

92 Cash may not include: Restricted cash

93 Cash equivalents would include Cash which not available for current operations: FALSE

94 Cash equivalents would include investments in marketable equity securities as long as management intends to sell the securities in the next three months: FALSE

95 VAS allows an overdraft in a cash account at one bank to be offset against a positive

balance in the account at another bank for purposes of reporting cash on the company’s

Statement of Financial Position: FALSE

96 Account receivable are normally reported at the: net amount to be received

97 Account 152 is used to record: in-stock materials

98 We _ inventories accounts when receiving trade discounts: credit

99 A set of tools are issued from the warehouse to be used up in 1 accounting period for administrative operation Journal entry for this transaction is: DR 642/CR 153

100 Which cost should be excluded from Inventory? Freight-out (distribution cost)

101 Inventories includes: Goods used for sales /Partially finished goods waiting for completion and eventually sale / Materials used in production process

102 We _ inventories accounts when returning goods to the supplier: CREDIT

103. A set of tools are issued from the warehouse to be used in 3 accounting periods for administrative operation Journal entry for this transaction is: DR 242/CR 153

104. Account 151 is used to record: Goods in transit at the end of the month

105. We _ inventories accounts when receiving goods: DEBIT

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106. Accounts used to record cost of manufacturing inventories are:

621,622,627,154,155

107. ABC company ships $10,000 of merchandise to XYZ company on November 28 and the merchandise arrives at XYZ's warehouse on December 1 Shipping terms state that XYZ takes on ownership of the merchandise as soon as they leave ABC's shipping dock

XYZ should record an inventory on: NOVEMBER 28

108. ABC ships $10,000 of merchandise to XYZ on November 28 and the merchandise arrives at XYZ's warehouse on December 1 Shipping term states that ownership transfer

to the buyer as soon as the shipment arrives at the buyer XYZ should record an inventory

on: DECEMBER 1

109. ABC ships $10,000 of merchandise to XYZ on November 28 and the merchandise arrives at XYZ's warehouse on December 1 Shipping term states that ownership transfer

to the buyer as soon as the shipment arrives at the buyer On November 28, XYZ should

record this merchandise as: XYZ should not record until the shipment arrives

110. A company should provide for bad debts on an accounts receivable balance when it

is probable that the accounts receivable balance has been uncollectible: FALSE

111. The balance of net receivables represents the amount expected to be collected:

TRUE

112. What differentiate the International standards from VAS in accounting method for property, plant and equipment?

· Under international standards both the cost model and revaluation model are allowed

· Under international standards, tests for impairment when events or changes in circumstances indicate that book value may not be recoverable

· Both are correct.

113. Any change in depreciation method or depreciation estimation should be applied:

prospectively

114. How the cash flows of a company is affected by the depreciation of an fixed asset

which is used for administrative purposes? Asset decrease, expense increase.

115. How the financial status of a company is affected by the depreciation of an fixed

asset which is used for administrative purpose? Asset decrease, expense increase.

116 Under VN regulation, Account 214 ending balance shows: accumulated depreciation

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117 Under VAS, which asset should not be depreciated/ amortized? Permanent land use right.

118 Which depreciation method is based on activity level of fixed asset? Units – of – production.

119. Which time-based depreciation method results in greater amounts in the early years

and less each succeeding year of the asset’s life? Declining balance.

120. Which depreciation method results in the same amount of depreciation in each year

of the asset’s life? Straight line

121 Under VAS, which depreciation method is not allowed? Sum of the year digits

122. Under VAS, the total amount which should be depreciated during useful life of an

asset is: cost less (-)residual value at the end of its useful life

123 Depreciation, depletion and amortization are cost allocation processes.

124 Subsequent expenditures should be capitalized in the value of a fixed asset when It

is probable that the expenditures increase the future economic benefit of the asset

125. Expenditures which are incurred after a fixed asset is recognized in the financial statement (called “subsequent expenditures”) are always capitalized in the value of the

asset? FALSE.

126 Donated assets are recorded at: fair value

127 Tangible fixed assets exclude: patent

128. The initial cost of property, plant, and equipment includes all the identifiable expenditures necessary to bring the asset to its desired condition and location for use

TRUE.

129. Property, plant, and equipment and intangible assets are long – term, revenue

producing assets TRUE.

130 Property, plant, and equipment, investment property and intangible assets are: long term revenue-producing assets.

131 The fixed- assets turnover ratio provides: the amount of sales generated per dollar of fixed assets.

132. When selling fixed assets funded by long-term loans, the remaining value of fixed

assets will be subtracted from the original loans FALSE.

133 Under VAS, development expenditures are capitalized if certain criteria are met.

134. On the statement of financial position, section “fixed assets” excludes :

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