INTERMEDIATE ACCOUNTING PART 3

NAME:_________________________________________________________________ DATE:_______________________________

MULTIPLE CHOICE.
1. What is the underlying concept that supports the immediate recognition of a contingent loss?
a. Substance over form.
b. Consistency.
c. Matching.
d. Conservatism.
2. Real Accounts are all of the following, except:
a. Assets
b. Income
c. Liabilities
d. Equity
3. What provides “the why” or the goal and purpose of accounting?
a. Measurement and recognition concept
b. Importance of Financial Accounting
c. Objecting of Financial Reporting
d. Qualitative Characteristics of accounting information
4. Which of the following attributes would not be used to measure inventory?
a. Historical Cost
b. Replacement Cost
c. Present Value of Future cash flows
d. Net realizable value
5. The assumption that an entity will not be sold or liquidated in the near future is known as
a. Going concern assumption
b. Monetary Unit assumption
c. Economic Entity assumption
d. Materiality assumption
6. Economic Entity assumption
a. Requires periodic income measurement
b. Is applicable to all forms of business organizations
c. Is the assumption that an entity will not be sold or liquidated in the near future
d. Recognizes the business aspects of business organizations
7. Bank overdraft should be
a. Recognize as contra asset to cash
b. Reported as a deduction from the current asset section
c. Reported as a current liability
d. Netted against cash and a net cash amount should be reported
8. Cash Basis of accounting recognizes:
Income Accounts Receivable Unearned Revenue Prepaid Expense
a Yes Yes Yes Yes
b No Yes Yes Yes
c Yes No No No
d Yes No Yes Yes
OOPS, Inc. reported the following cash and cash equivalents at the end of 2019:
Cash in Bank P100,000
Petty Cash Fund 10,000
Treasury Bills, maturity: April 15, 2019 5,000
Treasury Bills, maturity: March 30,2019 3,000
9. The correct amount of cash to be reported at year end is:
a. 100,000 c. 118,000
b. 113,000 d. 110,000
10. The correct amount of cash and cash equivalents to be reported at year end is:
a. 100,000 c. 118,000
b. 113,000 d. 110,000
In preparing its December 31, 2019 bank reconciliation, QZ AGAD Corp. has the following information:
Balance per bank statement, 12/31/2019 Php 18,050
Deposit in transit, 12/31/2019 3,250
Return of customer’s check for insufficient funds, 12/31/2019 600
Outstanding checks, 12/31/2019 2,750
Bank service charges for December 100
11. At December 31, 2019, QZ AFAD’s correct cash balance is
a. $18,550
b. $17,950
c. $19,250
d. $17,850
12. The unadjusted cash balance per book is
a. $18,550
b. $17,950
c. $19,250
d. $17,850
13. Asset – Liability = Equity
a. True
b. False
14. The objectives of financial reporting are based on Generally accepted accounting principles.
a. True
b. False
15. The LIFO and FIFO cost flow assumptions are allowed for inventories.
a. True
b. False