MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC

Multiple Choices

1. An example of a correction of an error in previously issued

financial statements is a change [22]
a. From the FIFO method of inventory valuation to the average
cost method
b. In the service life of plant assets, based on changes in the
economic environment
c. From the cash basis of accounting to the accrual basis of
accounting
d. In the tax assessment related to a prior period

2. If non-cash investing and financing activities are part cash and

part non-cash, which of the following is true? [23]
a. Companies should report only the cash portion on the
statement of cash flows and ignore the non-cash component
b. Companies should report the non-cash component in a
separate note and report the cash portion on the statement
of cash flows
c. Companies should report the cash portion lass the cash
equivalent of the non-cash component on the statement of
cash flows
d. None of these answer choices are correct (kalo 1 cash 1 non
cash itu masuknya ke notes)

3. If there is a lack of conformity with IFRS, but except for the

effects of that nonconformity, the financial statements are fairly
presented, what type of opinion is required? [24]
a. Unqualified opinion
b. Qualified opinion
c. Adverse opinion
d. A disclaimer of an opinion
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
4. Which of the following is not a segment asset of an operating
segment? [24]
a. Assets used jointly by more than one segment
b. Assets directly associated with a segment
c. Assets maintained for general corporate purposes
d. Assets used exclusively by a segment

5. If, at the end of a period, a company erroneously excluded

some goods from its ending inventory and also erroneously did
not record the purchase of these goods in its accounting
records, these errors would cause [22]
a. The ending inventory and retained earnings to be
understated
b. The ending inventory cost of goods sold, and retained
earnings to be understated
c. No effect on net income, working capital, and retained
earnings
d. Cost of goods sold and net income to be understated

6. All of the following are arguments in favor of using the indirect

(reconciliation) method as opposed to the direct method for
reporting a statement of cash flows except: [23]
a. By providing reconciliation between net income and cash
provided by operations, the differences are highlighted
b. The direct method is nothing more than a cash basis income
statement which will confuse and create uncertainty for
financial statement users who are familiar with the accrual-
based income statements
c. The direct method would probably lead to additional
preparation cost because the financial records are not
maintained on a cash basis
d. The indirect method shows higher quality cash flows from
investing and financing activities
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
7. All of the following are exemptions to retrospective application
in first-time adoption of IFRS except [22]
a. Estimates
b. Hedge accounting
c. Non-controlling interest
d. Deferred taxes

8. A segment is considered to be significant if its [24]

1. Reported profit is at least 10% of the combined profit of all
operating segments.
2. Reported profit (loss) is at least 10% of the combined
reported profit of all operating segments not reporting a loss.
3. Reported profit (loss) is at least 10% of the combined
reported loss of all operating segments that reported a loss.
a. 1
b. 2
c. 3
d. both 2 and 3

9. Accrued salaries payable of $51,000 was not recorded at

December 31, 2015. Office supplies on hand of $24,000 at
December 31, 2016 were erroneously treated as expense
instead of supplies inventory.
Neither of these errors was discovered nor corrected. The
effect of these two errors would cause [22]
a. 2016 net income to be understated $75,000 and December
31, 2016 retained earnings to be understated $24,000.
b. 2015 net income and December 31, 2015 retained earnings
to be understated $51,000 each.
c. 2015 net income to be overstated $27,000 and 2016 net
income to be understated $24,000.
d. 2016 net income and December 31, 2016 retained earnings
to be understated $24,000 each.
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
10. Lindsay Corporation had net income for 2016 of
$3,000,000.
Additional information is as follows:
Depreciation of plant assets $1,200,000
Amortization of intangibles 240,000
Increase in accounts receivable 420,000
Increase in accounts payable 540,000
Lindsay's net cash provided by operating activities for 2016
was [23]
a. $4,560,000
b. $4,440,000
c. $4,320,000
d. $1,680,000

11. On January 15, 2015, Vancey Company paid property

taxes on its factory building for the calendar year 2015 in the
amount of $560,000.
In the first week of April 2015, Vancey made unanticipated
major repairs to its plant equipment at a cost of $1,400,000.
These repairs will benefit operations for the remainder of the
calendar year.
How should these expenses be reflected in Vancey's quarterly
income statements? [24]
Three Months Ended
3/31/15 6/30/15 9/30/15 12/31/15
a. $140,000 $606,667 $606,667 $606,667
b. $140,000 $1,540,000 $140,000 $140,000
c. $560,000 $1,400,000 $ -0- $ -0-
d. $490,000 $490,000 $490,000 $490,000

12. Pale Company has four manufacturing divisions, each of

which has been determined to be a reportable segment.
Common operating costs are appropriately allocated on the
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
basis of each division's sales in relation to Pale’s aggregate
sales.
Pale’s Delta division accounted for 40% of Pale's total sales in
2014.
For the year ended December 31, 2014, Delta had sales of
$5,000,000 and traceable costs of $3,600,000.
In 2014, Pale incurred operating costs of $350,000 that were
not directly traceable to any of the divisions.
In addition, Pale incurred interest expense of $360,000 in
2014.
In reporting supplementary segment information, how much
should be shown as Delta's operating profit for 2014?
[Advanced]
a. $1,400,000
b. $1,256,000
c. $1,260,000
d. $1,116,000

13. On January 1, 2013, Lake Co. purchased a machine for

$792,000 and depreciated it by the straight-line method using
an estimated useful life of eight years with no residual value.
On January 1, 2016, Lake determined that the machine had a
useful life of six years from the date of acquisition and will
have a residual value of $72,000.
An accounting change was made in 2016 to reflect these
additional data.
The accumulated depreciation for this machine should have a
balance at December 31, 2016 of [22]
a. $438,000
b. $462,000
c. $480,000
d. $528,000
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC

14. A company acquired a building, paying a portion of the

purchase price in cash and issuing a mortgage note payable to
the seller for the balance.
In a statement of cash flows, what amount is included in
investing activities for the above transaction? [23]
a. Cash payment
b. Acquisition price
c. Zero
d. Mortgage amount

15. Which of the following facts concerning plant assets should

be included in the summary of significant accounting policies?
[24]
Depreciation Method Composition
a. No Yes
b. Yes Yes
c. Yes No
d. No No

16. An inventory loss from a market price decline occurred in the

first quarter.
The loss was not expected to be restored in the fiscal year.
However, in the third quarter the inventory had a market price
recovery that exceeded the market decline that occurred in the
first quarter.
For interim reporting, the dollar amount of net inventory should
[Advanced]
a. Decrease in the first quarter by the amount of the market
price decline and increase in the third quarter by the amount
of the market price recovery
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
b. Decrease in the first quarter by the amount of the market
price decline and increase in the third quarter by the amount
of the decrease in the first quarter
c. Not be affected in the first quarter and increase in the third
quarter by the amount of the market price recovery that
exceeded the amount of the market price decline
d. Not be affected in either the first quarter or the third
quarter

17. On December 31, 2016, special insurance costs, incurred but

unpaid, were not recorded.
If these insurance costs were related to work in process, what is
the effect of the omission of accrued liabilities and retained
earnings in the December 31, 2016 statement of financial
position? [22]
Accrued Liabilities Retained Earnings
a. No effect No effect
b. No effect Overstated
c. Understated No effect
d. Understated Overstated

18. Peavy Corp.'s transactions for the year ended December 31,
2016 included the following:
Acquired 50% of Gant Corp.'s ordinary shares for $180,000
cash which was borrowed from a bank. [i]
Issued 5,000 of its preference shares for land having a fair
value of $320,000. [x]
Issued 500 of its 11% debenture bonds, due 2016, for
$392,000 cash. [f]
Purchased a patent for $220,000 cash. [i]
Paid $120,000 toward a bank loan. [f]
Sold non-trading investments for $796,000. [i]
Had a net increase in returnable customer deposits (long-term)
of $88,000. [f]
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC

Peavy’s net cash provided by investing activities for 2016 was

[23]
a. $296,000
b. $396,000 -> 796-220-180 gatau deh saya bingung
c. $476,000
d. $616,000

19. Fina Corp. had the following transaction during the quarter
ended March 31, 2015:
Payment of fire insurance premium for calendar year 2015
600,000
What amount should be included in Fina's income statement for
the quarter ended March 31, 2015? [24]
a. $600,000
b. $150,000 [600,000:4]
c. $300,500
d. $450,000

20. When a company issues interim financial statements,

extraordinary items should be [Advanced]
a. Allocated to the current and remaining interim periods of the
current year on a pro rata basis
b. Deferred and included only in the annual income statement
c. Included in the determination of net income in the interim
period in which they occur
d. Charged or credited directly to retained earnings so that
comparisons of interim results of operations will not be
distorted

Essay Questions
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
1. Discuss the accounting procedures for and illustrate the
following: [22]
(a) Change in estimate
Perubahan dalam estimasi (tidak didisclose kecuali material)
contohnya adalah perubahan estimasi manajemen
perusahaan terkait masa manfaat / umur ekonomis aktiva
(pemisalan: pada tanggal perolehan diestimasi mesin
memiliki masa manfaat 10 tahun, dan pada tahun ke-3
ternyata manajemen berasumsi dan mengestimasikan masa
manfaat mesin akan lebih dari 10 tahun). Contoh kasus lain
adalah perubahan estimasi dalam metode penyusutan
ataupun estimasi bad debts (uncollectible account
receivable). Changes in estimate berlaku prospectively dan
tidak perlu adanya adjustment entries.

(b) Correction of an error

Prosedurnya adalah as soon as company menemukan
adanya error, maka harus segera dikoreksi errornya.
Correction of error dari periode lalu as adjustment
beginning balance of current period’s R/E (disebut: prior
period adjustment). Adapun yang dimaksud dari correction
of an error adalah bagian kesalahan akuntansi seperti:
 SOFP error in classification
 Income Statement error (classification no effects to Net
Income)
 Counterbalancing Errors (c/: inventory) will be offset or
corrected over 2 periods
 Non-counterbalancing Errors: tidak offset in the next
accounting period. It takes longer than 2 periods to
correct. (Failure to capitalize equipment yg punya masa
manfaat 5 thn)
2. Compare the direct method and the indirect method by
explaining each method [23]
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
Pada metode langsung, penyusunannya dilakukan
berdasarkan pada buku kas/bank. Untuk menggunakan
metode ini, Anda harus melaporkan kelompok-kelompok
penerimaan dan pengeluaran kas dari kegiatan operasional
perusahaan. Kemudian dilanjutkan dengan kegiatan investasi
dan pembiayaan.

Sedangkan pada metode tidak langsung, penyusunannya

dilakukan berdasarkan laporan laba-rugi dan neraca. Dengan
metode ini, laba/rugi besih harus disesuaikan dengan cara
mengoreksi pengaruh dari transaksi bukan kas, penangguhan
atau akrual dari penerimaan atau pembayaran kas untuk
kegiatan operasional di masa lalu dan masa depan, serta
unsur penghasilan atau beban yang berkaitan dengan arus
kas investasi atau penerimaan.

(Notes: lebih enak pake kalimat sendiri aja)

3. Explain the difference between the discrete approach and the

integral approach [24]

the discrete approach (i.e., each interim interval is a stand-

alone reporting period),
and the integral approach (i.e., an interim period is an integral
part of the annual period)

Pandangan Pertama - Periode interim dianggap sebagai

bagian integral dari periode akuntansi tahunan. Pandangan ini
mengarahkan bahwa biaya operasi tahunan harus
diperkirakan dan kemudian dialokasikan ke periode interim
berdasarkan tingkat aktivitas tahunan yang diperkirakan,
seperti volume penjualan yang diharapkan. Ketika pendekatan
ini digunakan, hasil periode interim berikutnya harus
 MOCK EXAM FINANCIAL ACCOUNTING II MULTIPAPER 1 JY - SC
disesuaikan untuk mencerminkan kesalahan estimasi
sebelumnya.

Pandangan Kedua - Setiap periode interim dianggap sebagai

periode akuntansi diskrit, dengan status sama dengan tahun
fiskal. Dengan demikian, tidak ada estimasi atau alokasi yang
berbeda dari yang digunakan untuk pelaporan tahunan yang
harus dibuat untuk tujuan pelaporan interim. Aturan pengakuan
pengeluaran yang sama harus berlaku seperti di bawah
pelaporan tahunan, dan tidak ada akrual atau penangguhan
interim khusus yang diizinkan. Beban operasi tahunan diakui
pada periode interim di mana mereka terjadi, terlepas dari
jumlah periode interim yang menguntungkan, kecuali
penangguhan atau akrual akan diminta dalam laporan
keuangan tahunan.

4. For what types of companies would segmented financial

reports have the most significance? Why? [24]

Segment reporting is required for publicly-held entities, and

is not required for privately held ones. Segment reporting is
intended to give information to investors and creditors
regarding the financial results and position of the most
important operating units of a company, which they can use
as the basis for decisions related to the company.