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Intermediate Accounting 11th Canadian Edition Volume 2 by Donald E. Kieso -Test Bank
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, COMPREHENSIVE EXAMINATION APART 1
(CHAPTERS 1–6)
Approximate
Problem CPA Topics Blooms Time
A-1 cpa-t001 Multiple Choice (Various Topics) 1, 3, 6, 8, 10—blooms001 15 min.
2, 4, 5, 7, 9—blooms002
A-2 cpa-t001 Adjusting and Reversing* Entries blooms003 30 min.
A-3 cpa-t001 Key Concepts and Definitions blooms002 10 min.
A-4 cpa-t001 Discontinued Operations blooms003 10 min.
A-5 cpa-t001 Financial Statement Classifications blooms002 10 min.
A-6 cpa-t001 Income and Retained Earnings blooms003 35 min.
Statement
A-7 cpa-t001 Percentage-of-Completion Method blooms003 10 min.
120 min.
Copyright © 2016 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited.
,A-2 Intermediate Accounting, Eleventh Canadian Edition
Problem A-1 Multiple Choice (Various Topics)
Choose the best answer for each of the following questions and enter the identifying letter in the
space provided.
___1. Which of the following entities is least likely to be a major player in developing financial
reporting standards in Canada?
a. International Accounting Standards Board
b. (Canadian) Accounting Standards Board
c. The Federal government
d. Financial Accounting Standards Board
___2. Financial statements are prepared for the user. Which of the following best describes
the responsibility for the preparation of financial statements?
a. They are the responsibility of management.
b. They are the responsibility of external auditors.
c. They are the responsibility of shareholders.
d. They are the responsibility of standard setters.
___3. Which of the following is not an objective of financial reporting?
a. to provide information about an entity’s economic resources, obligations and
equity/net assets
b. to provide information that is helpful to investors and creditors and other users in
making resource allocation decisions and/or assessing management stewardship
c. to provide information that is useful in assessing the economic performance of the
entity
d. to promote information asymmetry
___4. A local businessman owns several different companies. His accountant prepares
separate annual financial statements for each of these businesses. This is an
application of which of the following principle or assumption?
a. full disclosure
b. periodicity
c. economic entity
d. matching
___5. When knowledgeable, independent users achieve similar results or reach consensus
regarding the accounting for a particular transaction, which enhancing qualitative
characteristic is said to exist?
a. comparability
b. verifiability
c. relevance
d. understandability
___6. A trial balance
a. is a list of general ledger account names.
b. proves that all transactions have been recorded.
c. can be used for the preparation of financial statements.
d. can never be used for the preparation of financial statements.
___7. Which of the following is correct regarding income statement presentation?
a. Income from continuing operations is the last line shown on the income statement.
Copyright © 2014 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited.
, Comprehensive Examination-A A-3
b. IFRS does not allow the use of a single step income statement.
c. Unusual gains or losses must be presented in a separate section after income from
continuing operations.
d. IFRS requires that both basic and diluted earnings per share be presented,
whereas ASPE does not.
___8. IFRS requires that expenses are presented in the income statement
a. by nature or by function.
b. by amount or in alphabetical order.
c. by geographical area or by the single-step method.
d. by current or non-current.
___9. Which of the following should not be considered as a current asset on the statement of
financial position?
a. instalment notes receivable due over eighteen months in accordance with normal
trade practice
b. prepaid taxes which cover assessments of the following operating cycle of the
business
c. equity or debt securities held to finance future construction of additional facilities
d. spare parts and supplies inventories
___10. The discrete earnings process is one that
a. takes place over several accounting periods.
b. has a critical event.
c. where substantial completion can be deferred.
d. must be accounted for by the completed-contract method.
*Problem A-2 Adjusting and Reversing Entries
At December 31, 2017, Hazelnut Corp.’s unadjusted trial balance was as follows:
Cash.............................................................................................. $ 39,590
Accounts Receivable..................................................................... 69,000
Allowance for Doubtful Accounts................................................... $ 500
Merchandise Inventory.................................................................. 54,720
Prepaid Rent.................................................................................. 24,000
Investment in Pecan Corp. Bonds.................................................. 70,000
Plant and Equipment..................................................................... 156,000
Accumulated Depreciation............................................................. 14,740
Accounts Payable.......................................................................... 11,370
Bonds Payable............................................................................... 90,000
Common Shares............................................................................ 170,000
Retained Earnings......................................................................... 97,180
Sales Revenue.............................................................................. 222,000
Cost of Goods Sold........................................................................ 154,400
Transportation-Out......................................................................... 11,000
Salaries and Wages Expense........................................................ 32,000
Interest Expense............................................................................ 2,040
Rent Revenue................................................................................ 14,400
Miscellaneous Expense................................................................. 890
Insurance Expense........................................................................ 6,550
$620,190 $620,190
Copyright © 2014 John Wiley & Sons Canada, Ltd. Unauthorized copying, distribution, or transmission of this page is prohibited.
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