PART II: THEORY OF ACCOUNTS (FAR FINALS)

16問 • 1年前

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25. A machine with a 4-year useful life and a 15% salvage value was acquired on January 1, 20x2. The increase in accumulated depreciation for 20x3 using the double-declining balance method would be

D. initial cost x 50% x 50%

26. Which of the following are included in the property, plant and equipment category in the statement of financial position? I. Building under construction. II. Land acquired and put on the market for resale. III. Equipment that is idle temporarily. IV. Delivery truck acquired on installment, certificate of ownership being held by the finance company.

B. I,III, and IV

27. When an appraised property is retired, the revaluation surplus pertaining to such asset may be handled

A. revaluation surplus which can be subsequently transferred to unappropriated retained earnings

28. In an exchange with commercial substance

A. Gain or loss is recognized entirely.

29. The sale of a depreciable asset resulting in a gain, indicates that the proceeds from the sale were

B. greater than carrying amount

30. Under the composite method, the composite

D. life is the total depreciable cost divided by the total annual depreciation.

31. The carrying amount of a property is increased as a result of revaluation. Assuming no revaluation was made before, the increase should be credited to

C. Revaluation surplus, shown as a component of equity

32. A method that ignores salvage value in calculating periodic depreciation expense is the

C. group composite method

33. Depreciation is best described as a method of

A. Cost allocation

34. Which of the following is/are not subject to depreciation? I. Land held to be used as a future plant site II. Machinery classified as held for sale III. Building classified as investment property under fair value model

D. I,IIandIII

35. The diminishing balance method of depreciation results in

B. decreasing charge over the useful life of the asset.

36. The carrying amount of an existing old building demolished to make room for the construction of a new building should be

A. Accounted for as loss

37. Statement 1: If a nonmonetary exchange lacks commercial substance, and cash is received, a partial gain or loss is recognized. Statement 2: Assets classified as Property, Plant, and Equipment can be either acquired for use in operations, or acquired for resale. Statement 3: Assets classified as Property, Plant, and Equipment must be both long-term in nature and possess physical substance

B. False, false, true

38. When the revalued asset is depreciable,

B. a portion of the revaluation surplus may be periodically transferred directly to retained earnings.

39. Which of the following is/are not subject to depreciation? I. Land held to be used as a future plant site II. Machinery classified as held for sale III. Building classified as investment property under fair value model

D. I, II and III

40. Which of the following statement is incorrect regarding depreciation?

A. Depreciation commences when the asset is actually used and brought into operations.

FAR Quizzers For Post Test And Term Examination

Mark Anthony Germono · 24問 · 1年前

FAR Quizzers For Post Test And Term Examination