Practice Quiz (Ramos)

True

Goods out on consignment should be included in the inventory of the consignor

True or false

False

All financial assets are initially measured at fair value plus transaction costs

True or false

True

Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods

True or false

True

PAS 2 does not apply to financial instruments.

True or false

True

The cost of inventories includes all costs of purchase, conversion, and other costs incurred in bringing the inventories to the present location and condition

True or false

False

An equity instrument held for trading purposes would typically be classified as Fair Value Through Other Comprehensive Income (FVOCI)

True or false

True

Inventories are reported in the current assets section of the statement of Financial Position immediately below receivables

True or false

False

Trade discounts and rebates are added to determine cost of purchase.

True or false

True

Cost of jewelries should be assigned by using specific identification of their individual costs

True or false

C

Under a consignment arrangement, the

A. consignor has ownership until goods are shipped to the consignee

B. consigned goods are included in the inventory of the consignee

C. consignor has ownership until goods are sold to a customer

D. consignee has ownership when the goods are in the consignee’s possession

C

Which of the following inventory method reports most closely the current cost of inventory?

A. Weighted average

B. Specific identification

C. FIFO

D. Moving Average

B

Changes in fair value are reported as part of net income from operations for

A. debt securities

B. FA-FV Profit or Loss

C. FA - Amortized Cost

False

When inventories are sold, the carrying amount should be recorded as income

True or false

True

Finished goods are a classification of inventory for a manufacturer that are completed and ready for sale

True or false

True

Dividends received from an equity investment classified as Fair Value Through Other Comprehensive Income (FVOCI) are recognized in profit or loss

A. True or false

True

The first-in, first-out (FIFO) inventory method results in an ending inventory valued at the most recent cost

True or false

True

Debt instruments are generally classified as Amortized Cost if they are held within a business model whose objective is to collect contractual cash flows and the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest

True or false

True

A debt security has a maturity date and a maturity value

True or false

B

A new average cost is computed each time a purchase is made in the

A. weighted-average cost method

B. moving-average cost method

C. average-cost method

D. all of these methods

B

Reporting inventory at the lower of cost and net realizable value is a departure from

a. Full disclosure

B. Historical cost

C

When an investor owns between 20% and 50% of the Ordinary shares of a corporation, it is generally presumed that the investor

A. has insignificant influence on the investee and that the cost method should be used to account for the investment

B. will prepare consolidated financial statements

C. has significant influence on the investee and that the equity method should be used to account for the investment

D. should apply the cost method in accounting for the investment

A

An unrealized loss on FA - FV Other Comprehensive Income is

A. reported as a separate component of stockholders' equity

B. reported under Other Expenses and Losses in the income statement

C. closed-out at the end of the accounting period

D. deducted from the cost of the investment

B

A property developer must classify properties that it holds for sale in the ordinary course of business as

A. Financial asset

B. Inventory

C. Property, plant and equipment

D. Investment property

A

The term "FOB" denotes

A. free on board

B. freight charge on buyer

C. free only (to) buyer

A

FA- FV Profit or Loss should be valued on the statement of Financial Position at

A. fair value

B. cost

C. the lower of cost or fair value

D. the higher of cost or fair value

D

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

A. Farm equipment dealership

B. Music store specializing in piano sales

C. Antique shop

D. Hardware store

B

Beginning inventory plus the cost of goods purchased equals

A. total goods purchased

B. cost of goods available for sale

C. cost of goods sold.

D. net purchases

C

Inventories encompass all of the following, except

A. Materials and supplies awaiting use in the production process

B. Finished goods produced

C. Land and other property not held for sale

D. merchandise purchased by a merchandising business

D

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

A. Farm equipment dealership

B. Music store specializing in piano sales

C. Antique shop

D. Hardware store

A

Net realizable value is

A. Estimated selling price less estimated cost to complete and estimated cost disposal

B.

D

How should trade discounts be dealt with when valuing inventories at the lower of cost and net realizable value (NRV) according to PAS 2?

A. Added to cost

B. Ignored

C. Deducted in arriving at NRV

D. Deducted from cost

C

When an investor owns between 20% and 50% of the Ordinary shares of a corporation, it is generally presumed that the investor

A. has insignificant influence on the investee and that the cost method should be used to account for the investment

B. will prepare consolidated financial statements

C. has significant influence on the investee and that the equity method should be used to account for the investment

D. should apply the cost method in accounting for the investment