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Question 1

A transaction was reported as a nonmonetary exchange of assets. Under which of the following circumstances should the exchange be measured based on the reported amount of the nonmonetary asset surrendered?

Answer 1

When the exchange lacks commercial substance because it is not expected to change the entity’s cash flows significantly, the accounting for a nonmonetary exchange is based on the carrying amount of the assets given up.

Question 2

what is the recoverable amount under IFRS

Answer 2

greater of the carrying amount or FMV minus cost to sell

Question 3

what i the JE to report selling of asset at losss

Answer 3

DR AD
DR loss
DR cash
CR Equipment

Question 4

what is JE for purchase land with cash and notes payable

Answer 4

DR Land
CR cash
CR notes payable

Question 5

JE for depriciation

Answer 5

Dr Dep ex

CR AD

Question 6

sale asset at Gain JE

Answer 6

DR cash
Dr AD
Cr asset
Cr Gain

Question 7

to remove the AD

Answer 7

Dr AD

CR Asset

Question 8

asset write off JE

Answer 8

DR AD
Dr loss on disposal
Cr Asset

Question 9

An expenditure subsequent to acquisition of assembly-line manufacturing equipment benefits future periods. The expenditure should be capitalized if it is a

Betterment
Rearrangement

Answer 9

A betterment occurs when a replacement asset is substituted for an existing asset, and the result is increased productivity, capacity, or expected useful life. A rearrangement is the movement of existing assets to provide greater efficiency or to reduce production costs. If the betterment or rearrangement expenditure benefits future periods, it should be capitalized.

Question 10

Under IFRS, the value in use of an asset equals the

Answer 10

The recoverable amount of an asset is the greater of (1) its fair value minus cost to sell or (2) value in use. Value in use is the present value of the future cash flows of an asset or a cash-generating unit.