Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

my reviewer > IA 2 (QE Reviewer) > Flashcards

IA 2 (QE Reviewer) Flashcards

1
Q

the following are reflected on the trial balance of Landero Corporation as of December 31, 2023:

Accounts payable P300,000

Accrued interest on loans 100,000

Bonds payable - in 2026 1,000,000

Estimated bonus payable 200,000

cash dividends payable 100,000

Stock dividends payable 200,000

how much of the above shall not be shown as part of liabilities of Landero?

A

200k

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Bonus is an example of

A actual liability
B estimated liability

A

A and B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Nominal interest is 6% while effective is 12 %, the bonds will be issued at

a. premium
b. discount
c. face amount
d. cannot be determined

A

B. Discount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

A contingent liability shall be accrued in the books when the conditions are met

A probable

B possible

C measurable

a. B and C
b. A and B
c. A and C
d. A only

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

when bonds are issued at a discount, the amortization of the bond discount shall increase the interest expense

Select one:
True
False

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

the issue price of the bonds shall be computed by getting the present values of the principal and interest payments.
Select one:
True
False

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

A bond is issued at a premium, the amortization of the bond premium will ___________ interest expense.

a. increase
b. No effect
c. decrease
d. cannot be determined

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Bonds that will mature at the same time are called

a. registered bonds
b. term bonds
c. serial bonds
d. none of the above

A

B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

the rate of interest indicated on the bond certificate is called

a. none of the above
b. yield
c. nominal interest
d. effective interest

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

stock dividends payable is a current liability.

Select one:
True
False

A

false

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Bonds that will mature in series are called

a. term bonds
b. registered bonds
c. none of the above
d. serial bonds

A

D

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

when the nominal interest rate is different from the effective interest rate, a premium or discount will arise.

Select one:
True
False

A

true

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

which of the following are liabilities?

A estimated liability on product warranty
B contingent liability
C Stock dividends payable

a. B only
b. C only
c. A and B
d. A B and C

A

C

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

These interest rates play a role in the determination of the issue price of the bonds

A nominal or stated interest
B Effective interest rate or yield

a. Both A and B
b. A only
c. B only
d. Neither A nor B

A

A

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Amortization of bond premium increases the interest expense for the period.

Select one:
True
False

A

false

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

A bond that is registered under the name of the investor is called the

a. registered bonds
b. term bonds
c. clean bond
d. collateral bonds

A

A

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Which of the following is/are non-current liabilities?

A premium outstanding

B Bonds payable that will mature in 5 years from balance sheet date

C income tax payable

D Deferred income tax

E Retirement benefits obligation

a. A and B
b. B D and E
c. B and C
d. B and D

A

B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

At maturity date, the carrying value of the bonds will be equal to its maturity value.

Select one:
True
False

A

false

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Bonds that will mature in series of payments are called

a. Serial bonds
b. Clean bonds
c. registered bonds
d. term bonds

A

A

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

A bond that will mature one time is called

a. Registered bonds
b. Guaranteed bonds
c. term bonds
d. serial bonds

A

C

21
Q

Amortization of bond discount will decrease the carrying value of the bonds payable.

Select one:
True
False

A

false

22
Q

when the nominal rate of interest is higher than the effective rate the bonds will be issued at a discoiunt.

Select one:
True
False

A

false

23
Q

the interest indicated on the bond instrument is called the

a. effective interest
b. amortization
c. None of the choices
d. nominal interest

A

D

24
Q

the interest expense on a bond is equal to

a. carrying value x effective interest rate
b. Carrying value x nominal interest rate
c. Principal amount x effective interest rate
d. principal amount x nominal interest rate

A

D

25
Q

To get the issue price of the bonds, the principal amount of a term bond is multiplied by

a. future value factor of the effective interest rate
b. present value factor of the effective interest rate
c. present value factor of the nominal interest rate
d. present value factor of the nominal interest rate

A

B

26
Q

amortization of bond discount

a. Will decrease the carrying value of the bonds
b. will not affect the carrying value of the bonds
c. brings the carrying value equal to zero at maturity date
d. None of the above

A

C

27
Q

the amortization of bond premium

A increases the carrying value of the bond
B decreases interest expenses
C increases interest expense
D do not affect interest expense

a. A B C and D
b. b only
c. A B and C
d. a only

A

B

28
Q

At maturity date of the bonds, the cash settlement of the bonds is equal to its issue price

Select one:
True
False

A

false

29
Q

which of the following is /are temporary differences?

A Doubtful accounts expense
B Fines and surcharges

a. Neither A nor B
b. Both A and B
c. A only
d. B only

A

C

30
Q

One of the reasons for the difference is the so called temporary differences.

Select one:
True
False

A

true

31
Q

Income shown on the income statement may not be the same as the taxable income for the year.

Select one:
True
False

A

true

32
Q

which of the following is considered temporary difference?

A NOLCO

B Provision for doubtful accounts

a. Neither A nor B
b. B only
c. both A and B
d. A only

A

C

33
Q

Deferred tax asset arising from doubtful accounts expense shall be classified as current asset.

Select one:
True
False

A

false

34
Q

If the temporary difference will lower the tax liability of the corporation then there is a deferred tax liability.

Select one:
True
False

A

false

35
Q

All interest income should no longer be part of the tax computation of an entity

Select one:
True
False

A

false

36
Q

Net operating loss can be carried over as deduction for the next ___ years.

a. 4
b. 3
c. 5
d. 2

A

B

37
Q

which of the following is an example/s of permanent differences?

A Net operating loss carry over

B Revaluation increment on Fixed asset

a. A
b. Neither A nor B
c. Both A and B
d. B

A

B

38
Q

Deferred tax assets and liabilities are shown as current assets on the company’s FS

Select one:
True
False

A

false

39
Q

The difference between the rent expense and actual cash disbursed shall be charged to

a. Cannot be determined
b. Either Prepaid or accrued rental
c. Accrued rental
d. Prepaid rental

A

B

40
Q

When the lease contract contains an escalation clause the lease expense shall be computed by

a. None of the above
b. using actual cash paid to the lessor
c. Not determinable
d. Average rental over the whole lease term

A

D

41
Q

Which of the following will result in deferred tax asset?

A provision for doubtful accounts

B Revaluation increase on property and equipment

a. A 0nly
b. Neither A nor B
c. B only
d. Both a and B

A

A

42
Q

According to PFRS 16, the lessee should treat a lease as finance lease when the following are met

A There is transfer of title from the lessor tot he lessee at the end of the lease term

b There is a bargain purchase option

a. B only
b. both a and b
c. Neither A nor B
d. A only

A

B

43
Q

when the lease do not contain a bargain purchase option, there is a chance the lessee will not avail of the transfer of property.

Select one:
True
False

A

true

44
Q

The owner of a property subject to the lease agreement is the

a. None of the above
b. Lessee
c. leased asset
d. Lessor

A

D

45
Q

Which of the following is a non-current liability?

A Income tax payable

B Deferred tax liability

a. B only
b. Neither A nor B
c. A only
d. Both A and B

A

A

46
Q

The party who leases a property from the lessor for a price is called

a. Lessee
b. Lease term
c. Leased asset
d. Lessor

A

A

47
Q

According to PAS 17 on leases, the lease can choose to treat the lease under
A operating lease
B Capital lease

a. Neither a nor B
b. B only
c. Both A and B
d. A only

A

C

48
Q

Net operating loss carry over can be deducted from the gross income for a period of

a. 5 years
b. 1 year
c. 2 years
d. 3 years

A

D

49
Q

true or false. The preference shares shall be issued at less than the par value of the shares.

A

false

my reviewer (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions