, TEST BANK
Intermediate
Financia Accounting
F
Part 1A
ZEUS VERNON B. MILLAN
1
,TABLE OF CONTENTS
CHAPTER 1
OVERVIEW OF ACCOUNTING ......................................................... 3
CHAPTER 1: THEORY OF ACCOUNTS REVIEWER............................................... 3
CHAPTER 1 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 22
CHAPTER 2
THE ACCOUNTING PROCESS ........................................................ 24
CHAPTER 2: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 24
CHAPTER 2: THEORY OF ACCOUNTS REVIEWER............................................ 26
CHAPTER 2 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 36
CHAPTER 3
THE CONCEPTUA FRAMEWORK FOR FINANCIA REPORTING 36
F F
CHAPTER 3: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 36
CHAPTER 3: THEORY OF ACCOUNTS REVIEWER............................................ 37
CHAPTER 3 - SUGGESTED ANSWERS TO REVIEW THEORY QUESTIONS ...... 54
CHAPTER 4
CASH & CASH EQUIVALENTS ..................................................... 54
CHAPTER 4: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 54
CHAPTER 4: THEORY OF ACCOUNTS REVIEWER............................................ 57
CHAPTER 4 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 65
CHAPTER 5
RECEIVABLES (PART 1) ............................................................... 66
CHAPTER 5: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 66
CHAPTER 5: THEORY OF ACCOUNTS REVIEWER............................................ 69
CHAPTER 5 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 75
CHAPTER 6
RECEIVABLES (PART 2) ............................................................... 75
CHAPTER 6: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 75
CHAPTER 6: THEORY OF ACCOUNTS REVIEWER............................................ 78
CHAPTER 6 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 82
CHAPTER 7
RECEIVABLES (PART 3) ............................................................... 82
CHAPTER 7: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 82
CHAPTER 7: THEORY OF ACCOUNTS REVIEWER............................................ 85
CHAPTER 7 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 92
CHAPTER 8
INVENTORIES ............................................................................... 92
CHAPTER 8: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 92
CHAPTER 8: THEORY OF ACCOUNTS REVIEWER............................................ 97
CHAPTER 8 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 109
CHAPTER 9
INVESTMENTS (PART 1) ............................................................ 109
CHAPTER 9: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 109
CHAPTER 9: THEORY OF ACCOUNTS REVIEWER..........................................112
CHAPTER 9 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 122
CHAPTER 10
INVESTMENTS (PART 2) ............................................................ 122
CHAPTER 10: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 122
CHAPTER 10: THEORY OF ACCOUNTS REVIEWER.......................................127
2
, CHAPTER 10 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 134
CHAPTER 11
INVESTMENTS (PART 3) ............................................................ 135
CHAPTER 11: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) F 135
CHAPTER 11: THEORY OF ACCOUNTS REVIEWER.......................................135
CHAPTER 11 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 137
Chapter 1
Overview of Accounting
Chapter 1: Theory of Accounts Reviewer
Definition of Accounting
1. Accounting has been given various definitions, which of the following is not one of those definitions
F F F F F F F F F F F F F F F
a. Accounting is a service activity. Its function is to provide quantitative information, primarily financial in
F F F F F F F F F F F F F F F
nature, about economic entities that is intended to be useful in making economic decisions.
F F F F F F F F F F F F F
b. Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of
F F F F F F F F F F F F F F F F F
money, transactions and events which are, in part of at least, of a financial character and interpreting the
F F F F F F F F F F F F F F F F F F
results thereof. F
c. Accounting is a systematic process of objectively obtaining and evaluating evidence regarding assertions
F F F F F F F F F F F F F
about economic actions and events to ascertain the degree of correspondence between these assertions
F F F F F F F F F F F F F F
and established criteria and communicating the results to interested users.
F F F F F F F F F
d. Accounting is the process of identifying, measuring, and communicating economic information to permit
F F F F F F F F F F F F F
informed judgment and decisions by users of information. F F F F F F F
2. It is the first process used in accounting. It refers to the identification of events as to whether
F F F F F F F F F F F F F F F F F F
they are recognized or not in the financial statements.
F F F F F F F F
a. Identifying
F b. Measuring c. Communicating d. Auditing F F F F
3. The following statements correctly refer to the accounting process.
F F F F F F F F
I. Measuring is the accounting process of analyzing business activities as to whether or not they will be
F F F F F F F F F F F F F F F F F
recognized in the books. F F F
II. Recognition refers to the process of including the effects of an event in the totals of the statement of
F F F F F F F F F F F F F F F F F F F
financial position or the statement of profit or loss and other comprehensive income through memo
F F F F F F F F F F F F F F F
entries.
III. Disclosure of events in the notes to financial statement without including in the totals of the statement of
F F F F F F F F F F F F F F F F F F
financial position or statement of profit or loss and other comprehensive income is not an application of the
F F F F F F F F F F F F F F F F F F
recognition principle. F
IV. An accountable event is an event that has an effect on the assets, liabilities or equity of an entity and its
F F F F F F F F F F F F F F F F F F F F F
effect can be measured reliably. F F F F
V. Sociological and psychological matters are within the scope of accounting. F F F F F F F F F
a. I, II, III, IV, V
F F F b. I, II, III, IV
F Fc. IV d. III, IV F F F F F F F
Types of Events F F
4. These events involve changes in the economic resources or obligations of entities involving other entities but
F F F F F F F F F F F F F F F F
do not involve transfers of resources or obligations
F F F F F F F
a. External events c. External events other than transfers
F F F F F F
b. Non-reciprocal transfers d. Internal events F F F
3
Intermediate
Financia Accounting
F
Part 1A
ZEUS VERNON B. MILLAN
1
,TABLE OF CONTENTS
CHAPTER 1
OVERVIEW OF ACCOUNTING ......................................................... 3
CHAPTER 1: THEORY OF ACCOUNTS REVIEWER............................................... 3
CHAPTER 1 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 22
CHAPTER 2
THE ACCOUNTING PROCESS ........................................................ 24
CHAPTER 2: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 24
CHAPTER 2: THEORY OF ACCOUNTS REVIEWER............................................ 26
CHAPTER 2 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 36
CHAPTER 3
THE CONCEPTUA FRAMEWORK FOR FINANCIA REPORTING 36
F F
CHAPTER 3: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 36
CHAPTER 3: THEORY OF ACCOUNTS REVIEWER............................................ 37
CHAPTER 3 - SUGGESTED ANSWERS TO REVIEW THEORY QUESTIONS ...... 54
CHAPTER 4
CASH & CASH EQUIVALENTS ..................................................... 54
CHAPTER 4: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 54
CHAPTER 4: THEORY OF ACCOUNTS REVIEWER............................................ 57
CHAPTER 4 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 65
CHAPTER 5
RECEIVABLES (PART 1) ............................................................... 66
CHAPTER 5: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 66
CHAPTER 5: THEORY OF ACCOUNTS REVIEWER............................................ 69
CHAPTER 5 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 75
CHAPTER 6
RECEIVABLES (PART 2) ............................................................... 75
CHAPTER 6: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 75
CHAPTER 6: THEORY OF ACCOUNTS REVIEWER............................................ 78
CHAPTER 6 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 82
CHAPTER 7
RECEIVABLES (PART 3) ............................................................... 82
CHAPTER 7: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 82
CHAPTER 7: THEORY OF ACCOUNTS REVIEWER............................................ 85
CHAPTER 7 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 92
CHAPTER 8
INVENTORIES ............................................................................... 92
CHAPTER 8: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 92
CHAPTER 8: THEORY OF ACCOUNTS REVIEWER............................................ 97
CHAPTER 8 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 109
CHAPTER 9
INVESTMENTS (PART 1) ............................................................ 109
CHAPTER 9: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 109
CHAPTER 9: THEORY OF ACCOUNTS REVIEWER..........................................112
CHAPTER 9 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 122
CHAPTER 10
INVESTMENTS (PART 2) ............................................................ 122
CHAPTER 10: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES)
F 122
CHAPTER 10: THEORY OF ACCOUNTS REVIEWER.......................................127
2
, CHAPTER 10 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 134
CHAPTER 11
INVESTMENTS (PART 3) ............................................................ 135
CHAPTER 11: MULTIPLE CHOICE – COMPUTATIONA (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) F 135
CHAPTER 11: THEORY OF ACCOUNTS REVIEWER.......................................135
CHAPTER 11 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS 137
Chapter 1
Overview of Accounting
Chapter 1: Theory of Accounts Reviewer
Definition of Accounting
1. Accounting has been given various definitions, which of the following is not one of those definitions
F F F F F F F F F F F F F F F
a. Accounting is a service activity. Its function is to provide quantitative information, primarily financial in
F F F F F F F F F F F F F F F
nature, about economic entities that is intended to be useful in making economic decisions.
F F F F F F F F F F F F F
b. Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of
F F F F F F F F F F F F F F F F F
money, transactions and events which are, in part of at least, of a financial character and interpreting the
F F F F F F F F F F F F F F F F F F
results thereof. F
c. Accounting is a systematic process of objectively obtaining and evaluating evidence regarding assertions
F F F F F F F F F F F F F
about economic actions and events to ascertain the degree of correspondence between these assertions
F F F F F F F F F F F F F F
and established criteria and communicating the results to interested users.
F F F F F F F F F
d. Accounting is the process of identifying, measuring, and communicating economic information to permit
F F F F F F F F F F F F F
informed judgment and decisions by users of information. F F F F F F F
2. It is the first process used in accounting. It refers to the identification of events as to whether
F F F F F F F F F F F F F F F F F F
they are recognized or not in the financial statements.
F F F F F F F F
a. Identifying
F b. Measuring c. Communicating d. Auditing F F F F
3. The following statements correctly refer to the accounting process.
F F F F F F F F
I. Measuring is the accounting process of analyzing business activities as to whether or not they will be
F F F F F F F F F F F F F F F F F
recognized in the books. F F F
II. Recognition refers to the process of including the effects of an event in the totals of the statement of
F F F F F F F F F F F F F F F F F F F
financial position or the statement of profit or loss and other comprehensive income through memo
F F F F F F F F F F F F F F F
entries.
III. Disclosure of events in the notes to financial statement without including in the totals of the statement of
F F F F F F F F F F F F F F F F F F
financial position or statement of profit or loss and other comprehensive income is not an application of the
F F F F F F F F F F F F F F F F F F
recognition principle. F
IV. An accountable event is an event that has an effect on the assets, liabilities or equity of an entity and its
F F F F F F F F F F F F F F F F F F F F F
effect can be measured reliably. F F F F
V. Sociological and psychological matters are within the scope of accounting. F F F F F F F F F
a. I, II, III, IV, V
F F F b. I, II, III, IV
F Fc. IV d. III, IV F F F F F F F
Types of Events F F
4. These events involve changes in the economic resources or obligations of entities involving other entities but
F F F F F F F F F F F F F F F F
do not involve transfers of resources or obligations
F F F F F F F
a. External events c. External events other than transfers
F F F F F F
b. Non-reciprocal transfers d. Internal events F F F
3
