SOLUTIONS FOR INTERMEDIATE ACCOUNTING IFRS, 5TH
EDITION BY DONALD E. KIESO|ACCURATELY ANSWERED
1.Which of the following statements is true regarding accounting information systems? -
ANSWER The kind of information that management requires of an accounting system will vary
depending on the type of firm.
2.An external event involving a transfer or exchange between two or more entities or parties is
called a(n) - ANSWER transaction
3.Factors that shape an accounting system include the - ANSWER All of the above (nature, size,
volume)
4.An example of a temporary account is - ANSWER Salary expense
5.Which of the following is correct - ANSWER Equity = assets - liabilities
6.The accounting equation must remain in balance - ANSWER throughout each step in the
accounting cycle
7.Which of the following criteria does NOT have to be met before an event or transaction should
be recorded for accounting purposes? - ANSWER The event or transaction must be an external
event
8.Which of the following is an internal event? - ANSWER Using raw materials in production
9.The book of original entry transactions and other selected events are first recorded is called
the - ANSWER Journal
,10.The debit and credit analysis of a transaction normally takes place - ANSWER When the trial
balance is prepared
11.Performing a service for a client on account will - ANSWER Increase an asset and increase
equity
12.The account credited for a receipt of cash on account is - ANSWER Accounts receivable
13.Some events are not recorded in the accounting information system because - ANSWER their
measurement is too complex
14.The double-entry accounting system means - ANSWER the dual effect of each transaction is
recorded with debits and credits of equal amount
15.Which of the following criteria must be met before an event or item should be recorded for
financial purposes? - ANSWER The event or item is an element
16.A trial balance - ANSWER Is a list of all the accounts and their balances at a specific date
17.A trial balance will not balance if - ANSWER Only the debit side of a journal entry has been
posted
18.The main purpose of a trial balance is - ANSWER To prove the mathematical equity of debits
and credits after posting
19.Adjusting entries are necessary to - ANSWER -obtain a proper matching of revenue and
expense
-achieve an accurate statement of assets and equities
,20.If, during an accounting period, an expense item has been incurred and consumed but not
yet paid for or recorded, then the end-of-period adjusting entry would involve - ANSWER A
liability account and an expense account
21.For adjusting entries relating to accrued revenues, - ANSWER Before adjustment, both assets
and revenues are understated
22.Which of the following would not be a correct form of an adjusting entry? - ANSWER A debit
to an asset and a credit to a liability
23.Which of the following must be considered in estimating depreciation on an asset for an
accounting period> - ANSWER Both the original cost of the asset and its useful life
24.The type of account and normal balance of "Accumulated Depreciation, Equipment" is -
ANSWER Contra-asset, Credit
25.If the accountant forgets to record an adjustment for Accumulated Depreciation, Building at
the end of the accounting period, this will cause - ANSWER An overstatement of assets
26.An adjusting entry for bad debts will generally - ANSWER Increase an expense account and
increase a contra-asset account
27.An accrued revenue can be best described as an amount - ANSWER collected and not
currently matched with expenses
28.What account are revenues and expenses transferred to at the end of the accounting cycle? -
ANSWER Retained earnings
29.Zack Jones operates a sole proprietorship, selling sporting equipment. He has recently
prepared financial statements for the fiscal year end of the business. Which equity accounts
, would you expect to see on the balance sheet? - ANSWER Capital and Withdrawals, grouped or
added under Owner's Equity
30.Marvin holds 10% of the common shares of Pink Limited. For the 2017 fiscal year end, all
shareholders received a cash payment to represent their share in the net income of Pink 31. 31.
Limited. How would this cash payment be reported in the equity section of Pink Limited's
financial statements? - ANSWER as a dividend, reducing Shareholder's Equity of Pink Limited
32.An unearned revenue can best be described as an amount - ANSWER collected and not
currently matched with expenses
33.Which type of account is always debited during the closing process? - ANSWER Revenue
34.Which of the following statements is INCORRECT regarding fair value adjustments for
investments? - ANSWER Both FV-NI investments and FV-OCI investments could include equity
investments or investments in debt securities.
In the closing process, all the revenue and expense accounts are transferred to a clearing or
suspense account called - ANSWER Income Summary
A corporation's net income or loss is closed at year end to - ANSWER Retained earnings
A post-closing trial balance - ANSWER includes permanent accounts only
Which of the following statements about the trial balance is correct? - ANSWER The debits and
credits must balance
If an inventory account at the end of the year is understated, the effect will be to - ANSWER
overstate the cost of goods sold
EDITION BY DONALD E. KIESO|ACCURATELY ANSWERED
1.Which of the following statements is true regarding accounting information systems? -
ANSWER The kind of information that management requires of an accounting system will vary
depending on the type of firm.
2.An external event involving a transfer or exchange between two or more entities or parties is
called a(n) - ANSWER transaction
3.Factors that shape an accounting system include the - ANSWER All of the above (nature, size,
volume)
4.An example of a temporary account is - ANSWER Salary expense
5.Which of the following is correct - ANSWER Equity = assets - liabilities
6.The accounting equation must remain in balance - ANSWER throughout each step in the
accounting cycle
7.Which of the following criteria does NOT have to be met before an event or transaction should
be recorded for accounting purposes? - ANSWER The event or transaction must be an external
event
8.Which of the following is an internal event? - ANSWER Using raw materials in production
9.The book of original entry transactions and other selected events are first recorded is called
the - ANSWER Journal
,10.The debit and credit analysis of a transaction normally takes place - ANSWER When the trial
balance is prepared
11.Performing a service for a client on account will - ANSWER Increase an asset and increase
equity
12.The account credited for a receipt of cash on account is - ANSWER Accounts receivable
13.Some events are not recorded in the accounting information system because - ANSWER their
measurement is too complex
14.The double-entry accounting system means - ANSWER the dual effect of each transaction is
recorded with debits and credits of equal amount
15.Which of the following criteria must be met before an event or item should be recorded for
financial purposes? - ANSWER The event or item is an element
16.A trial balance - ANSWER Is a list of all the accounts and their balances at a specific date
17.A trial balance will not balance if - ANSWER Only the debit side of a journal entry has been
posted
18.The main purpose of a trial balance is - ANSWER To prove the mathematical equity of debits
and credits after posting
19.Adjusting entries are necessary to - ANSWER -obtain a proper matching of revenue and
expense
-achieve an accurate statement of assets and equities
,20.If, during an accounting period, an expense item has been incurred and consumed but not
yet paid for or recorded, then the end-of-period adjusting entry would involve - ANSWER A
liability account and an expense account
21.For adjusting entries relating to accrued revenues, - ANSWER Before adjustment, both assets
and revenues are understated
22.Which of the following would not be a correct form of an adjusting entry? - ANSWER A debit
to an asset and a credit to a liability
23.Which of the following must be considered in estimating depreciation on an asset for an
accounting period> - ANSWER Both the original cost of the asset and its useful life
24.The type of account and normal balance of "Accumulated Depreciation, Equipment" is -
ANSWER Contra-asset, Credit
25.If the accountant forgets to record an adjustment for Accumulated Depreciation, Building at
the end of the accounting period, this will cause - ANSWER An overstatement of assets
26.An adjusting entry for bad debts will generally - ANSWER Increase an expense account and
increase a contra-asset account
27.An accrued revenue can be best described as an amount - ANSWER collected and not
currently matched with expenses
28.What account are revenues and expenses transferred to at the end of the accounting cycle? -
ANSWER Retained earnings
29.Zack Jones operates a sole proprietorship, selling sporting equipment. He has recently
prepared financial statements for the fiscal year end of the business. Which equity accounts
, would you expect to see on the balance sheet? - ANSWER Capital and Withdrawals, grouped or
added under Owner's Equity
30.Marvin holds 10% of the common shares of Pink Limited. For the 2017 fiscal year end, all
shareholders received a cash payment to represent their share in the net income of Pink 31. 31.
Limited. How would this cash payment be reported in the equity section of Pink Limited's
financial statements? - ANSWER as a dividend, reducing Shareholder's Equity of Pink Limited
32.An unearned revenue can best be described as an amount - ANSWER collected and not
currently matched with expenses
33.Which type of account is always debited during the closing process? - ANSWER Revenue
34.Which of the following statements is INCORRECT regarding fair value adjustments for
investments? - ANSWER Both FV-NI investments and FV-OCI investments could include equity
investments or investments in debt securities.
In the closing process, all the revenue and expense accounts are transferred to a clearing or
suspense account called - ANSWER Income Summary
A corporation's net income or loss is closed at year end to - ANSWER Retained earnings
A post-closing trial balance - ANSWER includes permanent accounts only
Which of the following statements about the trial balance is correct? - ANSWER The debits and
credits must balance
If an inventory account at the end of the year is understated, the effect will be to - ANSWER
overstate the cost of goods sold
