Intermediate 2 Final Exam Mock
MCQs with questions and well
verified answers actual exam!!!
2026
1. According to the existing IFRS and the CICA Handbook Part II guidelines, which of the
following is NOT an essential characteristic of a liability?
a. It embodies a duty or responsibility.
b. The transaction or event that obliges the entity has occurred.
c. The obligation is enforceable on the obligor entity.
d. The entity has little or no discretion to avoid the duty. - ANSWER -c. The obligation is
enforceable on the obligor entity.
2. A constructive obligation arises when
a. the entity is legally obligated to honour the obligation.
b. the entity makes an unconditional promise to pay money in the future.
,c. past or present company practice reveals the entity acknowledges a potential economic
burden.
d. the entity has a conditional obligation which becomes unconditional if an uncertain future
event occurs. - ANSWER -c. past or present company practice reveals the entity
acknowledges a potential economic burden.
3. Which of the following statements is NOT true about recognition and subsequent
accounting for financial liabilities?
a. They are initially recognized at their fair value.
b. After acquisition, they continue to be accounted for at fair value.
c. After acquisition, they are generally accounted for at amortized cost.
d. Short term liabilities, such as accounts payable, are usually recorded at their maturity value.
- ANSWER -b. After acquisition, they continue to be accounted for at fair value.
4. Among Oslo Corp.'s short-term obligations, on its most recent statement of financial
position date, are notes payable totalling $250,000 with the Provincial Bank. These are 90-day
notes, renewable for another 90-day period. These notes should be classified on Oslo's
statement of financial position as
a. current liabilities.
b. deferred charges.
c. long-term liabilities.
d. shareholders' equity. - ANSWER -a. current liabilities.
5. Regarding zero-interest-bearing notes,
, a. they do not have an interest component.
b. the debtor receives the future value of the note and pays back the present value.
c. any interest is never recognized until the note is repaid.
d. the debtor receives the present value of the note and pays back the future value. -
ANSWER -d. the debtor receives the present value of the note and pays back the future
value.
6. Under IFRS, even if the entity plans to refinance long term debt, the current portion must be
reported as a current liability UNLESS
a. long term financing has been completed after the statement of financial position date, but
before the financial statements are released.
b. management intends to refinance the debt on a long-term basis.
c. at statement of financial position date, the entity expects to refinance under an existing
agreement for at least a year, and the decision is solely at its discretion.
d. management intends to discharge the debt by issuing shares. - ANSWER -c. at
statement of financial position date, the entity expects to refinance under an existing
agreement for at least a year, and the decision is solely at its discretion.
7. On November 1, 2014, Best Corp. signed a three-month, zero-interest-bearing note for the
purchase of $80,000 of inventory. The maturity value of the note was $81,200, based on the
bank's discount rate of 6%. The adjusting entry prepared on December 31, 2014 in connection
with this note will include a
a. debit to Note Payable for $800.
b. credit to Note Payable for $800.
MCQs with questions and well
verified answers actual exam!!!
2026
1. According to the existing IFRS and the CICA Handbook Part II guidelines, which of the
following is NOT an essential characteristic of a liability?
a. It embodies a duty or responsibility.
b. The transaction or event that obliges the entity has occurred.
c. The obligation is enforceable on the obligor entity.
d. The entity has little or no discretion to avoid the duty. - ANSWER -c. The obligation is
enforceable on the obligor entity.
2. A constructive obligation arises when
a. the entity is legally obligated to honour the obligation.
b. the entity makes an unconditional promise to pay money in the future.
,c. past or present company practice reveals the entity acknowledges a potential economic
burden.
d. the entity has a conditional obligation which becomes unconditional if an uncertain future
event occurs. - ANSWER -c. past or present company practice reveals the entity
acknowledges a potential economic burden.
3. Which of the following statements is NOT true about recognition and subsequent
accounting for financial liabilities?
a. They are initially recognized at their fair value.
b. After acquisition, they continue to be accounted for at fair value.
c. After acquisition, they are generally accounted for at amortized cost.
d. Short term liabilities, such as accounts payable, are usually recorded at their maturity value.
- ANSWER -b. After acquisition, they continue to be accounted for at fair value.
4. Among Oslo Corp.'s short-term obligations, on its most recent statement of financial
position date, are notes payable totalling $250,000 with the Provincial Bank. These are 90-day
notes, renewable for another 90-day period. These notes should be classified on Oslo's
statement of financial position as
a. current liabilities.
b. deferred charges.
c. long-term liabilities.
d. shareholders' equity. - ANSWER -a. current liabilities.
5. Regarding zero-interest-bearing notes,
, a. they do not have an interest component.
b. the debtor receives the future value of the note and pays back the present value.
c. any interest is never recognized until the note is repaid.
d. the debtor receives the present value of the note and pays back the future value. -
ANSWER -d. the debtor receives the present value of the note and pays back the future
value.
6. Under IFRS, even if the entity plans to refinance long term debt, the current portion must be
reported as a current liability UNLESS
a. long term financing has been completed after the statement of financial position date, but
before the financial statements are released.
b. management intends to refinance the debt on a long-term basis.
c. at statement of financial position date, the entity expects to refinance under an existing
agreement for at least a year, and the decision is solely at its discretion.
d. management intends to discharge the debt by issuing shares. - ANSWER -c. at
statement of financial position date, the entity expects to refinance under an existing
agreement for at least a year, and the decision is solely at its discretion.
7. On November 1, 2014, Best Corp. signed a three-month, zero-interest-bearing note for the
purchase of $80,000 of inventory. The maturity value of the note was $81,200, based on the
bank's discount rate of 6%. The adjusting entry prepared on December 31, 2014 in connection
with this note will include a
a. debit to Note Payable for $800.
b. credit to Note Payable for $800.
