71) Rent expired at the end of an accounting period requires an adjustment. 72) The original cost of equipment is not reduced by the amount of Depreciation Expense. 73) The spreading or allocating of the cost of a long-term asset is called discounting. 74) Accumulated Depreciation is a contra-asset account. 75) The worksheet contains a trial balance. 76) Depreciation Expense is debited when recording the depreciation for the period. 77) The use of straight-line depreciation results in equal amounts of depreciation being taken over a period of time. 78) Prepaid Rent Expense is a contra-asset with a normal balance […]

  1) What is the exchange rate in effect at the date of the transaction called? A) Closing rate B) Spot rate C) Forward rate D) Settlement rate 2) Which of the following statements is true? A) The historical rate is the exchange rate at the beginning of the reporting period and the closing rate is the exchange rate at the end of the reporting period. B) The historical rate is the exchange rate at the date of the transaction and the closing rate is the exchange rate at the end of the reporting period. C) The spot rate is […]

Chapter 3  Business Combinations   1) Which of the following is not a business combination? A) Statutory amalgamation B) Joint venture C) A company's purchase of 100% of another company's net assets D) A company's purchase of 80% of another company's voting shares 2) Under IFRS 3, Business Combinations, which method must be used to account for business combinations? A) Purchase method B) Pooling-of-interests method C) Acquisition method D) New entity method 3) After an exchange of shares in a business combination, each group of shareholders held 50% of the voting rights. Which of the following factors should be considered […]

  1) Passive investments can be classified as fair value through profit or loss (FVTPL) or as fair value through other comprehensive income (FVTOCI). Which of the following statements is true? A) Under both FVTPL and FVTOCI, changes in the fair value of the investment are reported as other comprehensive income on the statement of comprehensive income. B) Under both FVTPL and FVTOCI, changes in the fair value of the investment are reported under the net income section on the statement of comprehensive income. C) Under both FVTPL and FVTOCI, dividends received from the investee are reported under the net […]

21) On January 1, 20X3, Dwayne Ltd. formed Carlos Co., a 100% owned subsidiary. During 20X6, Dwayne sold Carlos $100,000 in goods. The unrealized profit in Carlos' inventories was $20,000 at December 31, 20X5 and $25,000 at December 31, 20X6. Ignoring income taxes, what adjustment should be made to the consolidated financial statements for the year ended December 31, 20X6 to reflect the unrealized profit in Carlos' ending inventory? A) Inventory at December 31, 20X6 will be increased by $25,000. B) Cost of goods sold for 20X6 will be decreased by $25,000. C) Retained earnings at the end of 20X6 […]