Reference no: EM133234263

Advanced Financial Accounting and Reporting

1. Which of the following statement is correct when a new partner is admitted to an existing partnership by purchasing a portion of a capital interest of an existing partner?

• The partnership is not dissolved by the admission of a new partner by purchase.
• It will result to revaluation or impairment of existing assets of partnership.
• It will just result to credit to capital of newly admitted partner with corresponding debit to capital of the selling partner.
• The partnership will recognize gain/loss in the transfer of capital from one partner to another partner.

2. All of the following are ways of determining the stage of completion of a particular construction contract EXCEPT:

• The proportion that contract cost incurred for work performed to date bear to the estimated total contract costs.
• The amount of cash collected from the customer in relation to the total contract price.
• Completion of physical proportion of the contract work.
• Surveys of work performed.

3. The Home Office Current account in the books of the branch is comparable to:

• Equity account
• Liability account
• Contra account
• Asset account

4. In a cost of production report using process costing, transferred-in costs are similar to the

• cost included in beginning inventory.
• cost transferred out to the next department.
• cost of material added at the beginning of production.
• conversion cost added during the period.

5. Which of the following does not qualify for over time revenue recognition?

• The customer obtains the significant risks and rewards of ownership of the asset.
• The customer simultaneously receives and consumes the benefits provided by the entity's performance.
• The entity's performance creates or enhances an asset that the customer controls as the asset is created or enhanced.
• The entity's performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment.

6. In job order costing, the basic document to accumulate the cost of each order is the:

• Purchase order
• Job order cost sheet
• Invoice
• Materials requisition slip

7. A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when

• material is issued to production
• production is completed
• material is purchased
• material is used in production

8. In partnership liquidations, what are safe payments?

• The amounts of distributions that can be made to the partners, after all noncash assets have been adjusted to fair market value.
• The amount of distributions made to the partners if all of them have credit balances.
• The amounts of distributions that can be made to the partners, after all creditors have been paid in full.
• The amounts of distributions that can be made to the partners with assurance that such amounts will not have to be returned to the partnership.