Reference no: EM132893300

Problem 1: Failure to record the year-end adjustment for amortization will result in:

A. an overstatement of income and an understatement of assets.

B. an overstatement of income and an overstatement of assets.

C. an understatement of income and an overstatement of capital.

D. an overstatement of income and an understatement of capital.

Problem 2: Which of the following statements is not true?

A. In a public issue of shares, the procedure to be adopted in the case of an oversubscription is normally specified in the prospectus.

B. The owners' equity of an organization is the same as the shareholders' funds of a company.

C. If an entity performs a share split on a partly paid share, the split must be done in such a way as to divide the uncalled portion equally among the shares issued.

D. An allotment account, being a receivable account from subscribers in a share issue, is presented under current assets in the statement of financial position.

Problem 3: Unidentifiable intangible assets are those that cannot be separately sold. Which of the following set of items are examples of unidentifiable intangible assets?

A. Brand names and loyal customers

B. Established reputation and trademarks.

C. Loyal customers and established reputation.

D. Patents, copyrights and goodwill.