Accounting Principles II Exam Review

Course Introduction

Accounting Principles II builds upon foundational accounting concepts to explore more advanced topics such as corporate accounting, managerially-focused processes, and the preparation and analysis of financial statements. This course covers key areas including inventories, long-term assets, liabilities, stockholders equity, and the principles behind cost allocation and budgeting. Students learn how to interpret and utilize accounting data for decision-making in business contexts, enhance their analytical skills through various accounting methods, and apply these principles to real-world scenarios, preparing them for further studies in accounting or related business fields.

Recommended Textbook

Horngren's Accounting Volume 2 10th Canadian Edition by Tracie L. Miller Nobles

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7 Chapters

1392 Verified Questions

1392 Flashcards

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Page 2

Chapter 1: Partnerships

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202 Verified Questions

202 Flashcards

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Sample Questions

Q1) Assume the partnership agreement specifies net income is to be divided as follows: $30,000 to A and $40,000 to B for service with any remaining profit or loss divided equally between the partners.If net loss for the current year is $85,000,A's distributive share of net loss would be:

A) $37,500

B) $47,500

C) $30,000

D) $40,000

Answer: B

Q2) When a partner withdraws from the partnership,his capital account is always debited for the amount of cash taken.

A)True

B)False Answer: False

Q3) At the completion of the liquidation of a partnership,all accounts in the general ledger have a nil balance.

A)True

B)False Answer: True

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Page 3

Chapter 2: Corporations: Share Capital and the Balance Sheet

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180 Verified Questions

180 Flashcards

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Sample Questions

Q1) The declaration date and the payment date of a cash dividend are the same thing.

A)True

B)False

Answer: False

Q2) Refer to Table 13-6.The average issue price of a preferred share was:

A) $1.60

B) $20.00

C) $40.00

D) $8.00

Answer: D

Q3) It is easier to achieve continuous life using the corporate structure for an organization.

A)True

B)False Answer: True

Q4) Cash dividends become a liability of the corporation on the declaration date.

A)True

B)False

Answer: True

Page 4

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Chapter 3: Corporations: Retained Earnings and the

Income Statement

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205 Verified Questions

205 Flashcards

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Sample Questions

Q1) Describe the similarities and differences of stock dividends and cash dividends.

Answer: Similarities: 1_Both involve a journal entry as the corporation is making a distribution to shareholders,2_similar dates are involved - declaration,date of record and payment/distribution,and 3_both are declared by the board of directors and involve a very formal process.

Differences: 1_Cash dividend is a distribution of an asset and therefore decreases total shareholder's equity,whereas stock dividend is a distribution of equity,and therefore there is no effect on total shareholder's equity,2_given that the cash dividend is a distribution of an asset,the declaration creates a legal liability that the corporation must recognize; this is not true for a stock dividend,and 3_there are restrictions placed on cash dividends in order to protect the creditors of the corporation.

Q2) Refer to Table 14-4.How would the flood loss appear on the year-end income statement?

A) $25,000 loss, as part of other gains and losses

B) $18,750 loss, as an extraordinary item

C) $25,000 loss, as a prior-period adjustment

D) $18,750 loss, as part of income from continuing operations

Answer: A

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Chapter 4: Long-Term Liabilities

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186 Verified Questions

186 Flashcards

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Sample Questions

Q1) On January 2,2017,Saturn Corporation issued $200,000,8%,10-year bonds for $220,000.The bonds pay interest each December 31.Saturn Corporation uses the straight-line method to amortize premium or discount.On December 31,2017,Saturn Corporation would record a:

A) credit to Cash for $18,000

B) debit to Interest Expense for $16,000

C) debit to Interest Expense for $18,000

D) debit Premium on Bonds Payable for $2,000

Q2) The present value of $2,000 to be received three years from now at 10% interest per year is:

A) $1,818.18

B) $1,652.89

C) $1,502.00

D) $2,662.00

Q3) Jones Corporation issues $400,000,10%,five-year bonds at face value.The total interest expense over the life of the bonds is:

A) $40,000

B) $400,000

C) $200,000

D) $8,000

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Chapter 5: Investments and International Operations

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191 Verified Questions

191 Flashcards

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Sample Questions

Q1) Elimination journal entries created during the process of preparing consolidated financial statements are found on:

A) the books of the parent

B) the books of the subsidiary

C) the books of the consolidated entity

D) the worksheet used in consolidation

Q2) Under IFRS,joint ventures are accounted for using the proportionate consolidation method.

A)True

B)False

Q3) A stock dividend received on short-term investments increases the cost per share of the stock investment.

A)True

B)False

Q4) Long-term investments in bonds are reported on the balance sheet at their fair market value.

A)True

B)False

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Page 7

Chapter 6: The Cash Flow Statement

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207 Verified Questions

207 Flashcards

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Sample Questions

Q1) The main difference between the direct method and the indirect method cash flow statements is

A) the presentation of cash flow from operations

B) the balance of the income from operations

C) the treatment of dividends received and paid

D) the inclusion of investment gains and losses

Q2) Paying principal on a bank loan would be reported in the operating activities section of the cash flow statement.

A)True

B)False

Q3) A loss from sale of equipment would appear on the cash flow statement using the indirect approach as a(n):

A) addition under financing activities

B) addition under investing activities

C) addition to net income in the operating activities section

D) deduction from net income in the operating activities section

Q4) Cash available from operations after paying for planned investments

Q5) If accounts receivable increases,then sales exceeded cash receipts on account.

A)True

B)False

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Chapter 7: Financial Statement Analysis

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214 Verified Questions

214 Flashcards

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Sample Questions

Q1) Cost of goods sold for 2017 was $250,000 while net sales amounted to $575,000.On January 1,2017,inventory was $150,000,and on December 31,2017,inventory was $175,000.Inventory turnover for 2017 was:

A) 1.54

B) 1.67

C) 1.43

D) 1.00

Q2) Refer to Table 18-11.What was the percent increase or decrease in net accounts payable from 2016 to 2017?

A) 28.6% increase

B) 28.6% decrease

C) 40.1% increase

D) 40.1% decrease

Q3) Common-size financial statements are infrequently used by financial analysts as they do not compare the financial statement results of one company with average statistics for companies in the same industry.

A)True

B)False

Q4) Ratio of income from operations to interest expense

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