Intermediate Accounting II Exam Review
Course Introduction
Intermediate Accounting II builds upon foundational accounting concepts, focusing on complex financial reporting and accounting standards. The course covers topics such as liabilities, equity, revenue recognition, leases, pensions, income taxes, and accounting for changes and error corrections. Students will deepen their understanding of the preparation, analysis, and interpretation of financial statements, and learn how to apply regulatory and ethical considerations in the reporting process. By engaging with case studies and problem-solving, students develop critical thinking and technical skills essential for advanced accounting practice and progression toward professional certification.
Recommended Textbook
Fundamentals of Advanced Accounting 7th Edition by Joe Ben Hoyle
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12 Chapters
1194 Verified Questions
1194 Flashcards
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Page 2
Chapter 1: The Equity Method of Accounting for Investments
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121 Verified Questions
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Sample Questions
Q1) When an investor appropriately applies the equity method,how should it account for any investee Other Comprehensive Income (OCI)?
A)Under the equity method,the investor only recognizes its share of investee's income from continuing operations.
B)The OCI would reduce the investment.
C)The OCI would increase the investment.
D)The OCI would not appear on the investor's income statement but would be a component of comprehensive income.
E)The OCI would be ignored but shown in the investor's notes to the financial statements.
Answer: C
Q2) What is the balance in the investment account for the 15% ownership interest,at January 1,2018?
A)$150,000.
B)$172,500.
C)$180,000.
D)$157,500.
E)$170,000
Answer: A
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Chapter 2: Consolidation of Financial Information
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Sample Questions
Q1) Compute consolidated goodwill at the date of the acquisition.
A)$360.
B)$450.
C)$460.
D)$440.
E)$475.
Answer: B
Q2) Compute the amount of the consideration transferred by Atwood to acquire Franz.
A)$1,750.
B)$1,760.
C)$1,775.
D)$1,300.
E)$1,120.
Answer: A
Q3) Assume that Bellington paid cash of $2.8 million.No stock is issued.An additional $50,000 is paid in direct combination costs.
Required: For Goodwill,determine what balance would be included in a December 1,2017 consolidation.
Answer: 11ee3f35_43b8_b8e3_a6ca_9566e131ceca_TB4173_00
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Chapter 3: Consolidations - Subsequent to the Date of Acquisition
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Sample Questions
Q1) Compute the amount of Hurley's buildings that would be reported in a December 31,2017,consolidated balance sheet.
A)$1,560.
B)$1,260.
C)$1,440.
D)$1,160.
E)$1,140.
Answer: B
Q2) What should an entity evaluate when making an initial impairment assessment of an intangible asset (other than goodwill)?
Answer: An entity may perform qualitative assessments for its indefinite-lived intangible assets.If an entity elects to perform a qualitative assessment,it must examine relevant events and circumstances to determine whether it is more likely than not that the asset is impaired.Factors to consider include costs of using the intangible asset,legal and regulatory factors,as well as industry and market considerations.If the assessment indicates impairment is not likely,no further tests are required.
Q3) What was consolidated net income for the year ended December 31,2018?
Answer: 11ea86f8_4aa6_8616_8084_993cdf66b9a1_TB4173_00
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Chapter 4: Consolidated Financial Statements and Outside Ownership
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Sample Questions
Q1) Compute the noncontrolling interest in Demers at December 31,2021.
A)$107,800.
B)$140,000.
C)$165,200.
D)$160,800.
E)$146,800.
Q2) What is the amount of excess land allocation attributed to the noncontrolling interest at the acquisition date?
A)$ 0.
B)$30,000.
C)$22,500.
D)$ 7,500.
E)$17,500.
Q3) How much does Pell record as income from Demers for the year ended December 31,2020?
A)$90,400.
B)$89,000.
C)$50,400.
D)$96,000.
E)$56,000.
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Chapter 5: Consolidated Financial Statements Intra-Entity
Asset Transactions
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Sample Questions
Q1) Compute the equity in earnings of Gargiulo reported on Posito's books for 2019.
A)$84,600.
B)$84,375.
C)$83,925.
D)$84,825.
E)$84,850.
Q2) Varton Corp.acquired all of the voting common stock of Caleb Co.on January 1,2018.Varton owned some land with a book value of $84,000 that was sold to Caleb for its fair value of $120,000.How should this transfer be accounted for by the consolidated entity?
Q3) Prepare journal entries for Virginia and Stateside to record the sales/purchases during 2017.
Q4) At what amount should the equipment (net of depreciation)be included in the consolidated balance sheet dated December 31,2017?
A)$105,000.
B)$100,000.
C)$ 95,000.
D)$ 80,000.
E)$ 85,000.
Page 7
Q5) What is consolidated net income for 2018?
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Chapter 6: Variable Interest Entities, Intra-Entity Debt,
Consolidated Cash Flows, and Other Issues
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Sample Questions
Q1) If a subsidiary re-acquires its outstanding shares from outside ownership for more than the noncontrolling interest valuation basis at the date of buying such treasury stock,which of the following statements is true?
A)Additional paid-in capital on the parent company's books will decrease.
B)Investment in subsidiary will increase.
C)Treasury stock on the parent's books will increase.
D)Treasury stock on the parent's books will decrease.
E)No adjustment is necessary.
Q2) All of the following are examples of variable interests except:
A)Guarantees of debt.
B)Stock options.
C)Lease residual value guarantees.
D)Participation rights.
E)Asset purchase options.
Q3) What is the controlling interest share of Thomas' net income for the year ended December 31,2018?
Q4) What was Kuried's balance in the Investment in Thomas Inc.account as of December 31,2018?
Q5) Describe how this transaction would affect Panton's books.
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Chapter 7: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
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99 Verified Questions
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Sample Questions
Q1) Assuming this is a fair value hedge;prepare journal entries for this sales transaction and forward contract.
Q2) How does a foreign currency forward contract differ from a foreign currency option?
Q3) A spot rate may be defined as
A)The price a foreign currency can be purchased or sold today.
B)The price today at which a foreign currency can be purchased or sold in the future.
C)The forecasted future value of a foreign currency.
D)The U.S.dollar value of a foreign currency.
E)The Euro value of a foreign currency.
Q4) The forward rate may be defined as
A)The price a foreign currency can be purchased or sold today.
B)The price today at which a foreign currency can be purchased or sold in the future.
C)The forecasted future value of a foreign currency.
D)The U.S.dollar value of a foreign currency.
E)The Euro value of a foreign currency.
Q5) What amount will Coyote Corp.report in its 2018 balance sheet for Accounts payable?
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Chapter 8: Translation of Foreign Currency Financial
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Sample Questions
Q1) Contrast the purpose of remeasurement with the purpose of translation.
Q2) Under the current rate method,depreciation expense would be translated at what rate?
A)Beginning of the year rate.
B)Average rate.
C)Current rate.
D)Historical rate.
E)Composite amount.
Q3) Prepare an income statement for this subsidiary in stickles and then translate these amounts into U.S.dollars.
Q4) Assume the functional currency is the Euro;compute the U.S.Statement of Retained Earnings amount reported for Dividends in 2018.
A)$19,000.
B)$20,200.
C)$18,600.
D)$19,400.
E)$19,600.
Q5) What is the justification for the remeasurement of foreign currency transactions?
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Chapter 9: Partnerships: Formation and Operation
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Sample Questions
Q1) What was Nolan's capital balance at the end of 2017?
A)$200,000.
B)$224,000.
C)$238,000.
D)$246,000.
E)$254,000.
Q2) What was Wasser's capital balance at the end of 2017?
A)$150,000.
B)$160,000.
C)$165,000.
D)$213,000.
E)$201,000.
Q3) What will be the amount of interest attributed to Cleary in the income distribution for 2019?
A)$15,142.
B)$13,942.
C)$12,942.
D)$14,142.
E)$10,000.
Q4) Record the journal entry to allocate the salary of Noris.
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Chapter 10: Partnerships: Termination and Liquidation
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Sample Questions
Q1) Harding,Jones,and Sandy,a partnership,is in the process of liquidating.The partners have the following capital account balances;$24,000,$24,000,and ($9,000)respectively.The partners share all profits and losses 16%,48%,and 36%,respectively.Sandy has indicated that the ($9,000)deficit will be covered with a forthcoming contribution.The remaining partners have requested an immediate distribution of $20,000 in cash that is available.How should this cash be distributed?
A)Harding $5,000;Jones $15,000.
B)Harding $17,000;Jones $3,000.
C)Harding $11,154;Jones $8,846.
D)Harding $14,297;Jones $5,703.
E)Harding $12,500;Jones $7,500.
Q2) Record the journal entry for the cash distribution to the partners.
Q3) If the assets could be sold,for $228,000 and there are no liquidation expenses what is the amount that Tillman would receive from the liquidation?
A)$36,000.
B)$ 0.
C)$ 2,500.
D)$38,250.
E)$67,250.
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Chapter 11: Accounting for State and Local Governments, part
I
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Sample Questions
Q1) What assets would be included in the accounting records of a city's general fund?
Q2) Revenue from property taxes should be recorded in the General Fund
A)When received.
B)When there is an enforceable legal claim.
C)When they are available for recognition.
D)In the period for which the resulting resources are required or permitted to be used.
E)In the period in which the tax bills are mailed.
Q3) What is the definition of the term fund?
Q4) Annual budgets must be recorded within:
A)The general fund and special revenue funds.
B)Capital projects funds and debt service funds.
C)Enterprise funds and internal service funds.
D)The general fund and pension trust Fund.
E)Agency funds and the general fund.
Q5) What are the five types of governmental funds?
Q6) What is the primary difference between monies accounted for in the general fund and monies accounted for in the special revenue fund?
Q7) For what is a special revenue fund used to account?
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Chapter
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Sample Questions
Q1) A local government's basic financial statements would include a statement of cash flows for all
A)proprietary fund types.
B)governmental fund types.
C)fund types.
D)fiduciary fund types.
E)A statement of cash flows is not required for any fund types.
Q2) The modified approach to accounting for infrastructure assets may be utilized by a state or local government if:
i.The government accumulates information about all infrastructure assets within either a network or subsystem of a network.
ii.The government capitalizes infrastructure assets.
iii.The government expenses costs of maintaining the infrastructure assets.
iv.The government chooses to depreciate its infrastructure assets.
A)i and ii.
B)i,ii,and iv.
C)ii and iii.
D)i,ii,and iii.
E)i,ii,iii,and iv.
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