Introduction to Accounting II Exam Solutions
Course Introduction
Introduction to Accounting II builds upon the foundational principles covered in the first semester of accounting, delving deeper into financial accounting concepts and expanding into managerial accounting topics. The course introduces students to complex transactions, including inventory valuation, long-term assets, liabilities, and shareholders equity. It also covers the preparation and analysis of financial statements, budgeting, cost accounting, and decision-making using accounting information. Emphasis is placed on developing analytical and problem-solving skills necessary for interpreting accounting data in a business context. This course prepares students for advanced study in accounting and provides essential knowledge for careers in finance, management, and entrepreneurship.
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) Brown invests cash of $20,000 and a building with a cost of $350,000 and accumulated amortization to date of $195,000 in the Brown and Winter Partnership.The building has a current market value of $325,000.A mortgage payable of $105,000 is outstanding on the building and will be assumed by the partnership.Brown's capital account would be credited for:
A) $165,000
B) $175,000
C) $240,000
D) $70,000
Answer: C
Q2) A new partner may be admitted to a partnership by purchasing an existing partner's interest.
A)True
B)False Answer: True
Q3) Partners can share in net income or loss in any manner they choose.
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 articles of incorporation determines the rights given to each class of shares. A)True
B)False Answer: True
Q2) Cooper Corporation's balance sheet for 2016 reveals total shareholders' equity of $3,000,000.There are 20,000 shares of noncumulative,$15 preferred shares outstanding and 50,000 common shares outstanding.The liquidation value of the preferred shares is $80 per share.Book value per share of common shares is:
A) $28.00
B) $29.50
C) $28.50
D) $28.75
Answer: A
Q3) The declaration of a dividend:
A) increases total shareholders' equity
B) reduces total assets
C) increases total assets
D) increases total liabilities
Answer: D
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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) Which of the following would be a reason for a company to appropriate a portion of retained earnings?
A) to ensure that the business does not take on too much debt
B) to increase the amount of earnings available for dividends
C) to help the company control levels of operating expenses
D) to limit the amount of retained earnings available for dividends, in order to retain sufficient funds for growth
Answer: D
Q2) Refer to Table 14-3.Assume Monty purchased 15,000 of its common shares at $10.00 per share.This transaction would:
A) increase total shareholders' equity
B) have no effect on total shareholders' equity
C) decrease total shareholders' equity
D) increase assets
Answer: C
Q3) When a corporation repurchases its own shares,there is no effect on income.
A)True
B)False
Answer: True
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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) Refer to Table 15-3.What is the amount of interest expense and premium amortization that Redding Corporation will record on August 1,2017,the first semiannual interest payment date?
A) \[\begin{array} { | l | l | }
\hline \text { Interest expense } & \text { Premium amortization } \\ \hline\$ 20,000.00 & \$ 1,351.50\\\hline \end{array}\]
B) \[\begin{array} { | l | l | }
\hline \text { Interest expense } & \text { Premium amortization } \\ \hline\$ 17,297.68 & \$ 2,702.32\\\hline \end{array}\]
C) \[\begin{array} { | l | l | }
\hline \text { Interest expense } & \text { Premium amortization } \\ \hline\$ 20,000.00 & \$ 2,000.00\\\hline \end{array}\]
D) \[\begin{array} { | l | l | }
\hline \text { Interest expense } & \text { Premium amortization } \\ \hline\$ 16,000.00 & \$ 4,000.00\\\hline \end{array}\]
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6
Chapter 5: Investments and International Operations
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191 Verified Questions
191 Flashcards
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Sample Questions
Q1) Kalyan Corporation engaged in the following transactions during 2017.
2017
Oct. 31 Purchased goods on accounts from a Dutch supplier at a cost of 80,000 Euros. The exchange rate on this date was \( \$ 1.40 \) per. Euro. \(\text { Nov, } 19 \text { Paid the Dutch supplier when the exchange rate was } \$ 1.32 \text { per Euro. }\) Dec. 11 Sold goods on account to a U.S. bryyer at a selling price of \( \$ 70,000 \) U.S. dollars. The exchange rate on this date was \( \$ 1.02 \) Canadian dollars for each U.S. dollar Ignore the journal entry to record cost of goods sold. Dec. 31 Adjusted for the increase in the value of the US dollar, which had an exchange rate of \( \$ 0,99 \). Kalyan's year end is December 31 2018
Jan. 5 Received payment from the U.S. buyer for the goods sold on Dec. 11 The exchange rate on this date was \( \$ 1.01 \) Canadian dollars for each U.S. dollar Prepare the journal entries necessary to record each of the above transactions.
Q2) A joint venture can take the form of a corporation or a partnership. A)True B)False
Q3) Described what is meant by a strong or weak currency.Explain two underlying reasons why currencies change in relation to each other.
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Chapter 6: The Cash Flow Statement
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207 Verified Questions
207 Flashcards
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Sample Questions
Q1) Cash collections from customers equals sales on account less the increase in accounts receivable.
A)True
B)False
Q2) Under Accounting Standards for Private Enterprises (ASPE),dividends received and paid are reported as investing and financing activities respectively.
A)True
B)False
Q3) Paying interest on money borrowed from the bank would be reported in the operating activities section of the cash flow statement.
A)True
B)False
Q4) Cash received from the issuance of shares would appear in the:
A) investing activities section
B) financing activities section
C) operating activities section
D) investing activities section or the financing activities section
Q5) The most important long-run source of cash inflow
Q6) IFRS statement of cash flows classification of dividend payments
Page 8
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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) Creditors are more concerned about profitability,dividends,and future share prices than about short-term liquidity and long-term solvency.
A)True
B)False
Q2) Describe what is meant by the phrase efficient capital market.How does the level of market efficiency affect a value investor.
Q3) Using standard measures enable investors and creditors to compare companies of similar sizes or different sizes.
A)True
B)False
Q4) If an analyst wishes to see how a company's net income as a percentage of net sales has changed from one year to the next,a vertical analysis would be the most appropriate approach.
A)True
B)False
Q5) The ability to generate enough cash to pay long-term debts as they mature
Q6) Ratio of income from operations to interest expense
Q7) Ratio of net credit sales to average net accounts receivable
Q8) Current assets divided by current liabilities
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