Reading22.FinancialStatementAnalysis:AnIntroduction試題整理

PRACTICEPROBLEMS

1.Providinginformationabouttheperformanceandfinancialpositionofcompaniessothatuserscan

makeeconomicdecisionsbestdescribestheroleof:

A.auditing.

B.financialreporting.

C.financialstatementanalysis.

2.Acompany*scurrentfinancialpositionwouldbestbeevaluatedusingthe:

A.balancesheet.

B.incomestatement.

C.statementofcashflows.

3.Acompan/sprofitabilityfbraperiodwouldbestbeevaluatedusingthe:

A.balancesheet.

B.incomestatement.

C.statementofcashflows.

4.Accountingpolicies,methods,andestimatesusedinpreparingfinancialstatementsaremostlikely

foundinthe:

A.auditor'sreport.

B.managementcommentary.

C.notestothefinancialstatements.

5.Informationaboutmanagementanddirectorcompensationwouldleastlikelybefoundinthe:

A.auditor'sreport.

B.proxystatement.

C.notestothefinancialstatements.

6.Informationaboutacompan/sobjectives,strategies,andsignificantriskswouldmostlikelybe

foundinthe:

A.auditor'sreport.

B.managementcommentary.

C.notestothefinancialstatements.

7.Whattypeofauditopinionispreferredwhenanalyzingfinancialstatements?

A.Qualified.

B.Adverse.

C.Unqualified.

8.Ratiosareaninputintowhichstepinthefinancialstatementanalysisframework?

A.Processdata.

B.Collectinputdata.

C.Analyze/intcrprettheprocesseddata.

Reading22.FinancialStatementAnalysis:AnIntroduction試題答案整理

Solutions

SOLUTIONS

1.Biscorrect.Thisistheroleoffinancialreporting.Theroleoffinancialstatementanalysisisto

evaluatethefinancialreports.

2.Aiscorrect.Thebalancesheetportraysthecurrentfinancialposition.Theincomestatementand

statementofcashflowspresentdiffbrentaspectsofperformance.

3.Biscorrect.Profitabilityistheperformanceaspectmeasuredbytheincomestatement.Thebalance

sheetportraysthecurrentfinancialposition.Thestatementofcashflowspresentsadifferentaspectof

performance.

4.Ciscorrect.Thenotesdisclosechoicesinaccountingpolicies,methods,andestimates.

5.Aiscorrect.Informationaboutmanagementanddirectorcompensationisnotfoundintheauditor's

report.Disclosureofmanagementcompensationisrequiredintheproxystatement,andsomeaspectsof

managementcompensationaredisclosedinthenotestothefinancialstatements.

6.Biscorrect.Thesearecomponentsofmanagementcommentary.

7.Ciscorrect.Anunqualifiedopinionisa"clean'1opinionandindicatesthattheFinancialstatements

presentthecompany'sperformanceandfinancialpositionfairlyinaccordancewithaspecifiedsetof

accountingstandards.

8.Ciscorrect.Ratiosareanoutputoftheprocessdatastepbutareaninputintotheanalyze/interpret

datastep.

Reading23.FinancialReportingMechanics試題整理

1.Whichofthefollowingitemswouldmostlikelybeclassifiedasanoperatingactivity?

A.Issuanceofdebt.

B.Acquisitionofacompetitor.

C.Saleofautomobilesbyanautomobiledealer.

2.Whichofthefollowingitemswouldmostlikelybeclassifiedasfinancingactivity?

A.Issuanceofdebt.

B.Paymentofincometaxes.

C.Investmentsinthestockofasupplier.

3.Whichofthefollowingelementsrepresentsaneconomicresource?

A.Asset.

B.Liability.

C.Owners'equity.

4.Whichofthefollowingelementsrepresentsaresidualclaim?

A.Asset.

B.Liability.

C.Owners*equity.

5.Ananalysthasprojectedthatacompanywillhaveassetsof€2,000atyear-endandliabilitiesof

€1,200.Theanalystsprojectionoftotalowners*equityshouldbeclosestto:

A.€800.

B.€2,000.

C.€3,200.

6.Ananalysthascollectedthefollowinginformationregardingacompanyinadvanceofitsyear-end

earningsannouncement(inmillions):

Estimatednetincome$200

Beginningretainedearnings$1,400

Estimateddistributionstoowners$100

Theanalyst'sestimateofendingretainedearnings{inmillions}shouldbeclosestto:

2

A.$1,300.

B.$1,500.

C.$1,700.

7.AnanalysthascompiledthefollowinginformationregardingRubsam,Inc.

Liabilitiesatyear-end€1,000

Contributedcapitalatyear-end€500

Beginningretainedearnings€600Revenueduringtheyear

Revenueduringtheyear€5,000

Expensesduringtheyear€4,300

Therehavebeennodistributionstoowners.Theanalyst'smostlikelyestimateoftotalassets

year-endshouldbeclosestto:

A€2,100.

B€2.300.

C€2,800.

8.Agroupofindividualsformedanewcompanywithaninvestmentof$500,000.themostlikely

effectofthistransactiononthecompan/saccountingequationatthetimeoft:heformationisan

increaseincashand:

A.anincreaseinrevenue.

B.anincreaseinliabilities.

C.anincreaseinContributedcapital.

9.HVG,LLCpaid$12,000ofcashtoarealestatecompanyuponsigningaleaseon31December

2005.ThepaymentrepresentsaS4,000securitydepositand$4,000ofrentforeachofJanuary2006

andFebruary2006.AssumingthatthecorrectaccountingistoreflectbothJanuaryandFebruary

rentasprepaid.ThemostlikelyeffectonHVG'saccountingequationinDecember2005is:

A.nonetchangeinassets.

B.adecreaseinassetsof$8,000.

C.adecreaseinassetsof$12,000.

10.TRREnterprisessoldproductstocustomerson30June2006foratotalpriceof€10,000.The

termsofthesalearethatpaymentisduein30days.Thecostoftheproductswas€8,000.Themost

likelynetchangeinTRR'stotalassetson30June2006relatedtothistransactionis:

A.€0.

B.€2,000.

C.€10,000.

11.On30April2006,PintoProductsreceivedacashpaymentofS30,000asadepositonproduction

ofacustommachinetobedeliveredinAugust2006thistransactionwouldmostlikelyresultin

whichofthefollowingon30April2006?

A.Noeffectonliabilities.

B.Adecreaseinassetsof$30,000.

C.Anincreaseinliabilitiesof$30,000.

12.Squires&Johnson,Ltd.,recorded€250,000ofdepreciationexpenseinDecember2005.Themost

likelyeffectonthecompany'saccountingequationis:

A.noeffectonassets.

B.adecreaseinassetsof€250,000.

C.anincreaseinliabilitiesof€250,000.

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13.Ananalystwhoisinterestedinassessingacompany'sfinancialpositionismostlikelytofbcuson

whichfinancialstatement?

A.Balancesheet.

B.Incomestatement.

C.Statementofcashflows.

14.Thestatementofcashflowspresentstheflowsintowhichthreegroupsofbusinessactivities?

A.Operating,Nonoperating,andFinancing.

B.Operating,Investing,andFinancing.

C.Operating.Nonoperating,andInvesting.

15.Whichofthefollowingstatementsaboutcashreceivedpriortotherecognitionofrevenueinthe

financialstatementsismostaccurate?Thecashisrecordedas;

A.deferredrevenue,anasset.

B.accruedrevenue,aliability.

C.deferredrevenue,aliability.

16,When,attheendofanaccountingperiod,arevenuehasbeenrecognizedinthefinancial

statementsbutnobillinghasoccurredandnocashhasbeenreceived,theaccrualisto:

A.unbilled(accrued)revenue,anasset.

B.deferredrevenue,anasset.

C.unbilled(accrued)revenue,aliability

17.Whenattheendofanaccountingperiod,cashhasbeenpaidwithrespecttoanexpense,the

businessshouldthenrecord:

A.anaccruedexpense,anasset.

B.aprepaidexpense,anasset.

C.anaccruedexpense,aliability

18.When,attheendofanaccountingperiod,cashhasnotbeenpaidwithrespecttoanexpensethat

hasbeenincurred,thebusinessshouldthenrecord:

A.anaccruedexpense,anasset.

B.aprepaidexpense,anasset.

C.anaccruedexpense.aliability.

19.Thecollectionofallbusinesstransactionssortedbyaccountinanaccountingsystemisreferredto

as:

A.atrialbalance.

B.ageneralledger.

C.ageneraljournal.

20.Ifacompanyreportedfictitiousrevenue,itcouldtrytocoverupitsfraudby:

A.decreasingassets.

B.increasingliabilities.

C.creatingafictitiousasset.

Reading23.FinancialReportingMechanics試題答案整理

1.Ciscorrect.Salesofproducts,aprimarybusinessactivity,areclassifiedasanoperatingactivity.

Issuanceofdebtwouldbeafinancingactivity.Acquisitionofacompetitorandthesaleofsurplus

equipmentwouldbothbeclassifiedasinvestingactivities.

4

2.Aiscorrect.Issuanceofdebtwouldbeclassifiedasafinancingactivity.Bisincorrectbecause

paymentofincometaxeswouldbeclassifiedasanoperatingactivity.Cisincorrectbecause

investmentsincommonstockwouldbegenerallyclassifiedasinvestingactivities.

3.Aiscorrect.Anassetisaneconomicresourceofanentitythatwillcitherbeconvertedintocashor

consumed.

4.Ciscorrect.Owners*equityisaresidualclaimontheresourcesofabusiness.

5.Aiscorrect.Assetsmustequalliabilitiesplusowners*equityand,therefore,€2,000=€1,200+

Owners*equity.Owners*equitymustbe€800.

6.Biscorrect.

Beginningretainedearnings$L400

+Netincome200

-Distributionstoowners(100)

=Endingretainedearnings$1,500

7.Ciscorrect.

Assets=Liabilities+Contributedcapital+Beginningretainedearnings-Distributionstoowners+

Revenues-Expenses

Liabilities$1,000

+Contributedcapital500

+Beginningretainedearnings600

-Distributionstoowners(0)

+Revenues5,000

-Expenses(4,300)

=Assets$2,800

8.Ciscorrect.Thisisacontributionofcapitalbytheowners.AssetswouldIincreaseby$500,000and

contributedcapitalwouldincreaseby$500,000,maintainingthebalanceoftheaccountingequation.

9.Aiscorrect.ThepaymentofJanuaryrentrepresentsprepaidrent(anasset)whichwillbeadjustedat

theendofJanuarytorecordrentexpense.Cash(anasset)decreasesby$12,000.Deposits(an

asset)increasebyS4.000.Prepaidrent(anasset)increasesby$8,000.Thereisnonetchangein

assets.

10.Biscorrect.Thesaleofproductswithoutreceiptofcashresultsinanincreaseinaccounts

receivable(anasset)of€10,000.Thebalanceininventory(anasset)decreasesby€8,000.Thenet

increaseinassetsis€2,000.Thiswouldbebalancedbyanincreaseinrevenueof€10,000andan

increaseinexpenses(costsofgoodssold)of€8,000.

11.Ciscorrect.Thereceiptofcashinadvanceofdeliveringgoodsorservicesresultsinunearned

revenue,whichisaliability.Thecompanyhasanobligationtodeliver$30,000ingoodsinthe

future.Thisbalancestheincreaseincash(anasset)of$30,000.

12.Biscorrect.Depreciationisanexpenseandincreasesaccumulateddepreciation.Accumulated

depreciationisacontraaccountwhichreducespropertyplant,andequipment(anasset)by

€250,000.Assetsdecreaseby€250.000andexpensesincreaseby€250,000.

13.Aiscorrect.Thebalancesheetshowsthefinancialpositionofacompanyataparticularpointin

time.Thebalancesheetisalsoknownasa"statementoffinancialposition."

14.Biscorrect.Thethreesectionsofthestatementofcashflowsareoperating,investing,and

financingactivities.

5

15.Ciscorrect.Cashreceivedpriortorevenuerecognitionincreasescashanddeferredorunearned

revenue.Thisisaliabilityuntilthecompanyprovidesthepromisedgoodsorservices.

16.Aiscorrect.Whencashistobereceivedafterrevenuehasbeenrecognizedbutnobillinghas

actuallyoccurred,anunbilled(accrued)revenueisrecorded.Suchaccrualswouldusuallyoccur

whenanaccountingperiodendspriortoacompanybillingitscustomer.Thistypeofaccrualcanbe

contrastedwithasimplecreditsale,whichisreflectedasanincreaseinrevenueandanincreasein

accountsreceivable.Noaccrualisnecessary.

17.Biscorrect.Paymentofexpensesinadvanceiscalledaprepaidexpensewhichisclassifiedasan

asset.

18.Cjscorrect.Whenanexpenseisincurredandnocashhasbeenpaid,expensesareincreasedanda

liability(Maccruedexpense11)isestablishedforthesameamount.

19.Biscorrect.Thegeneralledgeristhecollectionofallbusinesstransactionssortedbyaccountinan

accountingsystem.Thegeneraljournalisthecollectionofallbusinessactivitiessortedbydate.

20.Ciscorrect.Inordertobalancetheaccountingequationthecompanywouldeitherneedtoincrease

assetsordecreaseliabilities.Creatingafictitiousasseswouldbeonewayofattemptingtocoverup

thefraud.

Reading24.FinancialReportingStandards試題整理

1.Whichofthefollowingismostlikelynotanobjectiveoffinancialstatements?

A.Toprovideinfbnnationabouttheperformanceofanentity.

B.Toprovideinformationaboutthefinancialpositionofanentity.

C.Toprovideinformationabouttheusersofanentity'sfinancialstatements.

2.Internationalfinancialreportingstandardsarecurrentlydevelopedbywhichentity?

A.TheIFRSFoundation.

B.TheInternationalAccountingStandardsBoard.

C.TheInternationalOrganizationofSecuritiesCommissions.

3?U.S.generallyacceptedaccountingprinciplesarecurrentlydevelopedbywhichentity?

A.TheSecuritiesandExchangeCommission.

B.TheFinancialAccountingStandardsBoard.

C.ThePublicCompanyAccountingOversightBoard.

4.Whichofthefollowingstatementsaboutdesirableattributesofaccountingstandardsboardsismost

accurate?Accountingstandardsboardsshould:

A.concedetopoliticalpressures.

B.beguidedbyawellarticulatedframework.

C.beadequatelyfundedbycompaniestowhichthestandardsapply.

5.AcoreobjectiveoftheInternationalOrganizationofSecuritiesCommissionsisto:

A.eliminatesystematicrisk.

B.protectusersoffinancialstatements.

C.ensurethatmarketsarefair,efficientandtransparent.

6.AccordingtotheConceptualFrameworkforFinancialReporting(2010),whichofthefollowingis

notanenhancingqualitativecharacteristicofinformationifinancialstatements?

A.Accuracy.

BTimeliness.

C.Comparability.

6

7.WhichofthefollowingisnotaconstraintonthefinancialstatementsaccordingtotheConceptual

Framework(2010)?

A.Understandability.

B.Benefitversuscost.

C.Balancingofqualitativecharacteristics.

8.Theassumptionthatanentitywillcontinuetooperatefortheforeseeablefutureiscalled:

A.accrualbasis.

B.comparability.

C.goingconcern.

9.Theassumptionthattheeffectsoftransactionsandothereventsarerecognizedwhentheyoccur,not

whenthecashflowsoccur,iscalled:

A.relevance.

B.accrualbasis.

C.goingconcern.

10,Neutralityofinformationinthefinancialstatementsmostcloselycontributestowhichqualitative

characteristic?

A.Relevance.

B.Understandability.

C.Faithfulrepresentation.

11.Valuingassetsattheamountofcashorequivalentspaidorthefairvalueoftheconsiderationgiven

toacquirethematthetimeofacquisitionmostcloselydescribeswhichmeasurementoffinancial

statementelements?

A.Currentcost.

B.Historicalcost.

C.Realizablevalue.

12.Thevaluationtechniqueunderwhichassetsarerecordedattheamountthatwouldbereceivedin

anorderlydisposalis:

A.currentcost.

B.presentvalue.

C.realizablevalue.

13.WhichofthefollowingisnotarequiredfinancialstatementaccordingtoIASNo.1?

A.Statementoffinancialposition.

B.Statementofchangesinincome.

C.Statementofcomprehensiveincome.

14.Whichofthefollowingelementsoffinancialstatementsismostcloselyrelatedtomeasurementof

performance?

A.Assets.

B.Expenses.

C.Liabilities.

15.Whichofthefollowingelementsoffinancialstatementsismostcloselyrelatedtomeasurementof

financialposition?

A.Equity.

B.Income.

C.Expenses.

7

16.Whichofthefollowingisnotacharacteristicofacoherentfinancialreportingframework?

A.Timeliness.

B.Consistency.

C.Transparency.

17?Whichofthefollowingisnotarecognizedapproachtostandard-setting?

A.Arules-basedapproach.

B.Anasset/liabilityapproach.

C.Aprinciples-basedapproach.

18.Whichofthefollowingdisclosuresregardingnewaccountingstandardsprovidesthemost

meaningfulinformationtoananalyst?

A.Theimpactofadoptionisdiscussed.

B.Thestandardwillhavenomaterialimpact.

C.Managementisstillevaluatingtheimpact.

Reading24.FinancialReportingStandards試題答案整理

Solutions

1.Ciscorrect.Financialstatementsprovideinformation,includinginformationabouttheentity's

financialposition,performance,andchangesinfinancialposition,tousers.Theydonottypically

provideinformationaboutusers.

2.Biscorrect.TheIASBiscurrentlychargedwithdevelopingInternationalFinancialReporting

Standards.

3.Biscorrect.TheFASBisresponsiblefortheAccountingStandardsCodificationthesinglesourceof

nongovernmentalauthoritativeU.S.generallyacceptedaccountingprinciples.

4.Biscorrect.Accountingstandardsboardsshouldbeguidedbyawellarticulatedframework.They

shouldbeindependent;andwhiletheyconsiderinputfromstakeholders,theprocessshouldnotbe

compromisedbypressurefromexternalforces,includingpoliticalpressure.Accountingstandards

boardsshouldhaveadequateresources.

5.Ciscorrect.AcoreobjectiveofIOSCOistoensurethatmarketsarefair,efficient,andtransparent.

Theothercoreobjectivesaretoreduce,noteliminate,systematicriskandtoprotectinvestors,notall

usersoffinancialstatements.

6.Aiscorrect.Accuracyisnotanenhancingqualitativecharacteristic.Faithfulrepresentation,not

accuracyisafundamentalqualitativecharacteristic.

7.Aiscorrect.Understandabi1ityisanenhancingqualitativecharacteristicoffinancialinformation-not

aconstraint.

8.Ciscorrect.TheConceptualFramework(2010)identifiestwoimportantunderlyingassumptionsof

financialstatements:accrualbasisandgoingconcern.Goingconcernistheassumptionthatthe

entitywillcontinuetooperatefbrtheforeseeablefuture.Enterpriseswiththeintenttoliquidateor

materiallycurtailoperationswouldrequiredifferentinformationfbrafairpresentation.

9.Biscorrect.Accrualbasisreflectstheeffectsoftransactionsandothereventsbeingrecognized

whentheyoccur,notwhenthecashflows.Theseeffectsarerecordedandreportedinthefinancial

statementsoftheperiodstowhichtheyrelate.

10.Ciscorrect.Thefundamentalqualitativecharacteristicoffaithfulrepresentationiscontributedto

bycompleteness,neutrality,andfreedomfromerror.

11.Biscorrect.Historicalcostismeconsiderationpaidtoacquireanasset.

8

12.Ciscorrect.Theamountthatwouldbereceivedinanorderlydisposalisrealizablevalue.

13.Biscorrect.Thereisnostatementofchangesinincome.UnderIASNo.1,acompletesetof

financialstatementsincludesastatementoffinancialposition,astatementofcomprehensive

income,astatementofchangesinequity,astatementofcashflows,andnotescomprisinga

summaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

14.Biscorrect.Theelementsoffinancialstatementsrelatedtothemeasureofperformancearcincome

andexpenses.

15.Aiscorrect.Theelementsoffinancialstatementsrelatedtothemeasurementoffinancialposition

areassets,liabilities,andequity.

16.Aiscorrect.Timelinessisnotacharacteristicofacoherentfinancialreportingframework.

Consistency,transparency,andcomprehensivenessarecharacteristicsofacoherentfinancial

reportingframework.

17.Biscorrect.Rules-based,principles-based,andobjectives-orientedapproachesarerecognized

approachestostandard-setting.

iscorrect.Adiscussionoftheimpactwouldbethemostmeaningful,althoughBwouldalsobe

useful.

StudySession8

FinancialReportingandAnalysis

Reading25.UnderstandingIncomeStatements試題整理

PRACTICEPROBLEMS

1.Expensesontheincomestatementmaybegroupedby:

A.nature,butnotbyfunction.

B.function,butnotbynature.

C.eitherfunctionornature.

2.Anexampleofanexpenseclassificationbyfunctionis:

A.taxexpense.

B.interestexpense.

C.costofgoodssold.

3.DenaliLimited,amanufacturingcompany,hadthefollowingincomestatementinformation:

Revenue$4,000,000

Costofgoodssold$3.000,000

Otheroperatingexpenses$500,000

Interestexpense$100,000

Taxexpense$120,000

Denali'sgrossprofitisequalto

A.$280,000.

B.$500,000.

C.$1,000,000.

4.UnderIFRS,incomeincludesincreasesineconomicbenefitsfrom:

A.increasesinliabilitiesnotrelatedtoowners'contributions.

B.enhancementsofassetsnotrelatedtoowners'contributions.

C.increasesinowners*equityrelatedtoowners*contributions.

9

5?Fairplayhadthefollowinginformationrelatedtothesaleofitsproductsduring2009,whichwasits

firstyearofbusiness:

Revenue$1,000,000

ReturnsofgoodssoldSI00,000

CashcollectedS800,000

Costofgoodssold$700,000

Undertheaccrualbasisofaccounting,howmuchnetrevenuewouldbereportedonFairplayts

2009incomestatement?

A.$200,000.

B.$900,000.

C.$1,000,000.

6.Iftheoutcomeofalong-termcontractcanbemeasuredreliably.thepreferredaccountingmethod

underbothIFRSandU.S.GAAPis:

A.thecostrecoverymethod.

B.thecompletedcontractmethod.

C.thepercentage-of-completionmethod.

7.Atthebeginningof2009,FloridaRoadConstructionenteredintoacontracttobuildaroadforthe

government.Constructionwilltakefouryears.Thefollowinginformationasof31December2009is

availableforthecontract:

Totalrevenueaccordingtocontract$10,000,000

Totalexpectedcost$8,000,000

Costincurredduring2009$1,200,000

Assumethatthecompanyestimatespercentagecompletebasedoncostsincurredasapercentageof

totalestimatedcosts.Underthecompletedcontractmethod,howmuchrevenuewillbereportedin

2009?

A.None.

B.$300,000.

C.$1,500,000.

8.During2009,ArgoCompanysold10acresofprimecommercialzonedlandtoabuilderfor

$5,000,000.ThebuildergaveArgoa$1,000,000downpaymentandwillpaytheremainingbalance

of$4000,000toArgoin2010.Argopurchasedthelandin2002for$2,000,000.Usingthe

installmentmethod,howmuchprofitwillArgoreportfbr2009?

A.$600,000.

B.$1,000,000.

C.$3,000,000.

9.UsingthesameinformationasinQuestion8,howmuchprofitwillArgoreportfbr2009usingthe

costrecoverymethod?

A.None.

B.$600,000.

C.$1,000,000.

10?UnderIFRS.revenuefrombartertransactionsshouldbemeasuredbasedonthefairvalueof

revenuefrom:

A.similarbartertransactionswithunrelatedparties.

10

B.similarnon-bartertransactionswithrelatedparties.

C.similarnon-bartertransactionswithunrelatedparties.

11.ApexConsignmentsellsitemsovertheinternetfbrindividualsonaconsignmentbasis.Apex

receivestheitemsfromtheowner,liststhemfbrsaleontheinternet,andreceivesa25percent

commissionfbranyitemssold.Apexcollectsthefullamountfromthebuyerandpaysthenet

amountaftercommissiontotheowner.Unsolditemsarereturnedtotheownerafter90days.

During2009,Apexhadthefollowinginformation;

?Totalsalespriceofitemssoldduring2009onconsignmentwas€2,000,000.

?TotalcommissionsretainedbyApexduring2009fbrtheseitemswas€500,000.

HowmuchrevenueshouldApexreportonits2009incomestatement?

A.€500,000.

B.€2,000,000.

C.€1,500,000.

12.During2009,AccentToysPlc.,whichbeganbusinessinOctoberofthatyear,purchased10,000

unitsofatoyatacostof￡10perunitinOctober.ThetoysoldwellinOctober.Inanticipationof

heavyDecembersales,Accentpurchased5,000additionalunitsinNovemberatacostof￡11per

unit.During2009,Accentsold12,000unitsatapriceof￡15perunit.Underthefirstin.Firstout

(FIFO)method,whatisAccenfscostofgoodssoldfor2009?

A.￡120,000.

B.￡122,000.

C.￡124,000.

13.UsingthesameinformationasinQuestion12,whatwouldAccenfscostofgoodssoldbeunder

theweightedaveragecostmethod?

A.￡120,000.

B.￡122,000.

C.￡124,000.

14.WhichinventorymethodisleastlikelytobeusedunderIFRS?

A.Firstin,firstout(FIFO).

B.Lastin,firstout(LIFO).

C.Weightedaverage.

15.Atthebeginningof2009.GlassManufacturingpurchasedanewmachinefbritsassemblylineat

acostof$600,000.Themachinehasanestimatedusefullifeof10yearsandestimatedresidual

valueof$50,000.Underthestraight-linemethod,ho