Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 11, Problem 17P
To determine
Identify the appropriate answer for the given statement from the options provided
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MCQ: Choose only the correct answer
Which of the following statements is false?
(a) Financial Instruments are intangible assets
(b) Goodwill is not amortizable
(c) Goodwill can be identified only in business combination situation
(d) Straightline method is generally used to calculate amortazation
Which of the following will not be considered while calculating the depletion base?
(a) Acquisition costs
(b) Tangible development costs
(c) Restoration Costs
(d) Intangible development costs
Which of the following will not be included into the the original cost of a land?
(a) Legal fees
(b) Brokers' commision
(c) Property taxes
(D) Accrued property taxes of previous owner
The journal entry to record the transportation cost paid by the purchaser under periodic inventory system is-
(a) Inventory Dr. and Cash Cr.
(b) Transportation-in Dr. & Cash Cr.
(c) Delivery Expense Dr. & Cash Cr.
(d) Transportation-Out Dr. & Cash Cr.
In case of change in estimate of useful life for a tangible…
Fair Value Accounting and Valuation in 3 Steps:
Asset or Liability Identification:
The first step involves identifying the specific assets or liabilities that will be measured at fair value. This could include financial instruments, tangible assets, intangible assets, or other items on the balance sheet.
Market-Based Valuation Techniques:
Fair value is determined using market-based valuation techniques. This may involve assessing current market prices, recent transactions, or employing valuation models such as discounted cash flows, comparable sales, or option pricing models.
Consistent Application and Disclosure:
Fair value accounting requires consistent application of valuation methods across reporting periods. Additionally, transparency and disclosure are crucial, with companies providing detailed information about the inputs, assumptions, and methods used in fair value measurements.
Objective Type Question:
In fair value accounting, what is the primary purpose of…
How does the depreciation accounting enable the firm to stabilize the statements of financial position that it distributes to the stakeholders?
Chapter 11 Solutions
Advanced Accounting
Ch. 11 - Historically, what factors contributed to the...Ch. 11 - Nestl S.A. is a very large company headquartered...Ch. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 10QCh. 11 - Prob. 11QCh. 11 - Prob. 12QCh. 11 - What are the two extreme approaches that a company...Ch. 11 - Prob. 14QCh. 11 - Prob. 15Q
Ch. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 18QCh. 11 - Prob. 19QCh. 11 - Prob. 20QCh. 11 - Even if all companies in the world were to use...Ch. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Which of the following is not a reason for...Ch. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Which of the following statements is true for a...Ch. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17P
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- Choose the letter that corresponds to the answers.arrow_forward1. The following are the possible methods of measuring assets and liabilities other than historical cost: I) Current Cost, II) Realisable Value, III) Present Value IV) Replacement Cost. According to IASB’s Conceptual framework for financial reporting which of the measurement bases above can be used by an entity for measuring assets and liabilities shown in its statement of financial position. a. I and II only b. II and II only c. I, II and III only d. All four methodsarrow_forwardWhat provides the framework for conducting return on assets (ROA) analysis by incorporating revenues and expenses to generate net profit margin, as well as inclusion of assets to measure asset turnover?arrow_forward
- Choose the letter of the correct answer.arrow_forwardCompanies that use IFRS: a. must report all their assets on the statement of financial position (balance sheet) at fair value. b. may report property, plant, and equipment and natural resources at fair value. c. may not use a mixed-attribute system for its balance sheet. d. may only use historical cost as the measurement basis in financial reporting.arrow_forwardWhich of the following is not a part of the impairment test of equipment under IFRS? Group of answer choices determine the fair value of the cash-generating unit without the asset determine the discounted value of the future cash flows expected to be derived from the asset determine the asset's fair value less costs to dispose determine the asset's carrying valuearrow_forward
- 19. Which of the following is an appropriate cost approach for determining fair value a. Using relevant information from recent transactions. b. Using present value techniques to discount cash flows. measurements? c. Using the current replacement cost of the asset. d. Using the undiscounted cash flows from the asset. 20. Which of the following concerning inputs used in determination of fair value is/are correct? 1. Only observable inputs can be used. II. Inputs that incorporate the entity's assumptions may be used. a. I only. b. Il only. c. Both I and II. d. Neither I nor II **Please provide all computations and explanations. Thank you!!arrow_forwardAnswer the following questions in depth .... Why do accountants have to classify items as capital or revenue expenditures? Why do you treat exchanges of similar and dissimilar assets differently? Aren't they all exchanges? Is it true that the higher the depreciation, the lower the net income? If that is the case, why would we not want the lowest depreciation method so we can show the highest net income? Why do we have various methods of depreciation? Isn't that encouraging misleading results?arrow_forward(Assumptions, Principles, and Constraint) Presented below are a number of operational guidelines and practices that have developed over time. Select the assumption, principle or constraint that most appropriately justifies these procedures and practices. A.) All significant post-balance sheet events are reported B.) Intangibles are capitalized and amortized over periods benefitted C.) Price -level chances are not recognized in the accounting records D.) Brokerage firms use market value for purposes of valuation of all marketable securities E.) Financial information is presented so that reasonably prudent investors will not be misled F.) Lower-of-cost-or-net realizable value is used to value inventories G.) Each enterprise is kept as a unit distinct from its owner or owners H.) All important aspects of bon indentures are presented in financial statements I.) Revenue is recorded when the performance obligation is satisfied J.) a company charges its sales commission costs to expense K.)…arrow_forward
- 11. The valuation of assets in the balance sheet is based primarily upon: What it would cost to replace the assets. Cost, because cost is usually factual and verifiable. Current fair market value as established by independent appraisers. Cost, because in the event of liquidation, the assets would be sold at an amount equal to their original cost. 12. Which one of the following equations correctly expresses the relationship between assets (A), liabilities (L), revenues (R), expenses (E) and capital (C)? (a) A = L + R + E + C (b) A = C + L + (R-E) (c) A = C - (R - E) + L (d) A = (L - C) + (R - E) 13. Which of the following would be added to net income using the indirect method? An increase in accounts receivable An increase in prepaid expenses Depreciation expense A decrease in accounts payable 14. Unpaid expenses may be included as an expense on the income statement. True False…arrow_forwardHow can the quality of financial statements be compromised? Discuss fully and explain, giving a numerical example, how the choice of a depreciation method can influence the accuracy of reportable earnings.arrow_forwardHow does PFRS 9 distinguish between the measurement methods to be used in the standard? * By reviewing the business model of each entity and the contractual cash flow characteristics of the instrument By reviewing the realisability of the instrument and risks and rewards of ownership By reviewing the realisability and the contractual cash flow characteristics of the instrument By reviewing the business model of each entity and the risks and rewards of the transactionarrow_forward
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