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Multiple Choice 1. Use rights assets can be increased due to a. Lease payments made on...

Multiple Choice


1. Use rights assets can be increased due to

a. Lease payments made on or before the inception of the lease

b. Rental payments made on or before the start of the lease by the tenant and direct costs borne by the lessee

c. Initial direct costs are borne by the tenant

d. Rent incentives received by tenants

2. A summary statement of the company's financial position as of December 31, 2020, reveals the following: Plant (at cost) $ 500,000. Less Accumulated Depreciation 300,000 = $ 200,000. As of December 31, 2021. The company assesses the fair value of the factory to be $ 350,000. And as of December 31, 2022, the factory's carrying value is $ 250,000. The depreciation rate is 10% pa using the straight-line method. The accounting records required to record factory revaluation (excluding tax effects) as of December 31, 2021, in accordance with PSAK 16 or IAS 16 Property, Plant, and Equipment are as follows:

a. (Dr) Accumulated depreciation - Plant 300,000; (Cr) Plant 300,000. Then (Dr) Plant 150,000; (Cr) Gain on revaluation - OCI 150,000

b. (Dr) Plant 150,000; (Cr) Gain on revaluation - OCI 150,000

c. (Dr) Gain on revaluation - OCI 150,000; (Cr) Asset revaluation surplus of 150,000

d. (Dr) Plant 150,000, (Dr) 150,000; (Cr) Accumulated depreciation - Plant 300,000

3. Which of the following is an advantage of using the weighted average method in applying costs to inventories. I. Not subject to profit manipulation, II. Profit and closing inventory values tend to be 'flattened' compared to other methods; and III. Easy to understand

a. I and III only

b. II and III only

c. I, II, and III

d. I and II only

4. Which of the following statements regarding the periodic inventory system is wrong?

a. The inventory account is classified as non-current assets

b. Purchases of inventory are recorded in the Purchases account

c. The balance in the Inventory account represents the cost of inventories that exist at the beginning of the period

d. An inventory must be carried out to determine the ending inventory balance

5. At the reporting date, the carrying value of the cash-generating unit has been reduced by CU800. The unit includes the following assets: CU 4000 land; CU 3000 factory building; Goodwill CU 1000. The carrying amount of goodwill after the allocated impairment value is:

a. CU 200

b. CU 0

c. CU 1000

d. CU 900

Business   Accounting   
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Homework Answers

Answer #1
Answer 1.
The Correct Option is D
Rent incentives received by tenants
Because when tenants gets the rent incentves it increases the use of right assets.
Answer 2.
The Correct Option is B
(Dr) Plant 150,000 : (Cr) Gain on revaluation OCI 150,000
Plant is revalued from carrying amount 2,00,000 to 3,50,000 then plant will be debited by 1,50,000 and gain on revaluation credited by 1,50,000.
Answer 3.
The Correct Option is C
I, II and III
Because weighted average method of inventory is simple, flat as well as easy to use.
Answer 4.
The Correct Option is A
The inventory account is classified as non- current assets.
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