Ca_exm_fa1_2003-12 - CGA-CANADA FINANCIAL ACCOUNTING 1 EXAMINATION December 2003 Marks 9 Time 3 Hours Question 1 Select the best answer for each of

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CGA-CANADA FINANCIAL ACCOUNTING 1 EXAMINATION December 2003 Marks Time: 3 Hours 9 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if (1) is the best answer for item (a), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. No account will be taken of any explanations you offer. Note: 1 1 / 2 marks each a. Which of the following statements about inventory losses (inventory shrinkage) is true? 1) Inventory losses can be calculated under a periodic inventory system. 2) Inventory losses can be calculated under a perpetual inventory system. 3) Inventory losses can be calculated under neither a perpetual nor a periodic inventory system. 4) Inventory losses can be calculated under both a perpetual and a periodic inventory system. b. Which of the following statements best describes liabilities? 1) Future obligations for future payments likely to result from future transactions 2) Present obligations for future payments that result from past transactions 3) Past obligations that arose out of past transactions that are paid already 4) Present payments for obligations that might arise from future transactions c. Which of the following statements about a bond issued at a discount is true? 1) The coupon rate of the bond is more than the market rate (yield). 2) The present value of interest payments and that of the face value using a discount rate equal to the market rate will exceed the face value. 3) The interest expense will be more than the cash paid toward interest. 4) The interest expense will be less than the cash paid toward interest. d. Which of the following statements about a bond issued at a premium is true? 1) The coupon rate of the bond is less than the market rate (yield). 2) The present value of the interest payments and that of the face value using a discount rate equal to the market rate will be less than the face value. 3) The interest expense will be more than the cash paid toward interest. 4) The interest expense will be less than the cash paid toward interest. e. Which of the following statements about carrying value is true? 1) The carrying value of a bond equals its face value plus the discount. 2) The carrying value of a bond equals its face value minus the premium. 3) The carrying value of a bond equals its face value minus the discount. 4) The carrying value of a bond is not affected by the discount or premium. Continued. .. EFA1D03 ©CGA Canada, 2003 Page 1 of 8
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f. The use of the allowance for doubtful accounts account is an example of the application of which of the following generally accepted accounting principles? 1) Revenue recognition principle
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This note was uploaded on 05/19/2010 for the course DFDAS 220 taught by Professor Ding during the Fall '10 term at Academy of Art University.

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Ca_exm_fa1_2003-12 - CGA-CANADA FINANCIAL ACCOUNTING 1 EXAMINATION December 2003 Marks 9 Time 3 Hours Question 1 Select the best answer for each of

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