Arizona State University ACCOUNTING 405 TEST BANK_IFA PART 1A (REVIEWED BY EXPERTS 2021)- A COMPLETE GUIDE FOR EXAM PREPARATION- GRADED A+

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TABLE OF CONTENTS CHAPTER 1 OVERVIEW OF ACCOUNTING.................................................................1 CHAPTER 1: THEORY OF ACCOUNTS REVIEWER............................................. .....1 CHAPTER 1 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS......27 CHAPTER 2 THE ACCOUNTING PROCESS................................................................28 CHAPTER 2: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ................................................................................................................28 CHAPTER 2: THEORY OF ACCOUNTS REVIEWER............................................31 CHAPTER 2 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS......45 CHAPTER 3 THE CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING.......46 CHAPTER 3: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ................................................................................................................46 CHAPTER 3: THEORY OF ACCOUNTS REVIEWER............................................47 CHAPTER 3 - SUGGESTED ANSWERS TO REVIEW THEORY QUESTIONS...............71 CHAPTER 4 CASH & CASH EQUIVALENTS...............................................................72 CHAPTER 4: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ................................................................................................................72 CHAPTER 4: THEORY OF ACCOUNTS REVIEWER............................................76 CHAPTER 4 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS......87 CHAPTER 5 RECEIVABLES (PART 1).......................................................................88 CHAPTER 5: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ................................................................................................................88 CHAPTER 5: THEORY OF ACCOUNTS REVIEWER............................................92 CHAPTER 5 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS....100 CHAPTER 6 RECEIVABLES (PART 2).....................................................................101 CHAPTER 6: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ..............................................................................................................101 CHAPTER 6: THEORY OF ACCOUNTS REVIEWER..........................................105 CHAPTER 6 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS....110 CHAPTER 7 RECEIVABLES (PART 3).....................................................................111 CHAPTER 7: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ..............................................................................................................111 CHAPTER 7: THEORY OF ACCOUNTS REVIEWER..........................................114 CHAPTER 7 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS....125 CHAPTER 8 INVENTORIES.....................................................................................126 CHAPTER 8: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ..............................................................................................................126 CHAPTER 8: THEORY OF ACCOUNTS REVIEWER..........................................132 CHAPTER 8 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS....149 CHAPTER 9 INVESTMENTS (PART 1)....................................................................150 CHAPTER 9: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ..............................................................................................................150 3CHAPTER 9: THEORY OF ACCOUNTS REVIEWER...........................................153 CHAPTER 9 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS....168 CHAPTER 10 INVESTMENTS (PART 2)....................................................................169 CHAPTER 10: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ..............................................................................................................169 CHAPTER 10: THEORY OF ACCOUNTS REVIEWER........................................175 CHAPTER 10 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS. .185 CHAPTER 11 INVESTMENTS (PART 3)....................................................................186 CHAPTER 11: MULTIPLE CHOICE – COMPUTATIONAL (SET B) – (FOR CLASSROOM INSTRUCTION PURPOSES) ..............................................................................................................186 CHAPTER 11: THEORY OF ACCOUNTS REVIEWER........................................187 CHAPTER 11 - SUGGESTED ANSWERS TO THEORY OF ACCOUNTS QUESTIONS. .188 4Chapter 1 Overview of Accounting Chapter 1: Theory of Accounts Reviewer Definition of Accounting 1. Accounting has been given various definitions, which of the following is not one of those definitions a. Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions. b. Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part of at least, of a financial character and interpreting the results thereof. c. Accounting is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between these assertions and established criteria and communicating the results to interested users. d. Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of information. 2. It is the first process used in accounting. It refers to the identification of events as to whether they are recognized or not in the financial statements. a. Identifying b. Measuring c. Communicating d. Auditing 3. The following statements correctly refer to the accounting process. I. Measuring is the accounting process of analyzing business activities as to whether or not they will be recognized in the books. II. Recognition refers to the process of including the effects of an event in the totals of the statement of financial position or the statement of profit or loss and other comprehensive income through memo entries. III. Disclosure of events in the notes to financial statement without including in the totals of the statement of financial position or statement of profit or loss and other comprehensive income is not an application of the recognition principle. IV. An accountable event is an event that has an effect on the assets, liabilities or equity of an entity and its effect can be measured reliably. V. Sociological and psychological matters are within the scope of accounting. a. I, II, III, IV, V b. I, II, III, IV c. IV d. III, IV Types of Events 4. These events involve changes in the economic resources or obligations of entities involving other entities but do not involve transfers of resources or obligations a. External events c. External events other than transfers b. Non-reciprocal transfers d. Internal events 5. Events involving an entity and an external party. a. External events c. External events other than transfers b. Non-reciprocal transfers d. Internal events 6. Events in which an entity transfers (or receives) economic resources to (from) another entity without directly receiving (or giving) value in exchange. [Show More]

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