MGT401 Quiz 3 by VU Sparky

Q1. Under revaluation model, fixed assets such as machinery and building are measured at:

1. Fair Value less Historical cost
2. Historical cost less accumulated depreciation
3. Fair value less accumulated depreciation
4. Historical cost

Q2. Provision for depreciation is an example of which of the following?

1. Debit account
2. Nominal account
3. Contra account
4. Expense account

Q3. Which of the following statement is INCORRECT about debt financing?

1. Raising debt capital is less complicated because the company is not required to comply with state.
2. Except in the case of variable rate loans, principal and interest obligations are known amounts.
3. Lenders have direct claim on future profits of the business.
4. A lender is entitled only to repayment of the agreed-upon principal of the loan plus interest.

Q4. ………..is the removal of a previously recognized financial asset or financial liability from an entity's balance sheet.

1. Revaluation
2. Recognition
3. Realization
4. Derecognition

Q5. Non-financial assets under non-current assets are categorized into:

1. Intangible assets
2. Investment property and other long term assets
3. Property, plant and equipment
4. All of the given options

Q6. Which of the following statement is INCORRECT about equity financing?

1. Shareholders have claim on future profits of the business.
2. Equity involves raising money by selling interests in the company.
3. It represents the value that would be returned to a company's shareholders if all of the assets were liquidated.
4. Raising equity capital is less complicated because the company is not required to comply with state.

Q7. Dividend received during the reporting period is recognized as ………for the year that appears in statement of profit and loss.

1. Asset
2. Expense
3. Income
4. Liability

Q8. In which of the following fixed asset valuation model, the fair value is considered:

1. Present Value model
2. Revaluation model
3. Current Cost Model
4. Cost model

Q9. Property employed in the business administrative purposes is an example of:

1. Non-current liabilities
2. Financial assets
3. Investment property
4. Owner occupied property

Q10. Non-Current Assets are:

1. Intangible Assets
2. All of the above
3. Property Plant & Equipment
4. Investment Property

Q11. Carrying amount of an intangible asset will decrease over the time due to:

1. Decrease in amortization
2. Increase in accumulated amortization
3. Decrease in impairment loss
4. Decrease in demand

Q12. Capitalized research and development cost for next 5 years is to be recorded as:

1. A tangible asset in the balance sheet
2. A deferred expense in the profit and loss account
3. An expense in the profit and loss account
4. An intangible asset in the balance sheet

Q13. Transaction costs are recognized as ….in statement of profit & loss.

1. Expense
2. Income
3. Asset
4. Provision

Q14. Which of the following IAS deals with investment property?

1. IAS 2
2. IAS 7
3. IAS 1
4. IAS 40