會計審計英語習(xí)題

Part1AccountingPrinciple

Chapter1AccountingandItsEnvironment

QUESTIONS

1.Accountinghasbeendefinedasaserviceactivity.Whoisservedbyaccountingandhoware

theybenefited?

2.WhatarethemajorobjectivesoffinancialreportingasspecifiedbytheIASB?

3.Brieflydescribethefourtraditionalassumptionsthatinfluencetheconceptualframework.

4.IdentifyanddescribetheunderlyingassumptionsspecifiedbytheIASB.

5.AlanRodhasrecentlycompletedhisfirstyearofstudyingaccounting.Hisinstructorfornext

semesterhasindicatedthattheprimaryfocuswillbetheareaoffinancialaccounting.

(a)Differentiatebetweenfinancialaccountingandmanagerialaccounting.

(b)Onepartoffinancialaccountinginvolvesthepreparationoffinancialstatements.Whatare

thefinancialstatementsmostfrequentlyprovided?

(c)Whatisthedifferencebetweenfinancialstatementsandfinancialreporting?

Chapter2AccountingConceptsandPrinciples

QUESTIONS

1.Onecharacteristicofusefulaccountinginformationisunderstandability.Understandableto

whom?

2.Distinguishbetweenthequalitiesofrelevanceandfaithfulpresentation.

3.Doesfaithfulpresentationimplyabsoluteaccuracy?Explain.

4.Definecomparability.

5.Whyisitsodifficulttomeasurethecostandthebenefitofaccountinginformation?

6.Foreachitembelow,indicatetowhichcategoryofelementsoffinancialstatementsitbelongs.

(a)Retainedearnings(b)Sales(c)Additionalpaid-incapital(d)Inventory

(e)Depreciation(f)Dividends(g)Gainonsaleofinvestment(h)Interestpayable

(i)Lossonsaleofequipment(j)Issuanceofcommonstock

7.Whatthreeelementsarecontainedinabalancesheet?

8.Whatarethetwomeasurementmethodsofperformancethatmaybeusedtodetermine

income?Howdotheydiffer?

9.Identifythecriteriathatanitemmustmeettoqualifyforrecognition.

10.Identifyanddescribefourdifferentmeasurementbases.

Chapter3FinancialStatements

QUESTIONS

1.Howdoesseparatingcurrentassetsfromproperty,plant,andequipmentinthebalancesheet

helpanalysts?

2.Shouldavailable-for-salesecuritiesalwaysbereportedasacurrentasset?Explain.

3.Whatistheobjectiveofastatementofchangesinequity?

4.Whatisthepurposeofastatementofcashflows?Howdoesitdifferfromabalancesheet

andanincomestatement?

5.ThenetincomefortheyearforWonLong,Inc.is$750,000,butthestatementofcashflows

reportsthatthecashprovidedbyoperatingactivitiesis$640,000.Whatmightaccountforthe

difference?

6.NetincomefortheyearforJenkins,Inc.was$750,000,butthestatementofcashflows

reportsthatcashprovidedbyoperatingactivitieswas$860,000.Whatmightaccountforthe

difference?

7.Differentiatebetweenoperatingactivities,investingactivities,andfinancingactivities.

EXERCISES

Exercise1.PresentedonthenextpagearethecaptionsofFaulkCompany'sbalancesheet.

(a)Currentassets.(f)Cui'rent1labilities.

(b)Investments.(g)Non-currentliabilities.

(c)Property,plant,andequipment.(h)Capitaistock.

(d)Intangibleassets.(i)Additionalpaid-incapital.

(e)Otherassets.(j)Retainedearnings.

Instructions

Indicatebyletterwhereeachofthefollowingitemswouldbeclassified.

1.Preferredstock.11.Cashsurrendervalueoflifeinsurance.

2.Goodwi11.12.Notespayab1e(duenextyear).

3.Wagespayable.13.Officesupplies.

4.Tradeaccountspayable.14.Commonstock.

5.BuiIdings.15.Land.

6.Tradingsecurities.16.Bondsinkingfund.

7.Currentportionoflong-termdebt.17.Merchandiseinventory.

8.Premiumonbondspayable.18.Prepaidinsurance.

9.Allowancefordoubtfulaccounts.19.Bondspayable.

10.Accountsreceivable.20.Taxespayable.

Exercise2.AssumethatDenisSavedInc.hasthefollowingaccountsattheendofthecurrent

year.

1.CommonStock.14.AccumulatedDepreciation-Buildings.

2.DiscountonBondsPayable.15.CashRestrictedforPlantExpansion.

3.TreasuryStock(atcost).16.LandHeldforFuturePlantSite.

4.NotePayable,short-term.17.AllowanceforDoubtfulAccounts一

5.RawMaterials.AccountsReceivable.

6.PreferredStockInvestments—Long-term.18.RetainedEarnings.

7.UnearnedRentRevenue.19.PremiumonCommonStock.

8.WorkinProcess.20.UnearnedSubscriptionsRevenue.

9.Copyrights.21.Receivables-Officers(dueinoneyear)

10.BuiIdings.22.FinishedGoods.

11.NotesReceivable(short-term).23.AccountsReceivable.

12.Cash.24.BondsPayable(duein4years).

13.AccruedSalariesPayable.

Instructions

Prepareaclassifiedbalancesheetingoodform.(Nomonetaryamountsarenecessary.)

Exercise3.TurnerCorporationhadnetsalesof$2,400,000andinterestrevenueof$31,000

during2015.Expensesfor2015were:costofgoodssold$1,250,000;administrativeexpenses

$212,000;sellingexpenses$280,000;interestexpenseS45,000.Turner'staxrateis30%.The

corporationhad100,000sharesofcommonstockauthorizedand70,000sharesissuedand

outstandingduring2015.

Instructions

Prepareasingle-stepincomestatementandamultiple-stepincomestatementfortheyearended

December31,2015.

Exercise4.Themajorclassificationsofactivitiesreportedinthestatementofcashflowsare

operating,investing,andfinancing.

Thetransactionsareasfollows.

(a)Issuanceofcapitalstock.(h)Paymentofcashdividends.

(b)PurchaseoflandandbuiIding.(i)Exchangeoffurnitureforofficeequipment.

(c)Redemptionofbonds.(j)Purchaseoftreasurystock.

(d)Saleofequipment.(k)Lossonsaleofequipment.

(e)Depreciationofmachinery.(1)Increaseinaccountsreceivableduringtheyear.

(f)Amortizationofpatent.(m)Decreaseinaccountspayab1eduringtheyear.

(g)Issuanceofbondsforplantassets.

Instructions

Classifyeachofthetransactionslistedaboveas:

1.Operatingactivity—addtonetincome.

2.Operatingactivity-deductfromnetincome.

3.Investingactivity.

4.Financingactivity.

5.Reportedassignificantnoncashactivity.

Exercise5.GesCompanyreported2015netincomeof$151,000.During2015,accounts

receivableincreasedby$13,000andaccountspayableincreasedby$9,500.Depreciationexpense

was$39,000.

Instructions

Preparethecashflowsfromoperatingactivitiessectionofthestatementofcashflows.

Exercise6.YorkPerezCorporationengagedinthefollowingcashtransactionsduring2015.

Saleoflandandbuilding$181,000

Purchaseoftreasurystock40,000

Purchaseofland37,000

Paymentofcashdividend85,000

Purchaseofequipment53,000

Issuanceofcommonstock147,000

Retirementofbonds100,000

Instructions

(1)Computethenetcashprovided(used)byinvestingactivities.

(2)Computethenetcashused(provided)byfinancingactivities.

Chapter4TheAccountingCycle

QUESTIONS

1.Underdouble-entryaccounting,whatarethedebit/creditrelationshipsofaccounts?

2.Giveanexampleofatransactionthatresultsin:

(a)Adecreaseinanassetandadecreaseinaliability.

(b)Adecreaseinoneassetandanincreaseinanotherasset.

(c)Adecreaseinoneliabilityandanincreaseinanotherliability.

3.Nametheaccountsdebitedandcreditedfbreachofthefollowingtransactions.

(a)Billingacustomerfbrworkdone.

(b)Receiptofcashfromcustomeronaccount.

(c)Purchaseofofficesuppliesonaccount.

(d)Purchaseof10gallonsofgasolineforthedeliverytruck.

4.Whatareadjustingentriesandwhyaretheynecessary?

5.EmployeesarepaideverySaturdayfortheprecedingworkweek.Ifabalancesheetis

preparedonThursday,December31,whatdoestheamountofwagesearnedduringthefirst

fourdaysoftheweekrepresent?Explain.

6.Givethreecommonexamplesofcontraaccounts.Explainwhycontraaccountsareused.

7.Whatareclosingentriesandwhyaretheynecessary?

EXERCISES

Exercise1.

LydiaServiceShophadthefollowingtransactionsduringthefirstmonthofbusiness.

Aug.2Invested$12,000cashand$2,500ofequipmentinthebusiness.

7Purchasedsuppliesonaccountfor$400,(Debitassetaccount.)

12Performedservicesforclients,forwhich$1,300wascollectedincashand$670was

billedtotheclients.

15PaidAugustrent$600.

19Countedsuppliesanddeterminedthatonly$270ofthesuppliespurchasedonAugust7

arestillonhand.

Instructions

Journalizethetransactions.

Exercise2.

OnJuly1,2015,BlairCo.pays$18,000toBushInsuranceCo.fora3-yearinsurancecontract.

BothcompanieshavefiscalyearsendingDecember31.

Instructions

1.ForBlairCo.journalizetheentryonJuly1andtheadjustingentryonDecember31.

2.JournalizetheentryonJuly1andtheadjustingentryonDecember31forBushInsuranceCo.

BushusestheaccountsUnearnedInsuranceRevenueandInsuranceRevenue.

Exercise3.GreensCo.usesthefollowingaccounttitles:ServiceRevenue,AccountsReceivable,

InterestExpense,InterestPayable,SalariesExpense,SalariesPayable,AllowanceforDoubtful

Accounts,andBadDebtExpense.

Instructions

PreparethefollowingadjustingentriesatDecember31forGreens.

(a)Interestonnotespayableof$400isaccrued.

(b)Feesearnedbutunbilledtotal$1,400.

(c)Salariesearnedbyemployeesof$700havenotbeenrecorded.

(d)Baddebtexpenseforyearis$900.

Exercise4.Sparkiehasyear-endaccountbalancesofSales$828,900;InterestRevenue$13,500;

CostofGoodsSold$556,200;OperatingExpenses$189,000;IncomeTaxExpense$35,100;and

Dividends$18,900.

Instructions

Preparetheyear-endclosingentries.

Exercise5.ThejournalentriesbelowaresubtractedfromMar'sbook.

1Cash400

AccountsReceivable400

2AccountsPayable100

Inventory100

3Cash7,000

LoanPayable7,000

4Cash200

AccountsReceivable700

Sales900

CostofGoodsSold600

Inventory600

5PrepaidInsurance200

Cash200

6Wagespayable130

WagesExpense75

Cash205

Instructions

Foreachofthejournalentriesabove,writeadescriptionoftheunderlyingevent.

Part2FinancialAccounting

Chapter5CurrentAssets

QUESTIONS

1.Describethemethodsfbrestablishingandmaintaininganallowanceforbaddebtsaccount?

2.Inaccountingforuncollectibleaccountsreceivable,whyistheallowancemethod,ratherthan

thedirectwrite-offmethod,requiredbyIFRS?

3.Whyiscashonhandbothnecessaryandyetpotentiallyunproductive?

4.Giveatleastfourcommonsourcesofdifferencesbetweenthebalanceonthebankstatement

andthebalanceinthecashbook?

5.Whatarethemajoradvantagesinusingpettycashfunds?

6.GeneralMotors'finishedgoodsinventoryiscomposedprimarilyofautomobiles.Are

automobilesalwaysclassifiedas“inventory“onthestatementsoffinancialpositionofall

companies?Explain.

7.Whichbettermatchesthenormalphysicalflowofgoods一FIFOorLIFO?Whichbetter

matchescurrentcostsandcurrentrevenues?

8.WhyareLIFOandaveragecostmorecomplicatedwithaperpetualinventorysystemthan

withaperiodicsystem?

9.Whatdifferencesresultfromapplyinglowerofcostornetrealizablevaluetoindividual

inventoryitemsinsteadoftotheinventoryasawhole?

10.Supposeacompanyhasfouritemsofinventoryonhandattheendofitsaccountingperiod.

TheircostandNRVsareasfollows

InventoryitemCostNRV

1$27$32

2148

34355

42940

Determinethevalueofinventoryonthestatementoffinancialposition.

11.Whatamountwillbeincludedin“cashandcashequivalents”？

Investmentinsharesofapubliccompany$12000

Treasurybillsmaturingin30days18000

Bondsofapubliclytradedcompany10000

Two-monthU.S.dollartermdeposits24000

12.PhilipCorpreportedcreditsalesof$240000andwrite-offsofbaddebtsof$57000forlast

year.Accountsreceivablehadabalanceof$1127000atthebeginningoftheyearand$881

()00attheendoftheyear.Howmuchcashwascollectedfromcustomersduringtheyear?

13.LeeLimitedbeganoperationsonJanuary1,2011.Thefollowingdatarelatetothecompany's

first2yearsinbusiness:

InventoryReportedAmountCorrectAmount

December31,20112500020000

December31,20123500030000

Costofgoodssold

For2011400000??

For2012450000??

Whatisthecorrectcostofgoodssoldfor2012?

14.Explainhowamanufacturingcompanycanmanipulateearningsbyincludingnon-production

costsininventories.

EXERCISE

Exercise1.AccountsreceivableofMagilyCompanyonDecember31,2012,hadabalanceof

$300OOO.AllowanceforBadDebtshada$4200debitbalance.Salesin2012were$1690000

lesssalesdiscountsof$14000.

Instructions

GivetheadjustingentryforestimatedBadDebtExpenseunderthefollowingindependent

assumptions.

1.Of2012netsales,1.5%willprobablyneverbecollected.

2.Ofoutstandingaccountsreceivable,3%aredoubtful.

3.Anagingscheduleshowsthat$11000oftheoutstandingaccountsreceivablearedoubtful.

Exercise2.TheaccountingdepartmentsuppliedthefollowingdatainrecordingtheSeptember30

bankstatementforRytton,Inc.

Closingcashbalanceperbankstatement$15496.91

Closingcashbalancepercashbook14692.71

Depositsintransit2615.23

Bankservicecharge25.00

Outstandingchecks3079.51

Notecollectedbybankincluding$45interest(Ryttonnotyetnotified)1045.00

Errorbybank-checkdrawnbyRyttenCorp.waschargedtoRytton's617.08

account

Asaleanddepositof$1729.00wasenteredinthesalesjournalandcashreceiptsjournalas$1

792.00.

Instructions

PreparetheSeptember30bankreconciliation.

Exercise3.PomegraniteCompany'sbankbalanceonitsOctober31,2012bankstatementis

$11500.Pomegranite'saccountantispreparingabankreconciliationanddeterminedthatthree

checksissuedbyPomegranitetoitssuppliersforatotalof$6,500hadnotyetclearedthebank.

Also,adepositfor$700madebyPomegraniteonOctober31didnotappearonthebankstatement.

Bankservicechargesof$240appearonthebankstatement,buthavenotyetbeenrecordedinthe

cashbook.

Instructions

Giventheaboveinformation,prepareabankreconciliationtodeterminethecorrectcashbalance

thatshouldbereflectedinPomegranite'scashbookatOctober31,2012.

Exercise4.TheWebStoreshowsthefollowinginformationrelatingtooneofitsproducts.

Inventory,January1300units@$17.50

Sales,January8200units

Purchases,January10900units@$18.00

Sales,January18800units

Purchases,January201200units@$19.50

Sales,January251000units

Instructions

Whatarethevaluesofclosinginventoryunderaperiodicinventorysystemassuminga(1)FIFO,

(2)LIFOand(3)averagecostflow?(Roundunitcostto3decimalplaces.)

Exercise5.RichyCorporationhadthefollowingtransactionsrelatingtoProductAduring

September.

DateUnitsUnitcost

September1Openingbalance500$5.00

6Purchase1004.50

12Sale300

13Sale200

18Purchase2006.00

20Purchase2004.00

25Sale200

Instructions

Determinetheclosinginventoryvalueunderaperpetualinventorysystemwitheachofthe

followingcostingmethods:

1.FIFO

2.LIFO

Exercise6.Thefollowingfiguresrelatetoinventoryheldattheyearend.

ABC

cost$20$9$12

Sellingprice301222

Modificationcosttoenablesale-28

Marketingcosts722

Unitsheld200150300

Instructions

Determinethevalueofinventoryheldonthestatementoffinancialposition.

Chapter6Investments,PlantAssetsandIntangibles

QUESTIONS

1.Whymightacompanyinvestinthesecuritiesofanothercompany?

2.Comparethefairvalueandequitymethodsofaccountingforinvestmentsinshares

subsequenttoacquisition?

3.Whatcriteriamustbemetforasecuritytobeclassifiedasatradingsecurity?

4.GiftCorp,decidestoconstructabuildingforitselfandplanstouseexistingplantfacilitiesto

assistwithsuchconstruction.Whatcostswillenterintothecostofconstruction?

5.Whattypeofactivitiesisconsideredtoberesearchanddevelopmentactivities?

6.UndertheprovisionsofIAS16,whatisthecreditentrywhennoncurrentoperatingassetsare

writtenuptoreflectanincreaseinmarketvalue?

7.Distinguishamongdepreciationandamortizationexpenses.

8.Whatfactorsdeterminetheperiodandmethodforamortizingintangibleassets?

9.BearCo.purchased$500000ofbondsatpar.Bearmanagementhasanactivetrading

businessmodelforthisinvestment.AtDecember31,Bearreceivedannualinterestof$20

000,andthefairvalueofthebondswas$470400.InBearCo/syear-endstatementof

financialpositionwhatamountwillbereportedforthebondinvestmentandhowmuchtotal

income/losswillbereportedonitsincomestatement?

10.PattonCompanypurchased$400,000of10%bondsofScottCo.onJanuary1,2011,paying

$376100.ThebondsmatureJanuary1,2021;interestispayableeachJuly1andJanuary1.

Thediscountof$23900providesaneffectiveyieldof11%.PattonCompanyusesthe

effective-interestmethodandholdsthesebondsforcollection.Whatinterestrevenueshould

PattonCompanyreportfromtheScottCo.bondsfortheyearendedDecember31,2011?

11.MiniCorp,acquiresapatentfromMaxiCo.inexchangefor2500sharesofMiniCorp/sS5

parvalueordinarysharesand$75000cash.WhenthepatentwasinitiallyissuedtoMaxiCo.,

MiniCorp.'ssharesweresellingat$7.50pershare.WhenMiniCorp.acquiredthepatent,its

sharesweresellingfor$9ashare.WhatamountshouldMiniCorp,recordforthepatent?

12.InJanuary,2006,FindleyCorporationpurchasedapatentforanewconsumerproductfor

$720000.Atthetimeofpurchase,thepatentwasvalidforfifteenyears.Duetothe

competitivenatureoftheproduct,however,thepatentwasestimatedtohaveausefullifeof

onlytenyears.During2011theproductwaspermanentlyremovedfromthemarketunder

governmentalorderbecauseofapotentialhealthhazardpresentintheproduct.Whatamount

shouldFindleychargetoexpenseduring2011,assumingamortizationisrecordedattheend

ofeachyear?

13.During2010,NollerCo.soldequipmentthathadcost$98000for$58800.Thisresultedina

gainof$4300.ThebalanceinAccumulatedDepreciation—Equipmentwas$325000on

January1,2010,and$310000onDecember31.Nootherequipmentwasdisposedofduring

2010.WhatwastheDepreciationexpensefor2010?

14.OnJanuaryI,2011,WoonInc.purchasedequipmentwithacostofHK$4668000auseful

lifeof12yearsandnosalvagevalue.Thecompanyusesstraight-linedepreciation.At

December31,2011,thecompanydeterminesthatimpairmentindicatorsarepresent.Thefair

valuelesscosttoselltheassetisestimatedtobeHk$4620000.Theassefsvalue-in-useis

estimatedtobeHK$4305000.Thereisnochangeintheasset'susefullifeorsalvagevalue.

WhatisLossonImpairmentonthe2011incomestatement?

EXERCISES

Exercise1.During2012,LightCompanypurchasedtradingsecuritiesasashort-terminvestment.

ThecostsofthesecuritiesandtheirmarketvaluesonDecember31,2012,arelistedbelow:

SecurityCostMarketvalue,December31,2012

A$65000$75000

B10000054000

C220000226000

Atthebeginningof2012,LightCompanyhadnoinvestmentintradingsecurities.Beforeany

adjustmentsrelatedtothesetradingsecurities,LightCompanyhadnetincomeof$300000.

Instructions

1.Whatisnetincomeaftermakinganynecessarytradingsecurityadjustments?(Ignoreincome

taxes.)

2.WhatwouldnetincomebeifthemarketvalueofSecurityBwere$95000?

Exercise2.OnJanuary10,2012,BookerInc.acquired16000sharesoftheoutstandingcommon

stockofPacificCompanyfor$800000.atthetimeofpurchase,PacificCompanyhadoutstanding

80000shareswithabookvalueof$4million.OnDecember31,2012,thefollowingeventstook

place.

(a)Pacificreportednetincomeof$180000fortheyear2012.

(b)BookerreceivedfromPacificadividendof$0.75pershareofcommonstock.

(c)ThemarketvalueofPacificCompanystockhadtemporarilydeclinedto$40pershare.

Instructions

Preparetheentriesthatwouldberequiredtoreflectthepurchaseandsubsequenteventsonthe

booksofBookerInc.,assumingtheequitymethodisappropriate.

Exercise3.Amachineispurchasedatthebeginningof2012for$36000.Itsestimatedlifeis6

years.Freightcostsonthemachineare$2000.Installationcostsare$1200.Themachineis

estimatedtohavearesidualvalueof$500andausefullifeof40000hours.Itwasused6000

hoursin2012.

Instructions

1.Whatisthecostofthemachineforaccountingpurposes?

2.Computethedepreciationchargefor2012using(a)thestraight-linemethodand(b)the

service-hoursmethod.

Exercise4.DeltaCompanypurchasedaplantbuilding10yearsagofor$1300000.Thebuilding

hasbeendepreciatedusingthestraight-linemethodwitha30-yearusefullifeand10%residual

value.Della'soperationshaveexperiencedsignificantlossesforthepast2years,soDeltahas

decidedthatthebuildingshouldbeevaluatedforpossibleimpairment.Deltaestimatedthatthe

recoverableamountofthebuildingis$780000.

Instructions

Determinewhetheranimpairmentlossshouldberecognized.

Exercise5.NeedleCompanypurchasedanassetfor$17000onJanuary2,2010.Theassethasan

expectedresidualvalueof$1000.thedepreciationexpensefor2010and2011isshownnextfbr

twoalternativedepreciationmethods:

YearMethodAMethodB

2010$4000$6400

2011