Exam (elaborations)
Intermediate Accounting Exam 2 Review Questions and Answers 100% Solved
- Course
- Institution
Intermediate Accounting Exam 2 Review Questions and Answers 100% Solved
[Show more]
Content preview
Intermediate Accounting Exam 2Review Questions and Answers 100%
Solved
Ronin Corp. recognizes revenue over time related to a long-term contract. The contract price is
$5,000,000, total expected construction costs are $3,000,000, and actual costs incurred during
the first year are $300,000. Actual costs for year 2 are $900,000 and estimated cost to complete
is $1,800,000. The amount of previously recognized revenue is $500,000. Revenue recognized
for year 2 is: - ✔✔$1.5 million
300,000+900,000 = 1,200,000
($1.2 mill/3 mill) x (5 mill) - $500,000 =
A company believes its sales returns will be material. What is the journal entry required?
-Debit accounts receivable; credit allowance for sales returns.
-Debit allowance for sales returns; credit sales returns.
,-Debit allowance for sales returns; credit accounts receivable.
-Debit sales returns; credit allowance for sales returns. - ✔✔Debit sales returns; credit allowance
for sales returns.
Munchen Company prepays $89,000 for inventory to be delivered in two years. The applicable
interest rate is 6%. One year after the prepayment, Muchen should recognize: - ✔✔interest
revenue of $5,340
N=1
I/Y = 6
PV = 89,000
PMT = 0
FV = 94,340
94,340-89,000 = 5,340
The of recording sales revenue recognizes the discount not taken as a part of the sale.
-gross method
-net method
-trade method - ✔✔gross method
Examine the following journal entry. Debit Refund liability $10,000; credit Cash $10,000; debit
Inventory $6,000; and credit Inventory-estimated returns $6,000. What is the transaction that
required this entry?
-Adjustment for sales returns that occurred.
,-Returned inventory purchased to the supplier.
-Adjustment for delinquent account of customer.
-Sale of of goods on account to a customer. - ✔✔Adjustment for sales returns that occurred.
True or false: An annuity due is the same as an ordinary annuity. - ✔✔False
In an annuity due, the payment occurs at the beginning of the period. In an ordinary annuity, the
payment occurs at the end of the period.
In a deferred annuity, a two-step process can be used to calculate the present value of the annuity.
The first step requires the calculation of the present value of the annuity at the beginning of the
annuity period. The second step involves discounting the amount calculated in step 1
-to its future value at maturity
-to its future value as of today
-to its present value as of today
-to its present value at maturity - ✔✔to its present value as of today
The amount received for an extended warranty is initially
-recognized as a deferred revenue liability.
-ignored.
, -combined with the contract price for the related product. - ✔✔recognized as a deferred revenue
liability.
Options for additional goods or services are considered performance obligations if they provide a
material right to the customer that the customer
-did not expect when entering into the contract.
-expected when entering into the contract.
-would not receive otherwise.
-would receive otherwise. - ✔✔would not receive otherwise.
Which of the following situations may make the contract price less apparent? (Select all that
apply.)
-Fixed price listed in contract
-Determining whether the seller is acting as principal or agent
-Variable consideration provisions
-Sales with right of return - ✔✔-Determining whether the seller is acting as principal or agent
-Variable consideration provisions
-Sales with right of return
In a(n) , the payment is received or made at the beginning of
the period, whereas in a(n) , the payment is received at the end
of each period. (Enter one word per blank.) - ✔✔annuity due, ordinary annuity
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller TheeGrades. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $16.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75759 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now