12/15/22, 9:11 AM
Quiz 5 - Notes to the FS - Part 1: Attempt review
Started on Saturday, 26 November 2022, 2:16 PM
State Finished
Completed on Saturday, 26 November 2022, 2:46 PM
Time taken
Grade
30 mins 1 sec
19.00 out of 20.00 (95%)
Question 1
Correct
Mark 1.00 out of 1.00
A company reduces the lives of several patents from 17 to 10 years because of rapid technological change. This is a change in accounting
policy.
Select one:
True
False 
The correct answer is 'False'.
Question 2
Correct
Mark 1.00 out of 1.00
A company changes its depreciation method for machinery and equipment from sum-of-the-years'-digits depreciation to the straight-line
method. This is a change in accounting estimate.
Select one:
True 
False
The correct answer is 'True'.
https://lms.nddu.edu.ph/mod/quiz/review.php?attempt=99795&cmid=16079
1/7
12/15/22, 9:11 AM
Quiz 5 - Notes to the FS - Part 1: Attempt review
Question 3
Correct
Mark 2.00 out of 2.00
Conn Co. reported a retained earnings balance of ₱400,000 at December 31, 20X8. In August 20X9, Conn determined that insurance premiums
of ₱60,000 for the three-year period beginning January 1, 20X8, had been paid and fully expensed in 20X8. Conn has a 30% income tax rate.
What amount should Conn report as adjusted beginning retained earnings in its 20X9 statement of retained earnings?
a.
442,000
b. 420,000
c.
440,000
d. 428,000
400,000+((60,000 x 2/3) x 70%) = 428,000
Your answer is correct.
The correct answer is:
428,000
Question 4
Correct
Mark 1.00 out of 1.00
An understatement in ending inventory results to overstatement of profit during the period.
Select one:
True
False 
The correct answer is 'False'.
Question 5
Correct
Mark 1.00 out of 1.00
All changes in accounting policy are accounted for by retrospective application.
Select one:
True
False 
The correct answer is 'False'.
https://lms.nddu.edu.ph/mod/quiz/review.php?attempt=99795&cmid=16079
2/7
12/15/22, 9:11 AM
Quiz 5 - Notes to the FS - Part 1: Attempt review
Question 6
Correct
Mark 1.00 out of 1.00
An analysis of the allowance for doubtful accounts showed the balance should be reduced by ₱27,500 due to recent changes in economic
conditions. This is a change in accounting estimate.
Select one:
True 
False
The correct answer is 'True'.
Question 7
Correct
Mark 1.00 out of 1.00
The resolution of a contingent event after the end of the reporting period but before the financial statements are authorized for issue which
provides evidence of the entity’s obligation to pay bonus to a key management personnel for service he has rendered during the reporting
period is a non-adjusting event.
Select one:
True
False 
The correct answer is 'False'.
Question 8
Correct
Mark 1.00 out of 1.00
A company changes from a non-acceptable to an acceptable accounting principle. This is a change in accounting policy.
Select one:
True
False 
The correct answer is 'False'.
https://lms.nddu.edu.ph/mod/quiz/review.php?attempt=99795&cmid=16079
3/7
12/15/22, 9:11 AM
Quiz 5 - Notes to the FS - Part 1: Attempt review
Question 9
Correct
Mark 1.00 out of 1.00
The discovery of a prior period error after the end of the reporting period but before the financial statements are authorized for issue is an
adjusting event.
Select one:
True 
False
The correct answer is 'True'.
Question 10
Correct
Mark 1.00 out of 1.00
The filing of a lawsuit against the entity for an accident that occurred after the end of the reporting period but before the financial statements
are authorized for issue is an adjusting event.
Select one:
True
False 
The correct answer is 'False'.
Question 11
Not answered
Marked out of 1.00
Adopting and announcing of a formal plan to close a business segment after the end of the reporting period but before the financial
statements are authorized for issue is a non-adjusting event.
Select one:
True
False
The correct answer is 'True'.
https://lms.nddu.edu.ph/mod/quiz/review.php?attempt=99795&cmid=16079
4/7
12/15/22, 9:11 AM
Quiz 5 - Notes to the FS - Part 1: Attempt review
Question 12
Correct
Mark 2.00 out of 2.00
Loeb Corp. frequently borrows from the bank in order to maintain sufficient operating cash. The following loans were at a 12% interest rate,
with interest payable at maturity. Loeb repaid each loan on its scheduled maturity date.
Date of loan
11/1/x1
2/1/x2
Amount
₱ 5,000
15,000
5/1/x2
8,000
Maturity date
10/31/x2
7/31/x2
Term of loan
1 Year
6 Months
1/31/x3
9 Months
Loeb records interest expense when the loans are repaid. As a result, interest expense of ₱1,500 was recorded in 20x2. If no correction is made,
by what amount would 20x2 interest expense be understated?
a.
620
b. 640
c.
720
d. 540
(5,000 x 12% x 10/12)
500
(15,000 x 12% x 6/12)
900
(8,000 x 12% x 8/12)
640
Correct interest expense - 20x2
Correct interest expense - 20x2
Interest expense recognized
Understatement
2,040
2,040
1,500
540
Your answer is correct.
The correct answer is:
540
Question 13
Correct
Mark 1.00 out of 1.00
The understatement of merchandise inventory is an example of an error that counterbalances after two years.
Select one:
True 
False
The correct answer is 'True'.
https://lms.nddu.edu.ph/mod/quiz/review.php?attempt=99795&cmid=16079
5/7
12/15/22, 9:11 AM
Quiz 5 - Notes to the FS - Part 1: Attempt review
Question 14
Correct
Mark 2.00 out of 2.00
Foy Corp. failed to accrue warranty costs of ₱50,000 in its December 31, 20X4, financial statements. In addition, a change from straight-line to
accelerated depreciation made at the beginning of 20X5 resulted in a cumulative effect of ₱30,000 on Foy's retained earnings. Both the ₱50,000
and the ₱30,000 are net of related income taxes. What amount should Foy report as prior period adjustment in 20X5?
a.
30,000
b. 0
c.
80,000
d. 50,000
correction of prior period error
Your answer is correct.
The correct answer is:
50,000
Question 15
Correct
Mark 1.00 out of 1.00
The settlement of a contingent event at an amount below the provision recognized as at the end of the reporting period after the end of the
reporting period but before the financial statements are authorized for issue is an adjusting event.
Select one:
True 
False
The correct answer is 'True'.
Question 16
Correct
Mark 1.00 out of 1.00
The primary distinction between a change in accounting estimate and the correction of an error is the timing of availability of information; a
change in estimate is based on new information not previously available.
Select one:
True 
False
The correct answer is 'True'.
https://lms.nddu.edu.ph/mod/quiz/review.php?attempt=99795&cmid=16079
6/7
12/15/22, 9:11 AM
Quiz 5 - Notes to the FS - Part 1: Attempt review
Question 17
Correct
Mark 1.00 out of 1.00
Failure to record amortization is an example of a non-counter balancing error.
Select one:
True 
False
The correct answer is 'True'.
https://lms.nddu.edu.ph/mod/quiz/review.php?attempt=99795&cmid=16079
7/7