FRA 1.9 24.05

A classified balance sheet shows assets separately classified as either:

• A. liquid or non-liquid.
• B. tangible or intangible.
• C. current or non-current.

“Other current assets” typically include:

• A. trade receivables.
• B. customer prepayments.
• C. items deemed too small to be individually listed on the balance sheet.

Q. The non-controlling (minority) interest in consolidated subsidiaries is presented on the balance sheet:

• A. as a long-term liability.
• B. separately, but as a part of shareholders’ equity.
• C. as a mezzanine item between liabilities and shareholders’ equity.

Shares that have been repurchased and not cancelled by the company that issued them are referred to as:

• A. preferred shares.
• B. contributed capital.
• C. treasury stock.

Which of the following items is an example of deferred income?

• A. Normal operating expenses that have been paid in advance
• B. A payment received for contracted goods and services prior to their delivery
• C. An expense recognized on a company’s income statement but not paid for as of the balance sheet date

Q. The most likely company to use a liquidity-based balance sheet presentation is a:

• A. bank.
• B. computer manufacturer holding inventories.
• C. software company with trade receivables and payables.

Q. An example of a contra asset account is:

• A. depreciation expense.
• B. sales returns and allowances.
• C. allowance for doubtful accounts.

• A. $200,000 .
• B. $900,000 .
• C. $1,000,000 .

Q. Defining total asset turnover as revenue divided by average total assets, all else equal, impairment write-downs of long-lived assets owned by a company will most likely result in an increase for that company in:

• A. the debt-to-equity ratio but not the total asset turnover.
• B. the total asset turnover but not the debt-to-equity ratio.
• C. both the debt-to-equity ratio and the total asset turnover.

Q. Which inventory method is least likely to be used under IFRS?

• A. First in, first out (FIFO).
• B. Last in, first out (LIFO).
• C. Weighted average.