WorksheetsDiagnostics- Accounting for Special Transactions 2022
Total questions: 10
Worksheet time: 4mins
When a noncash asset is contributed to a partnership with an accompanying liability, the book value of the asset must become the cost basis of the asset on the partnership’s financial records.
True
False
The salary portion of the profit and loss allocation is set in the articles of partnership and will not change over time.
True
False
Which of the following must exist to create the potential for a retiring partner to have a bonus recognized at the date of withdrawal?
The retiring partner must be paid more than the book value of his equity
The existing partners must decide to not admit a new partner to the partnership
The retiring partner’s equity must be acquired by the partnership
All of the choices are necessary for a bonus to be recognized
The schedule of safe payments must be used for partnership liquidation only if a cash distribution plan is not possible
True
False
It is defined as "a reinsurance of reinsurance assumed where the reinsurer will retrocede a whole or a part of the risk accepted from the direct insurer to another insurer".
Reinsurer
Ceding insurer
Beneficiary
Retrocession
A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
joint operation
joint venture
joint arrangement
elbow joint
Under IFRS, firms have free choice as to whether they use the percentage-of-completion method or the cost recovery (point in time) method to account for a long-term construction contract.
True
False
Goods on consignment should be included in the inventory of:
the consignor but not the consignee
both the consignor and the consignee
the consignee but not the consignor
neither the consignor nor the consignee
If the performance obligation is not highly dependent on, or interrelated with, other promises in the contract, then each performance obligation should be accounted for separately.
True
False
The consideration received from a contract with a customer that does not meet the criteria under ‘Step 1’ of PFRS 15 is
a. recognized as liability.
b. recorded through memo entry only.
c. disclosed only.
d. b and c
