Reference no: EM133234268

Multiple Choice. No need for long explanations

1. The Home Office Current account in the books of the branch is comparable to

A. Equity account

B. Asset account

C. Contra account

D. Liability account

2. In general, contract costs incurred in relation to a contract with a customer must be:

A. Recognized as an expense when incurred

B. Recognized as an asset if they relate to a performance obligation which has been satisfied

C. Recognized as an asset if they relate to a performance obligation which has not yet been satisfied

D. Recognized as an asset if they are not expected to be recovered

3. Which of the following about performance obligations is incorrect?

A. A warranty is a separate performance obligation if the customer has the option to purchase the warranty separately.

An option that has a material right is a separate performance obligation.

B. A warranty is a separate performance obligation if the warranty provides a service to the customer beyond quality assurance.

C. Quality-assurance warranty is part of the performance obligation to deliver goods or services that are free of defects, therefore is not separate performance obligation.

D. Construction is an example of multiple performance obligations contract since the associated services are distinct and separately identifiable from the other.

4. Which of the following is incorrect during corporate liquidation:

A. None of the above.

B. Accompanying a Statement of Affairs is a Statement of Realization and Liquidation that shows the gains or losses on realization of assets and a list of additional costs associated with the liquidation.

C. Statement of Affairs is the statement of a financial condition of an insolvent corporation as of a given date presenting the assets and liabilities from a liquidation viewpoint.

D. Free assets are available to secured and unsecured creditors.

5. Statement 1:  In contrast with a corporation, a partnership may be created by an oral or written contract between two or more persons.

Statement 2: When individuals invest assets in a partnership, they retain no claim to those specific assets but acquired an ownership equity in net assets of the partnership.

A. Only statement 1 is correct.

B. Only statement 2 is correct.

C. Both statements are correct.

C. Both statements are incorrect.