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    AC3202 WK1 Assignment (22:23A)

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    This document provides an overview of the AC3202 Corporate Accounting I course for Semester A of the 2022/2023 academic year. It includes [1] 10 true/false questions testing concepts related to financial reporting and the conceptual framework; and [2] 6 situations testing accounting principles and assumptions. The document evaluates topics such as the purpose of financial accounting, accounting elements like equity, and the application of concepts like materiality, accrual accounting, and the going concern assumption.

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    AC3202 WK1 Assignment (22:23A)

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    Long Long
    29 views2 pages
    This document provides an overview of the AC3202 Corporate Accounting I course for Semester A of the 2022/2023 academic year. It includes [1] 10 true/false questions testing concepts related to financial reporting and the conceptual framework; and [2] 6 situations testing accounting principles and assumptions. The document evaluates topics such as the purpose of financial accounting, accounting elements like equity, and the application of concepts like materiality, accrual accounting, and the going concern assumption.

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    This document provides an overview of the AC3202 Corporate Accounting I course for Semester A of the 2022/2023 academic year. It includes [1] 10 true/false questions testing concepts related to financial reporting and the conceptual framework; and [2] 6 situations testing accounting principles and assumptions. The document evaluates topics such as the purpose of financial accounting, accounting elements like equity, and the application of concepts like materiality, accrual accounting, and the going concern assumption.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    29 views2 pages

    AC3202 WK1 Assignment (22:23A)

    Uploaded by

    Long Long
    This document provides an overview of the AC3202 Corporate Accounting I course for Semester A of the 2022/2023 academic year. It includes [1] 10 true/false questions testing concepts related to financial reporting and the conceptual framework; and [2] 6 situations testing accounting principles and assumptions. The document evaluates topics such as the purpose of financial accounting, accounting elements like equity, and the application of concepts like materiality, accrual accounting, and the going concern assumption.

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    AC3202 Corporate Accounting I, Semester A, 2022/2023

    Week 1 Financial Reporting and Conceptual Framework Assignements

    A. True/False questions

    1. The primary function of financial accounting is to provide financial information about


    the reporting entity that is useful to existing and potential investors, lenders and other
    creditors in making decisions about providing resources to the entity.

    2. Under the entity assumption, a company is considered an extension of its owners.

    3. Representational faithfulness and predictive value are two ingredients of the


    qualitative characteristic of relevance.

    4. Charging depreciation expense for buildings over its useful life is an application of the
    cost principle.

    5. Comparability is a desired qualitative characteristic of accounting information.

    6. Equity is a residual amount representing the owner's interest in the net assets of the
    business.

    7. Materiality can be affected by the dollar amount of an item, the nature of the item, or
    both.

    8. Accrual accounting attempts to measure revenues and expenses that occurred during
    accounting periods so that they correspond to net operating cash flows.

    9. Gains are increases in equity from the sale of goods and/or services.

    10. The going-concern assumption should be followed for financial statements of an entity
    that appears to be verging on bankruptcy.

    1
    B. For each of the following independent situations, state whether the following
    accounting practices are in accordance with or in violation of generally
    accepted accounting principles. Identify the accounting assumptions and/or
    principles followed / violated in each situation.

    1. A company sells a product that has a two-year warranty covering parts and labor. As a
    result of the liability created by the warranty, an estimate of future warranty costs is
    debited to the Product Warranty Expense account.

    2. Bond Ltd. purchased a piece of land several years ago for $2 million. Because
    similar piece of land nearby was recently sold for $2.6 million, Bond Ltd. reflected
    the land at a value of $2.6 million in its current year-end financial statements.

    3. Dr. Chan is a practicing lawyer. Over the years, she has accumulated a personal
    investment portfolio of securities, virtually all of which has been purchased from her
    earnings as a lawyer. The investment portfolio is not reflected in the accounting
    records of her law practice.

    4. A note describing the company’s possible liability in a lawsuit is included in the notes
    to the financial statements even though no formal liability exists at the reporting date.

    5. Rex recently signed a three year contract to provide accounting services to a client for
    $3 million. Rex recorded the $3 million as sales for the current period.

    6. Post Company owns investments that are actively traded in a liquid market. The
    company originally acquired the investments for $3 million, but the market value at
    the end of the period is $7 million. Post adjusts the investment account to reflect $7
    million.

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