Accounting Answers

• Which one of the following does not reflect behaviour that is expected of an ethical professional person? (Select one) A. Being honest in all interactions
•  B. Acting with dignity towards all people and in all circumstances
•  C. Being unbiased when it comes to making decisions
•  D. Willingly sharing any information obtained whenever asked to do so
•  E. Compliance with professional standards

• Managers usually follow a Utilitarianism philosophy? This is evident from: (Select one) A. Their aim to maximise income of the entity, irrespective of the cost incurred in generating the income.
•  B. Their aim to make a difference in society, irrespective of the cost.
•  C. Their aim to maximise the net profit of the entity.
•  D. Their aim to limit the amount of tax that the company has to pay, whatever it takes.
•  E. Their openness to participate in new business ventures that will grow the entity’s business.

• Which one of the following does not fit? (Select one) A. Support for compliance with laws
•  B. Support for compliance with ethical principles
•  C. Compliance with tax laws
•  D. Driving an ethical corporate culture
•  E. Paying a large commission to be awarded a tender

• Which of the following would not be regarded as “creative accounting”? (Select one) A. Inflating profits by passing accounting entries that are not supported by documentation.
•  B. Decreasing the amount of expenses disclosed by adding the cost of the expense to the value of an asset instead of showing it as an expense.
•  C. Postponing to the next financial period, the passing of accounting entries for costs incurred in the current year.
•  D. Passing accounting entries that are fully supported by valid documentation.
•  E. Reflecting assets that belong to someone else on an entity’s financial statements.

• Which of the following actions would not support ethical business practices? (select one) A. A Code of Ethics for the business
•  B. Creative accounting practices of management
•  C. Management that provides shareholders and employees with full and correct information about the entity’s financial status
•  D. Management that openly supports ethical business practices (corporate culture)
•  E. Management that does all in its power to adhere to all applicable laws and regulations

Which ethical philosophy can be regarded as the opposite of altruism? (Select one)

A. Egoism

B. Altruism

C. Utilitarianism

D. Deontology

E. None of the above

• The management of WorldCom managed the company with the following philosophy in mind: “The executive management of WorldCom did not want the company to fail. If the company failed, there reputation would be harmed and they would lose their high paying jobs.” This philosophy is called… (select one) A. Egoism
•  B. Altruism
•  C. Utilitarianism
•  D. Deontology
•  E. None of the above

Exercise F Raiser Company purchased goods at a gross selling price of USD 2,400 on August 1. Discount terms

of 2/10, n/30 were available. For each of the following independent situations, determine (1) the cash discount

available on the final payment and (2) the amount paid if payment is made within the discount period.

Purchase

Transportation Freight Allowance

Terms Paid (by) Granted

a. FOB shipping point $240 (buyer) $480

b. FOB destination 120 (seller) 240

c. FOB shipping point 180 (seller) 720

d. FOB destination 192 (buyer) 120

On January 1, 2019, ELITE COMPANY PURCHASED EQUIPMENT WITH COST OF 11,000,000 What amount should be recognized as impairment loss for 2019?