ACCT 460- Exam 2 Athabasca University
EXAM COVERAGE
ACCT 460 - Exam 2 (Athabasca University)
Revenue Recognition - ASC 606 / IFRS 15, identifying
performance obligations, contract revenue allocation
Accounts Receivable & Bad Debts - Allowance method,
direct write-off, aging schedules
Inventory Accounting - FIFO, LIFO, weighted average,
lower of cost or net realizable value
Cost of Goods Sold & Gross Profit - Calculation, impact of
,inventory methods
Long-Lived Assets - Acquisition, capitalization,
depreciation methods (straight-line, declining balance,
units of production)
Impairment of Assets - Testing for impairment, recording
losses under IFRS/GAAP
Leases - Lessee and lessor accounting, finance vs
operating leases
Current Liabilities & Contingencies - Recognition,
measurement, and disclosure
Statement of Cash Flows - Operating, investing, financing
activities, indirect vs direct method
Financial Ratios & Analysis - Liquidity, solvency,
profitability, efficiency ratios
,Considering each independently, a change in which of the
following sample planning factors would influence the
sample size for a substantive test of details for a specific
amount? Left is expected misstatement; right is tolerable
misstatement
a. Yes; yes
b. No; no
c. No; yes
d. Yes; no
a. Yes; yes
, The risk of incorrect acceptance relates to the
a. Effectiveness of the audit
b. Allowable risk of tolerable misstatement
c. Efficiency of the audit
d. Planning materiality
A number of factors influence the sample size for a
substantive test of details of an account balance. All other
factors being equal, which of the following would lead to
larger sample size?
a. Greater reliance on analytical procedures
b. Smaller expected frequency of misstatements
EXAM COVERAGE
ACCT 460 - Exam 2 (Athabasca University)
Revenue Recognition - ASC 606 / IFRS 15, identifying
performance obligations, contract revenue allocation
Accounts Receivable & Bad Debts - Allowance method,
direct write-off, aging schedules
Inventory Accounting - FIFO, LIFO, weighted average,
lower of cost or net realizable value
Cost of Goods Sold & Gross Profit - Calculation, impact of
,inventory methods
Long-Lived Assets - Acquisition, capitalization,
depreciation methods (straight-line, declining balance,
units of production)
Impairment of Assets - Testing for impairment, recording
losses under IFRS/GAAP
Leases - Lessee and lessor accounting, finance vs
operating leases
Current Liabilities & Contingencies - Recognition,
measurement, and disclosure
Statement of Cash Flows - Operating, investing, financing
activities, indirect vs direct method
Financial Ratios & Analysis - Liquidity, solvency,
profitability, efficiency ratios
,Considering each independently, a change in which of the
following sample planning factors would influence the
sample size for a substantive test of details for a specific
amount? Left is expected misstatement; right is tolerable
misstatement
a. Yes; yes
b. No; no
c. No; yes
d. Yes; no
a. Yes; yes
, The risk of incorrect acceptance relates to the
a. Effectiveness of the audit
b. Allowable risk of tolerable misstatement
c. Efficiency of the audit
d. Planning materiality
A number of factors influence the sample size for a
substantive test of details of an account balance. All other
factors being equal, which of the following would lead to
larger sample size?
a. Greater reliance on analytical procedures
b. Smaller expected frequency of misstatements
