Advanced Financial Accounting Exam
#2 - Review MCQ. Newest 2026-2027.
Questions and Correct Answers.
Graded A
An intra-entity transfer of a depreciable asset took place whereby the
transfer price exceeded the book value of the asset. Which statement is
true with respect to the year following the year in which the transfer
occurred?
A) A worksheet entry is made with a debit to gain for downstream transfer.
B) A worksheet entry is made with a debit to gain for an upstream transfer.
C) A worksheet entry is made with a debit to investment in subsidiary for a
downstream transfer when the parent uses the equity method
D) A worksheet entry is made with a debit to retained earnings for
downstream transfer, regardless of the method used account for the
investment. - ANSC) A worksheet entry is made with a debit to investment
in subsidiary for a downstream transfer when the parent uses the equity
method
1
, An intra-entity transfer took place whereby the book value exceeded the
transfer price of a depreciate asset. Which statement is true for the year
after the year of transfer?
A) A worksheet entry is made with a debit to retained earnings for an
upstream transfer.
B) A worksheet entry is made with a credit to retained earnings for an
upstream transfer
C) A worksheet entry is made with a debit to retained earning for
downstream transfer.
D) A worksheet entry is made with a debit to investment in subsidiary for
downstream transfer. - ANSB) A worksheet entry is made with a credit to
retained earnings for an upstream transfer
How much intercompany inventory profit should be eliminated from ending
inventory in the consolidation process?
A) Net profit on a total inter-company sales during the year
B) Gross profit on total inter-company sales during the year
C) Gross profit on goods sold to outside parties during the year
D) Gross profit on goods remaining in the buyer's inventory at year-end. -
ANSD) Gross profit on goods remaining in the buyer's inventory at year-
end.
2
#2 - Review MCQ. Newest 2026-2027.
Questions and Correct Answers.
Graded A
An intra-entity transfer of a depreciable asset took place whereby the
transfer price exceeded the book value of the asset. Which statement is
true with respect to the year following the year in which the transfer
occurred?
A) A worksheet entry is made with a debit to gain for downstream transfer.
B) A worksheet entry is made with a debit to gain for an upstream transfer.
C) A worksheet entry is made with a debit to investment in subsidiary for a
downstream transfer when the parent uses the equity method
D) A worksheet entry is made with a debit to retained earnings for
downstream transfer, regardless of the method used account for the
investment. - ANSC) A worksheet entry is made with a debit to investment
in subsidiary for a downstream transfer when the parent uses the equity
method
1
, An intra-entity transfer took place whereby the book value exceeded the
transfer price of a depreciate asset. Which statement is true for the year
after the year of transfer?
A) A worksheet entry is made with a debit to retained earnings for an
upstream transfer.
B) A worksheet entry is made with a credit to retained earnings for an
upstream transfer
C) A worksheet entry is made with a debit to retained earning for
downstream transfer.
D) A worksheet entry is made with a debit to investment in subsidiary for
downstream transfer. - ANSB) A worksheet entry is made with a credit to
retained earnings for an upstream transfer
How much intercompany inventory profit should be eliminated from ending
inventory in the consolidation process?
A) Net profit on a total inter-company sales during the year
B) Gross profit on total inter-company sales during the year
C) Gross profit on goods sold to outside parties during the year
D) Gross profit on goods remaining in the buyer's inventory at year-end. -
ANSD) Gross profit on goods remaining in the buyer's inventory at year-
end.
2
