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CHAPTER 3 The Balance Sheet and Financial Disclosures nd CMA Review Questions The following questions are adapted from a variety of sources including questions developed by the AIC Board of Examiners and those used in the Kaplan CPA Review Course to study balance sheet presentation, financial disclosures, and liquidity ratios while preparing for the CPA examination. Determine the response best completes the statements or questions. 1. In Merf's April 30, 2016, balance sheet, a note receivable was reported as a noncurrent asset and the accrued interest for eight months was reported as a current asset. Which of the following descriptions fit Merf's receivable classification? a. Both principal and interest amounts are due on August 31, 2016, and August 31, 2017. b. Principal is due August 31, 2017, and interest is due August 31, 2016, and August 31, 2017. c. Principal and interest are due December 31, 2016. d. Both principal and interest amounts are due on December 31, 2016, and December 31, 2017. 2. Mill Co.'s trial balance included the following account balances at December 31, 2016: Accounts payable Bond payable, due 2017 Dividends payable 1/31/17 Notes payable, due 2018 $15,000 22,000 8,000 20,000 What amount should be included in the current liability section of Mill's December 31, 2016, a. $45,000 b. $51,000 c. $65,000 d. $78,000 Which of the following would be disclosed in the summary of significant accounting policies Composition of Plant Assets Inventory Pricing No Yes Yes No Yes Yes

CHAPTER 3
The Balance Sheet and Financial Disclosures
nd CMA Review Questions
The following questions are adapted from a variety of sources including questions developed by the AIC
Board of Examiners and those used in the Kaplan CPA Review Course to study balance sheet presentation,
financial disclosures, and liquidity ratios while preparing for the CPA examination. Determine the response
best completes the statements or questions.
1. In Merf's April 30, 2016, balance sheet, a note receivable was reported as a noncurrent asset and the
accrued interest for eight months was reported as a current asset. Which of the following descriptions
fit Merf's receivable classification?
a. Both principal and interest amounts are due on August 31, 2016, and August 31, 2017.
b. Principal is due August 31, 2017, and interest is due August 31, 2016, and August 31, 2017.
c. Principal and interest are due December 31, 2016.
d. Both principal and interest amounts are due on December 31, 2016, and December 31, 2017.
2. Mill Co.'s trial balance included the following account balances at December 31, 2016:
Accounts payable
Bond payable, due 2017
Dividends payable 1/31/17
Notes payable, due 2018
$15,000
22,000
8,000
20,000
What amount should be included in the current liability section of Mill's December 31, 2016,
a. $45,000
b. $51,000
c. $65,000
d. $78,000
Which of the following would be disclosed in the summary of significant accounting policies
Composition of
Plant Assets
Inventory
Pricing
No
Yes
Yes
No
Yes
Yes

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