24 Questions
When recording the impairment of a loan, what is the correct debit entry?
Impairment account for the loan interest receivable
The Profit and Loss Statement (PL) is a quarterly report.
False
What is the purpose of the Monthly Investment Statement?
To record the fair value adjustment of bonds
The Net Tangible Assets (NTA) is calculated during the ___________ tasks.
monthly
What is the purpose of the Goods and Services Tax (GST) report?
To report the goods and services tax
Match the following reports with their frequency:
Profit and Loss Statement (PL) = Monthly Goods and Services Tax (GST) = Quarterly Annual Financial Statements = Yearly Trial Balance (TB) = Monthly
The reviewer provides comments via email during the internal review process.
True
What is the purpose of the Coupon Interest Receivable account?
To record the coupon interest receivable
What is the revision number of the Cornerstone Bond Fund document?
1
The document was prepared by Isac Lin.
False
What is the name of the fund mentioned in the document?
Cornerstone Bond Fund
The document is dated _________________.
June 24th, 2024
Match the following with the correct step in the procedures:
Invoices = Step 1: Preliminary information Bond Documents = Step 1: Preliminary information Monthly Investment Statement = Step 1: Preliminary information
Who reviewed the document?
Isac Lin
The document has a revision date specified.
False
What is the title of the section that comes after the "Flowchart" section in the Table of Contents?
Procedures
What is the minimum fee for the Trustee Fee (RITC 55%)?
$5,000
The Accrued charges include only Trustee Fee and Registry Fees.
False
What is the purpose of the Admin and Accounting Fee?
administrative and accounting services
The application of GST and determination of RITC is part of the general guidelines for the maintenance of accurate and comprehensive records for ____________ purposes.
audit and review
Match the following accounts with their corresponding debit and credit actions:
Loan Interest Receivable = Debit Impairment Loss Account = Debit: Impairment Loss
What is the purpose of the Loan Interest Receivable account?
To record loan interest payments from borrowers
The calculation of fees is based on Net Asset Value.
False
What is the frequency of recording charges and updating of payments and balances?
Monthly
Study Notes
Accounting Procedures for Cornerstone Bond Fund
####Recording Interest Receivable
- Debit: Loan Interest Receivable account
- Credit: Loan Interest Received account
- Recognize interest income
####Impairment of Interest Receivable
- Debit: Impairment Loss account for the impaired amount
- Credit: Provision for Impairment Loss account
- Record impairment losses on interest receivable
Bond Interest
####Recording Coupon Interest Receivable
- Debit: Coupon Interest Receivable account
- Credit: Interest Received - Bond account
####Recording Amortization Expenses
- Debit: Amortization Expenses account
- Credit: Investment Portfolio - Bond account
Fair Value Adjustment of Bond
- Record fair value adjustment based on Monthly Investment Statement
Reports
####Monthly Tasks
- Compile Profit and Loss Statement (PL), Balance Sheet (BS), Cash Flow Statement (CF), Trial Balance (TB), and General Ledger (GL)
- Calculate Net Tangible Assets (NTA)
####Quarterly Tasks
- Complete Goods and Services Tax (GST) and Business Activity Statements (BAS)
####Yearly Tasks
- Calculate Short-Term Incentives (STI) for review by tax team
- Prepare annual financial statements
Accrued Charges
- Include Trustee Fee, Registry Fees, Audit Fee, and Admin and Accounting Fee
- Calculate fees based on Gross Asset Value
- Apply GST and determine RITC
- Identify Non-Claimable GST
- Record charges and update payments and balances
- Maintain accurate and comprehensive records for audit and review purposes
- Verify calculations and entries for accuracy
This quiz assesses your understanding of accounting entries for bond interest receivable, amortization expenses, and impairment losses. Test your knowledge of journal entries and accounts affected.
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