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- 1. Multiple Choice
Which of the following is NOT the purpose of the IASB’s Conceptual Framework?
To be authoritative where a specific IFRS conflicts with the Conceptual Framework
To assist in determining the treatment of items not covered by an existing IFRS
To assist auditors in forming an opinion on whether financial statements comply with IFRS
To assist the IASB in the preparation and review of IFRS
- 2. Multiple Choice
Under the current structure of regulatory bodies, which of the bodies listed below acts as the overall supervisory body?
IFRS Interpretations Committee
International Accounting Standards Board
IFRS Advisory Council
IFRS Foundation
- 3. Multiple Choice
Which of the bodies listed below is responsible for the approval of Draft Interpretations?
IFRS Interpretations Committee
International Accounting Standards Board
IFRS Advisory Council
IFRS Foundation
- 4. Multiple Choice
Which of the following best describes the role of the IFRS Advisory Council?
To prepare interpretations of IFRS Standards
To provide the Board with the views of its members on standard-setting projects
To promote the use of IFRS Standards amongst its members
To select the members of the Board
- 5. Fill in the Blank
The two main approaches to accounting are ________________
- 6. Multiple Choice
According to the IASB Conceptual Framework, the objective of financial reporting is to?
Satisfy legal requirements
Provide financial information that is useful to users
Comply with generally accepted accounting principles (GAAP)
Disclose all material information relevant to stakeholders
- 7. Multiple Choice
Under the Conceptual Framework for Financial Reporting, which of the following is the ‘threshold quality’ of useful information?
Relevance
Materiality
Reliability
Understandability
- 8. Multiple Choice
According to The Conceptual Framework for Financial Reporting, which of the following is the underlying assumption of a set of financial statements?
Going Concern
Prudence
Relevance
Comparability
- 9. Multiple Choice
The Board's Framework identifies qualitative characteristics.
(i) Relevance
(ii) Comparability
(iii) Verifiability
(iv) Understandability
(v) Faithful representation
Which of the above are not listed as enhancing characteristics?
(ii) and (iii)
(i), (iv) and (v)
(i) and (v)
(ii), (iii) and (iv)
- 10. Multiple Choice
Information that has ________ is said to have relevance.
Neutrality
Materiality
Verifiability
Confirmatory value
- 11. Multiple Choice
According to the IASB Conceptual Framework, the concept of faithful representation include.
Verifiability
Substance over form
Estimates
Materiality
- 12. Multiple Choice
Which of the following is a change in accounting policy?
The company decides to change its method of depreciation from a straight-line method to reducing
balance method.
The company decides to change from capitalizing finance costs to immediate write-off.
Change in the asset presentation policy, from a current and non-current classification to a presentation based on the degree of liquidity of the assets.
- 13. Multiple Choice
The changes in policies are applied__________________.
Retrospectively
Prospectively
- 14. Multiple Choice
Which one is true
Expenses are recognized when a decrease in future economic benefits related to an increase in an asset or an increase of a liability has arisen that can be measured reliably.
Expenses are recognized when a decrease in future economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably.
Expenses are recognized when an increase in future economic benefits related to a decrease in an asset or an increase of a liability has arisen that can be measured reliably.
- 15. Multiple Choice
Historical cost is defined as the _____.
Amount one could sell an item for in the marketplace
Amount one paid for an item plus any amount to get it working
Amount one could sell an item for at a sale
The cost of an item adding in inflation for the period of time one intends to keep it
- 16. Multiple Choice
Which is correct
The restatement of last year's closing inventory in current period financial statements represents a:
correction of a prior-period error
change in accounting policy
change in accounting estimate.
- 17. Multiple Choice
The IASB’s Framework defines “equity interest” as:
Opening capital + profit – drawings
Residual interest in the assets of an entity after deducting its liabilities
Amount of capital introduced by the owner of the business
What a business owes its owner or owners.
- 18. Multiple Choice
Which one is an advantage of historical cost?
Unreliable
Flexible
Verification
Biased
- 19. Multiple Choice
A company owns a machine which it purchased four years ago for $300,000. The accumulated depreciation on the machine to date is $90,000. The machine could be sold to another manufacturer for $80,000 but there would be dismantling costs of $9,000.
What is the historical cost and the net realizable value?
210,000, 81,000
99,000, 80,000
210,000, 71,000
- 20. Multiple Choice
The effects of a change in ______________________ should be included in the statement of profit or loss in the period of the change and, if subsequent periods are affected, in those subsequent periods.
Accounting estimates
Accounting policies
Prior period errors
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