Question 1

When applying the revaluation measurement model to assets, the model:

Accepted Answer

A)  may only be applied to current assets. 
B)  is applied permanently and may not be changed. 
C)  applies to the entire class of non-current assets. 
D)  is applied to individual assets within a class of non-current assets. 
A)  may only be applied to current assets. 
B)  is applied permanently and may not be changed. 
C)  applies to the entire class of non-current assets. 
D)  is applied to individual assets within a class of non-current assets.

Question 2

The cost of property, plant and equipment is only recognised as an asset if it is probable that the future economic benefits will flow to the entity and:

Accepted Answer

A)  the asset has been fully paid for in cash. 
B)  the asset has been sent to the buyer. 
C)  it is a physical asset. 
D)  the cost can be reliably measured. 
A)  the asset has been fully paid for in cash. 
B)  the asset has been sent to the buyer. 
C)  it is a physical asset. 
D)  the cost can be reliably measured.

Question 3

Under the cost model, after initial recognition of a property, plant and equipment asset the item must be carried at its:

Accepted Answer

A)  cost less accumulated depreciation and less accumulated impairment losses. 
B)  historical cost. 
C)  initial cost. 
D)  net present value. 
A)  cost less accumulated depreciation and less accumulated impairment losses. 
B)  historical cost. 
C)  initial cost. 
D)  net present value.

Question 4

The resulting gain or loss from the sale of a non-current asset is:

Accepted Answer

A)  recognised in other comprehensive income, normally with separate disclosure of income and the carrying amount of the asset. 
B)  recognised in other comprehensive income, normally on a net basis. 
C)  recognised in current period profit or loss, normally on a net basis. 
D)  recognised in current period profit or loss, normally with separate disclosure of income and the carrying amount of the asset. 
A)  recognised in other comprehensive income, normally with separate disclosure of income and the carrying amount of the asset. 
B)  recognised in other comprehensive income, normally on a net basis. 
C)  recognised in current period profit or loss, normally on a net basis. 
D)  recognised in current period profit or loss, normally with separate disclosure of income and the carrying amount of the asset.

Question 5

Wombat Limited applies the straight-line method of depreciation to its non-current assets. The cost of the buildings was $400 000, the depreciable amount is $350 000, the residual value is $50 000 and the useful life is 10 years. The annual depreciation charge is:

Accepted Answer

A)  $35 000. 
B)  $40 000. 
C)  $50 000. 
D)  $100 000. 
A)  $35 000. 
B)  $40 000. 
C)  $50 000. 
D)  $100 000.

Question 6

Tully Limited had an existing revaluation surplus in respect to an item of plant that has now been derecognised. The appropriate journal entry to transfer the surplus to retained earnings would include:

Accepted Answer

A)  CR Retained earnings. 
B)  CR Asset revaluation surplus. 
C)  DR Gain on revaluation - OCI. 
D)  DR Retained earnings. 
A)  CR Retained earnings. 
B)  CR Asset revaluation surplus. 
C)  DR Gain on revaluation - OCI. 
D)  DR Retained earnings.

Question 7

Property, plant and equipment includes items that:

Accepted Answer

A)  have no physical substance. 
B)  are held for resale. 
C)  held for rental to others. 
D)  are expected to be used up within one year from date of purchase. 
A)  have no physical substance. 
B)  are held for resale. 
C)  held for rental to others. 
D)  are expected to be used up within one year from date of purchase.

Exam 5: Property, Plant and Equipment

When applying the revaluation measurement model to assets, the model:

The cost of property, plant and equipment is only recognised as an asset if it is probable that the future economic benefits will flow to the entity and:

Under the cost model, after initial recognition of a property, plant and equipment asset the item must be carried at its:

The resulting gain or loss from the sale of a non-current asset is:

Wombat Limited applies the straight-line method of depreciation to its non-current assets. The cost of the buildings was $400 000, the depreciable amount is $350 000, the residual value is $50 000 and the useful life is 10 years. The annual depreciation charge is:

Tully Limited had an existing revaluation surplus in respect to an item of plant that has now been derecognised. The appropriate journal entry to transfer the surplus to retained earnings would include:

Property, plant and equipment includes items that:

Accounting Regulation and the Conceptual Framework

Application of Accounting Theory

Fair Value Measurement

Inventories

Intangible Assets

Impairment of Assets

Provisions, Contingent Liabilities and Contingent Assets

Employee Benefits

Leases

Financial Instruments

Income Taxes

Share Capital and Reserves

Share Based Payment

Revenue

Presentation of Financial Statements

Statement of Cash Flows

Accounting Policies and Other Disclosures

Earnings Per Share

Operating Segments

Related Party Disclosures

Sustainability and Corporate Social Responsibility Recording

Foreign Currency Transactions and Forward Exchange Contracts

Translation of Foreign Currency Financial Statements

Business Combinations

Consolidation: Controlled Entities

Consolidation: Wholly Owned Entities

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Joint Arrangements

Insolvency and Liquidation

Accounting for Mineral Resources

Agriculture

Filters