Question 1

The term "provision" as it is used in IAS 37, is most closely related to what term in U.S.GAAP?

Accepted Answer

A) Contingent liability, where the outflow of resources is "remote." 
B) Contingent liability, where the outflow of resources is "probable." 
C) Current liability, where the outflow is difficult to measure. 
D) Reserve for bad debt, where the amount recoverable is "uncertain." 
A) Contingent liability, where the outflow of resources is "remote." 
B) Contingent liability, where the outflow of resources is "probable." 
C) Current liability, where the outflow is difficult to measure. 
D) Reserve for bad debt, where the amount recoverable is "uncertain." B

Question 2

Which of the following represents a difference in the classification of current liabilities between IFRS and U.S.GAAP?

Accepted Answer

A) Refinanced short-term debt 
B) Amounts payable on demand due to violation of debt covenants 
C) Bank overdrafts 
D) All of the above 
A) Refinanced short-term debt 
B) Amounts payable on demand due to violation of debt covenants 
C) Bank overdrafts 
D) All of the above D

Question 3

IAS 32 defines a financial instrument as:

Accepted Answer

A) the currency of a foreign country in which the enterprise does business. 
B) a certified check. 
C) any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. 
D) a recognized stock exchange. 
A) the currency of a foreign country in which the enterprise does business. 
B) a certified check. 
C) any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. 
D) a recognized stock exchange. C

Question 4

Zenith Company, a calendar-year entity, amends its defined benefit pension plan on January 1, 2013 and must recognize the increase in past service costs of its vested and non-vested employees as of that date in the calculation of its net 2013 pension expense (or revenue). The pertinent facts as of January 1, 2013 are:$\begin{array}{llcc}
  \text { Increase in PSC-vested employees: } & \$5,000 \
 \text {Increase in PSC-non-vested employees:  } &\$2,000\
 \text {Remaining vesting period-non-vested employees:  } & \text {5 years}\
 \text {Remaining working life-vested employees:  } &\text {10 years}\
 \text {Remaining working life-non-vested employees:  } &\text {20 years}\

\end{array}$

-Calculate the past service costs included in 2013 net pension expense (or revenue) under IAS 19.

Accepted Answer

A) $5,100 
B) $5,400 
C) $600 
D) $7,000 
A) $5,100 
B) $5,400 
C) $600 
D) $7,000

Question 5

IAS 18, Revenue, covers which types of revenues?

Accepted Answer

A) Sale of goods 
B) Rendering of services 
C) Interest, royalties, and dividends 
D) All of the above 
A) Sale of goods 
B) Rendering of services 
C) Interest, royalties, and dividends 
D) All of the above

Question 6

Under IAS 32, which of the following is a financial liability?

Accepted Answer

A) A payable 
B) A bank loan 
C) An intercompany loan payable 
D) All of the above 
A) A payable 
B) A bank loan 
C) An intercompany loan payable 
D) All of the above

Question 7

Under IAS 39, Financial Instruments: Recognition and Measurement, which of the following is NOT a category into which a financial asset must be classified?

Accepted Answer

A) Property, plant, and equipment 
B) Held-to-maturity investments 
C) Loans and receivables 
D) Available-for-sale financial assets 
A) Property, plant, and equipment 
B) Held-to-maturity investments 
C) Loans and receivables 
D) Available-for-sale financial assets

Question 8

Under IFRS 2, with respect to cash-settled share-based payments, when an employee has received stock appreciation rights, how is the fair value of those rights measured?

Accepted Answer

A) Using the consolidation method 
B) Using an option pricing model 
C) Using the dividend discount approach 
D) All of the above 
A) Using the consolidation method 
B) Using an option pricing model 
C) Using the dividend discount approach 
D) All of the above

Question 9

Which of the following statements is true of IAS 19?

Accepted Answer

A) It establishes guidance for measuring onerous contract. 
B) It requires all past service costs to be recognized in net income in a subsequent period in which the benefit plan is changed. 
C) Its revised version became effective in the year 2013. 
D) It covers all employee benefits including share-based compensation. 
A) It establishes guidance for measuring onerous contract. 
B) It requires all past service costs to be recognized in net income in a subsequent period in which the benefit plan is changed. 
C) Its revised version became effective in the year 2013. 
D) It covers all employee benefits including share-based compensation.

Question 10

Under IAS 18, which of the following is an example of retention of significant risks and rewards by the seller?

Accepted Answer

A) The buyer has no right to rescind the purchase. 
B) The seller is under no obligation for satisfactory performance not covered by normal warranties. 
C) Goods are sold subject to installation, but installation is not a significant part of the contract and has not yet been completed. 
D) Receipt of revenue by the seller is contingent on the buyer generating revenue through its sale of the goods. 
A) The buyer has no right to rescind the purchase. 
B) The seller is under no obligation for satisfactory performance not covered by normal warranties. 
C) Goods are sold subject to installation, but installation is not a significant part of the contract and has not yet been completed. 
D) Receipt of revenue by the seller is contingent on the buyer generating revenue through its sale of the goods.

Question 11

How should stock options be accounted for under IASB standard on stock options (IFRS 2)?

Accepted Answer

A) Since their value is not determinable until a future date, they are not recorded, but only disclosed in the notes to the financial statements. 
B) A compensation expense is recorded based on the value of the options expected to vest as of the date the options are granted. 
C) An expense is recorded only if a market value for the options exists on the date the options are granted. 
D) The options are recorded as a liability for the value of the stock at the exercise date. 
A) Since their value is not determinable until a future date, they are not recorded, but only disclosed in the notes to the financial statements. 
B) A compensation expense is recorded based on the value of the options expected to vest as of the date the options are granted. 
C) An expense is recorded only if a market value for the options exists on the date the options are granted. 
D) The options are recorded as a liability for the value of the stock at the exercise date.

Question 12

How does U.S.GAAP differ from IFRS with respect to cash-settled share-based payments?

Accepted Answer

A) U.S.GAAP always treats such payments as a liability. 
B) U.S.GAAP offers the option to treat such payments as either a liability or equity. 
C) IFRS and U.S.GAAP follow the same approach with respect to such payments. 
D) U.S.GAAP, under certain circumstances, may treat such payments as equity. 
A) U.S.GAAP always treats such payments as a liability. 
B) U.S.GAAP offers the option to treat such payments as either a liability or equity. 
C) IFRS and U.S.GAAP follow the same approach with respect to such payments. 
D) U.S.GAAP, under certain circumstances, may treat such payments as equity.

Question 13

With respect to post-employment medical benefits, U.S.GAAP:

Accepted Answer

A) does not recognize the concept of post-employment medical benefits. 
B) has considerably less guidance than IAS 19. 
C) follows the guidance of IAS 19. 
D) has considerably more guidance than IAS 19. 
A) does not recognize the concept of post-employment medical benefits. 
B) has considerably less guidance than IAS 19. 
C) follows the guidance of IAS 19. 
D) has considerably more guidance than IAS 19.

Question 14

Under IAS 1, Presentation of Financial Statements, which of the following is NOT a criterion in the definition of a current liability?

Accepted Answer

A) It is a liability that is expected to be settled in an entity's normal operating cycle. 
B) It is a liability primarily held for the purpose of trading. 
C) It is a liability that does not have the right to defer until 18 months after the balance sheet date. 
D) It is a liability that is expected to be settled within 12 months of the balance sheet date. 
A) It is a liability that is expected to be settled in an entity's normal operating cycle. 
B) It is a liability primarily held for the purpose of trading. 
C) It is a liability that does not have the right to defer until 18 months after the balance sheet date. 
D) It is a liability that is expected to be settled within 12 months of the balance sheet date.

Question 15

Under IAS 12, Income Taxes, how is the relationship between a hypothetical tax expense based on statutory rates and reported tax expense based on the effective tax rate explained?

Accepted Answer

A) A numerical reconciliation between tax expense based on the statutory rate in the home country and tax expense based on the effective tax rate must be presented. 
B) A numerical reconciliation between tax expense based on the weighted-average statutory rate across jurisdictions in which the company pays income taxes and tax expense based on the effective tax rate must be presented. 
C) Both (
A)  and (
B)  can be acceptable explanations. 
D) Neither (
A)  nor (
B)  are acceptable explanations. 
A) A numerical reconciliation between tax expense based on the statutory rate in the home country and tax expense based on the effective tax rate must be presented. 
B) A numerical reconciliation between tax expense based on the weighted-average statutory rate across jurisdictions in which the company pays income taxes and tax expense based on the effective tax rate must be presented. 
C) Both (
A)  and (
B)  can be acceptable explanations. 
D) Neither (
A)  nor (
B)  are acceptable explanations.

Question 16

Under U.S.GAAP, when new debt is issued for old debt:

Accepted Answer

A) extinguishment costs are deferred and amortized over the term of the new debt. 
B) debt extinguishment costs are expensed as incurred. 
C) modification costs are amortized over the term of the old debt. 
D) old debt is not extinguished and new debt is recognized. 
A) extinguishment costs are deferred and amortized over the term of the new debt. 
B) debt extinguishment costs are expensed as incurred. 
C) modification costs are amortized over the term of the old debt. 
D) old debt is not extinguished and new debt is recognized.

Question 17

Under IAS 1, Presentation of Financial Statements, how must deferred taxes be classified on the balance sheet?

Accepted Answer

A) As either a current asset or a current liability 
B) As always a noncurrent asset or a noncurrent liability 
C) As either a current or noncurrent asset or liability based on the expected timing of realization 
D) As a separately stated positive or negative component of equity 
A) As either a current asset or a current liability 
B) As always a noncurrent asset or a noncurrent liability 
C) As either a current or noncurrent asset or liability based on the expected timing of realization 
D) As a separately stated positive or negative component of equity

Question 18

What is the journal entry required to recognize a deferred tax asset of $50,000?

Accepted Answer

A) Dr.Deferred Tax Asset $50,000, Cr.Income Tax Benefit $50,000 
B) Dr.Deferred Tax Asset $50,000, Cr.Equity $50,000 
C) Dr.Income Tax Expense $50,000, Cr.Deferred Tax Asset $50,000 
D) Dr.Deferred Tax Asset $50,000, Cr.Deferred Tax Liability $50,000 
A) Dr.Deferred Tax Asset $50,000, Cr.Income Tax Benefit $50,000 
B) Dr.Deferred Tax Asset $50,000, Cr.Equity $50,000 
C) Dr.Income Tax Expense $50,000, Cr.Deferred Tax Asset $50,000 
D) Dr.Deferred Tax Asset $50,000, Cr.Deferred Tax Liability $50,000

Question 19

Which of the following statements is true of the treatment of actuarial gains and losses under IFRS and U.S.GAAP?

Accepted Answer

A) IFRS requires the disclosure of actuarial gains and losses in the notes to financial statements. 
B) IFRS requires immediate recognition of actuarial gains and losses in net income. 
C) U.S.GAAP allows a choice between immediate recognition in other comprehensive income or in net income. 
D) U.S.GAAP requires the actuarial gains and losses to be recognized immediately through other comprehensive income. 
A) IFRS requires the disclosure of actuarial gains and losses in the notes to financial statements. 
B) IFRS requires immediate recognition of actuarial gains and losses in net income. 
C) U.S.GAAP allows a choice between immediate recognition in other comprehensive income or in net income. 
D) U.S.GAAP requires the actuarial gains and losses to be recognized immediately through other comprehensive income.

Question 20

Under IAS 12, current and deferred taxes are measured on the basis of:

Accepted Answer

A) rates that have been enacted or substantively enacted by the balance sheet date. 
B) current rates and rates anticipated when temporary differences reverse. 
C) rates anticipated when temporary differences reverse. 
D) rates prevailing when the entity provided goods or services. 
A) rates that have been enacted or substantively enacted by the balance sheet date. 
B) current rates and rates anticipated when temporary differences reverse. 
C) rates anticipated when temporary differences reverse. 
D) rates prevailing when the entity provided goods or services.

The term "provision" as it is used in IAS 37, is most closely related to what term in U.S.GAAP?

Which of the following represents a difference in the classification of current liabilities between IFRS and U.S.GAAP?

IAS 32 defines a financial instrument as:

IAS 18, Revenue, covers which types of revenues?

Under IAS 32, which of the following is a financial liability?

Under IAS 39, Financial Instruments: Recognition and Measurement, which of the following is NOT a category into which a financial asset must be classified?

Under IFRS 2, with respect to cash-settled share-based payments, when an employee has received stock appreciation rights, how is the fair value of those rights measured?

Which of the following statements is true of IAS 19?

Under IAS 18, which of the following is an example of retention of significant risks and rewards by the seller?

How should stock options be accounted for under IASB standard on stock options (IFRS 2)?

How does U.S.GAAP differ from IFRS with respect to cash-settled share-based payments?

With respect to post-employment medical benefits, U.S.GAAP:

Under IAS 1, Presentation of Financial Statements, which of the following is NOT a criterion in the definition of a current liability?

Under IAS 12, Income Taxes, how is the relationship between a hypothetical tax expense based on statutory rates and reported tax expense based on the effective tax rate explained?

Under U.S.GAAP, when new debt is issued for old debt:

Under IAS 1, Presentation of Financial Statements, how must deferred taxes be classified on the balance sheet?

What is the journal entry required to recognize a deferred tax asset of $50,000?

Which of the following statements is true of the treatment of actuarial gains and losses under IFRS and U.S.GAAP?

Under IAS 12, current and deferred taxes are measured on the basis of:

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

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Exam 5: International Financial Reporting Standards: Part II

The term "provision" as it is used in IAS 37, is most closely related to what term in U.S.GAAP?

Which of the following represents a difference in the classification of current liabilities between IFRS and U.S.GAAP?

IAS 32 defines a financial instrument as:

IAS 18, Revenue, covers which types of revenues?

Under IAS 32, which of the following is a financial liability?

Under IAS 39, Financial Instruments: Recognition and Measurement, which of the following is NOT a category into which a financial asset must be classified?

Under IFRS 2, with respect to cash-settled share-based payments, when an employee has received stock appreciation rights, how is the fair value of those rights measured?

Which of the following statements is true of IAS 19?

Under IAS 18, which of the following is an example of retention of significant risks and rewards by the seller?

How should stock options be accounted for under IASB standard on stock options (IFRS 2)?

How does U.S.GAAP differ from IFRS with respect to cash-settled share-based payments?

With respect to post-employment medical benefits, U.S.GAAP:

Under IAS 1, Presentation of Financial Statements, which of the following is NOT a criterion in the definition of a current liability?

Under IAS 12, Income Taxes, how is the relationship between a hypothetical tax expense based on statutory rates and reported tax expense based on the effective tax rate explained?

Under U.S.GAAP, when new debt is issued for old debt:

Under IAS 1, Presentation of Financial Statements, how must deferred taxes be classified on the balance sheet?

What is the journal entry required to recognize a deferred tax asset of $50,000?

Which of the following statements is true of the treatment of actuarial gains and losses under IFRS and U.S.GAAP?

Under IAS 12, current and deferred taxes are measured on the basis of:

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters