Question 1

The statement regarding IAS 11/AASB 111 'Construction Contracts 'that is not true with respect to revenue recognition is:

Accepted Answer

A) The standard adopts the 'stage of completion' method 
B) It is recommended that revenues and associated costs be recognised only when they can be 'clearly estimated' 
C) Revenues and expenses are recognised in the financial years in which the construction activities are performed 
D) None of the above,i.e.all are true statements 
A) The standard adopts the 'stage of completion' method 
B) It is recommended that revenues and associated costs be recognised only when they can be 'clearly estimated' 
C) Revenues and expenses are recognised in the financial years in which the construction activities are performed 
D) None of the above,i.e.all are true statements

Question 2

Where revenue is not recognised until cash is received it is possible that the revenue recognition criteria 'substantial completion' has not been met prior to this event.

Accepted Answer

A) True 
 B)False

Question 3

Which of these is not a suggestion of the IASB/FASB joint project on financial statement presentation?

Accepted Answer

A) Multiple income statements 
B) Separate disclosure of performance and remeasurement 
C) The fact that an item is not realised will not preclude it from being included in the income statement 
D) All are suggestions 
A) Multiple income statements 
B) Separate disclosure of performance and remeasurement 
C) The fact that an item is not realised will not preclude it from being included in the income statement 
D) All are suggestions

Question 4

The criteria that is not included in the Framework's definition of income is:

Accepted Answer

A) An increase in economic benefits 
B) The economic benefits are in the form of increases in assets or reductions in liabilities of the entity (not resulting from equity contributions) 
C) The economic benefit results from transactions or events that constitute the entities ongoing major or central operations 
D) The benefits result in an increase in equity during the period 
A) An increase in economic benefits 
B) The economic benefits are in the form of increases in assets or reductions in liabilities of the entity (not resulting from equity contributions) 
C) The economic benefit results from transactions or events that constitute the entities ongoing major or central operations 
D) The benefits result in an increase in equity during the period

Question 5

Revenue is directly related to the monetary event of value increasing in the firm.

Accepted Answer

A) True 
 B)False

Question 6

Under the Framework the statement concerning gains that is incorrect is:

Accepted Answer

A) Income is defined to include both revenue and gains 
B) Gains that meet the definition of income always arise outside the course of ordinary operations 
C) The definition of income includes unrealised gains 
D) None of the statements is incorrect 
A) Income is defined to include both revenue and gains 
B) Gains that meet the definition of income always arise outside the course of ordinary operations 
C) The definition of income includes unrealised gains 
D) None of the statements is incorrect

Question 7

Explain and comment on the behavioural view of revenue.

Accepted Answer

The behavioural view of revenue focuses

Question 8

In determining whether a sale has taken place consideration should only be given to the legal form of the contract of sale.

Accepted Answer

A) True 
 B)False

Question 9

According to Myers,Paton and Littleton when do revenue and profit accrue in the earnings process for a clothing manufacturer?

Accepted Answer

A) Purchase of the raw materials (cloth,thread etc. ) 
B) Completion of the piece of clothing for sale 
C) Sale of the clothing to a retail store on credit 
D) All of the above 
A) Purchase of the raw materials (cloth,thread etc. ) 
B) Completion of the piece of clothing for sale 
C) Sale of the clothing to a retail store on credit 
D) All of the above

Question 10

If revenue for 2010 is understated then:

Accepted Answer

A) Profit for 2010 is understated and net assets are overstated 
B) Profit for 2010 is overstated and net assets are overstated 
C) Profit for 2010 is understated and net assets are understated 
D) None of the above 
A) Profit for 2010 is understated and net assets are overstated 
B) Profit for 2010 is overstated and net assets are overstated 
C) Profit for 2010 is understated and net assets are understated 
D) None of the above

Question 11

Understatement of revenue is regarded as a greater problem by auditors than overstatement of revenue.

Accepted Answer

A) True 
 B)False

The statement regarding IAS 11/AASB 111 'Construction Contracts 'that is not true with respect to revenue recognition is:

Where revenue is not recognised until cash is received it is possible that the revenue recognition criteria 'substantial completion' has not been met prior to this event.

Which of these is not a suggestion of the IASB/FASB joint project on financial statement presentation?

The criteria that is not included in the Framework's definition of income is:

Revenue is directly related to the monetary event of value increasing in the firm.

Under the Framework the statement concerning gains that is incorrect is:

Explain and comment on the behavioural view of revenue.

In determining whether a sale has taken place consideration should only be given to the legal form of the contract of sale.

According to Myers,Paton and Littleton when do revenue and profit accrue in the earnings process for a clothing manufacturer?

If revenue for 2010 is understated then:

Understatement of revenue is regarded as a greater problem by auditors than overstatement of revenue.

Introduction

Accounting Theory Construction

Role of Theory in Accounting Regulation

Theory Underpinning Accounting Standards

Measurement

Accounting Measurement Systems

Assets

Liabilities and Owners Equity

Expenses

Positive Theory of Accounting Policy and Disclosure

Capital Market Research

Behavioural Research

Emerging Issues in Accounting and Auditing

Filters

Exam 9: Revenue

The statement regarding IAS 11/AASB 111 'Construction Contracts 'that is not true with respect to revenue recognition is:

Where revenue is not recognised until cash is received it is possible that the revenue recognition criteria 'substantial completion' has not been met prior to this event.

Which of these is not a suggestion of the IASB/FASB joint project on financial statement presentation?

The criteria that is not included in the Framework's definition of income is:

Revenue is directly related to the monetary event of value increasing in the firm.

Under the Framework the statement concerning gains that is incorrect is:

Explain and comment on the behavioural view of revenue.

In determining whether a sale has taken place consideration should only be given to the legal form of the contract of sale.

According to Myers,Paton and Littleton when do revenue and profit accrue in the earnings process for a clothing manufacturer?

If revenue for 2010 is understated then:

Understatement of revenue is regarded as a greater problem by auditors than overstatement of revenue.

Introduction

Accounting Theory Construction

Role of Theory in Accounting Regulation

Theory Underpinning Accounting Standards

Measurement

Accounting Measurement Systems

Assets

Liabilities and Owners Equity

Expenses

Positive Theory of Accounting Policy and Disclosure

Capital Market Research

Behavioural Research

Emerging Issues in Accounting and Auditing

Filters