Question 1

EPS refers to:

Accepted Answer

A)  equity per share 
B)  earnings per shareholder 
C)  earnings per share 
D)  earnings per subsidiary 
A)  equity per share 
B)  earnings per shareholder 
C)  earnings per share 
D)  earnings per subsidiary

Question 2

A company issues bonus shares for no consideration on 1 August 2014. For the reporting period ended 30 June 2015, the calculation of:

Accepted Answer

A)  only basic earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements 
B)  only the diluted earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements 
C)  both basic earnings per share and diluted earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements 
D)  both basic earnings per share and diluted earnings per share may be adjusted retrospectively at the option of the entity for all periods that are presented in the financial statements 
A)  only basic earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements 
B)  only the diluted earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements 
C)  both basic earnings per share and diluted earnings per share must be adjusted retrospectively for all periods that are presented in the financial statements 
D)  both basic earnings per share and diluted earnings per share may be adjusted retrospectively at the option of the entity for all periods that are presented in the financial statements

Question 3

Paragraphs 70-73 of IAS 33 prescribe various disclosures relating to earnings per share. The disclosures include: I the amounts used as the numerators (earnings) in the ratios
II a reconciliation of the earnings amounts to the profit or loss attributable to the parent entity for the period including the individual effect of each class of instruments that affects earnings per share
III the number of ordinary shares outstanding at the end of the financial year
IV the weighted average number of ordinary shares used as the denominator in the ratios

Accepted Answer

A)  I, II and III 
B)  I, III and IV 
C)  II, III and IV 
D)  I, II and IV 
A)  I, II and III 
B)  I, III and IV 
C)  II, III and IV 
D)  I, II and IV

Question 4

Earnings per share is calculated by comparing an entity's:

Accepted Answer

A)  revenue with the number of ordinary shares it has on issue 
B)  profit with the number of shareholders 
C)  profit with the number of ordinary shares it has on issue 
D)  revenue with the number of shareholders 
A)  revenue with the number of ordinary shares it has on issue 
B)  profit with the number of shareholders 
C)  profit with the number of ordinary shares it has on issue 
D)  revenue with the number of shareholders

Question 5

Willow Limited and Rupert Limited are the two subsidiaries of Buffy Company. Dan Sanders, one of the directors of Buffy Company, is also a director of Rupert Limited. Dan's wife, Sandra, has 10% of shareholding in Rupert Limited. Which of the followings are related parties to Willow Limited?

Accepted Answer

A)  Buffy Company and Dan Sanders; 
B)  Buffy Company and Rupert Limited; 
C)  Rupert Limited and Dan Sanders; 
D)  Dan Sanders and Sandra Sanders. 
A)  Buffy Company and Dan Sanders; 
B)  Buffy Company and Rupert Limited; 
C)  Rupert Limited and Dan Sanders; 
D)  Dan Sanders and Sandra Sanders.

Question 6

Aladdin is the owner and founder of Genie Limited. Aladdin's wife, Jasmine, has a controlling investment in Jafar Limited. Which of the followings describes the relationship between Genie Limited and Jafar Limited?

Accepted Answer

A)  Genie Limited and Jafar Limited are not related parties. 
B)  No disclosure about transactions with Jafar Limited is required in the financial statements of Genie Limited. 
C)  Genie Limited is a related party of Jafar Limited. 
D)  Genie Limited has control over Jafar Limited. 
A)  Genie Limited and Jafar Limited are not related parties. 
B)  No disclosure about transactions with Jafar Limited is required in the financial statements of Genie Limited. 
C)  Genie Limited is a related party of Jafar Limited. 
D)  Genie Limited has control over Jafar Limited.

Question 7

The contractually agreed sharing of control over an economic entity is known as:

Accepted Answer

A)  significant influence; 
B)  significant control; 
C)  joint control; 
D)  joint venture. 
A)  significant influence; 
B)  significant control; 
C)  joint control; 
D)  joint venture.

Question 8

Mary Ltd determined its profit attributable to ordinary shareholders for the reporting period ended 30 June 2016 as £720 000. The number of ordinary shares on issue up to 31 October 2015 was 50 000. Mary Ltd announced a two-for-one bonus issue of shares effective for each ordinary share outstanding at 31 October 2015. Basic earnings per share at 30 June 2016 is:

Accepted Answer

A)  £4.80 
B)  £6.17 
C)  £7.20 
D)  £9.60 
A)  £4.80 
B)  £6.17 
C)  £7.20 
D)  £9.60

Question 9

David is the general manager of Awesome Limited and is considered to be the member of key management personnel. The following transactions occurred between David and Awesome Limited: 
F1F1F1S1?F1F1F10David purchased a product of Awesome Limited on normal trading terms;
F1F1F1S1?F1F1F10David received remuneration from Awesome Limited amounting to £100 000;
F1F1F1S1?F1F1F10Awesome Limited issued 20 000 options to David, which can be converted into Awesome Limited's shares if target profit margin of 25% is achieved in the next three years.
Which of the above transactions must be disclosed as related party transactions?

Accepted Answer

A)  The purchase of product and David's remuneration. 
B)  David's remuneration and the grant of options. 
C)  The purchase of product and the grant of options. 
D)  All of the above transactions are related party transactions. 
A)  The purchase of product and David's remuneration. 
B)  David's remuneration and the grant of options. 
C)  The purchase of product and the grant of options. 
D)  All of the above transactions are related party transactions.

Question 10

The profit or loss that is used in the calculation of basic earnings per share is calculated as:

Accepted Answer

A)  Profit before tax expense 
B)  Profit before tax expense - tax expense 
C)  Profit before tax expense - tax expense - ordinary dividends 
D)  Profit before tax expense - tax expense - preference dividends 
A)  Profit before tax expense 
B)  Profit before tax expense - tax expense 
C)  Profit before tax expense - tax expense - ordinary dividends 
D)  Profit before tax expense - tax expense - preference dividends

Question 11

Drew is one of the directors of Mellor Limited. In the current financial year, Mellor Limited paid £50 000 to Advice Agency, where Drew's brother works, for the consultancy services it provided. In addition, Mellor Limited also paid £2000 to Drew for a once-off consultancy he provided on a specific project. Which of the following statements describes the relationship between Drew, Mellor Limited, and Advice Agency?

Accepted Answer

A)  Advice Agency is a related party to Mellor Limited. 
B)  Drew is not a related party to Mellor Limited. 
C)  The £50 000 consultancy fee is not a related party transaction. 
D)  The £2000 consultancy fee is not a related party transaction. 
A)  Advice Agency is a related party to Mellor Limited. 
B)  Drew is not a related party to Mellor Limited. 
C)  The £50 000 consultancy fee is not a related party transaction. 
D)  The £2000 consultancy fee is not a related party transaction.

Question 12

Jon holds an investment in Voight Limited that gives him a significant influence over the company. Jon's daughter, Angelina, also has a significant influence over another entity, Jolie Limited. What is the relationship between Voight Limited and Jolie Limited?

Accepted Answer

A)  Voight Limited is a related party of Jolie Limited. 
B)  Voight Limited has a significant influence over Jolie Limited. 
C)  Voight Limited and Jolie Limited are not related parties. 
D)  Voight Limited has control over Jolie Limited. 
A)  Voight Limited is a related party of Jolie Limited. 
B)  Voight Limited has a significant influence over Jolie Limited. 
C)  Voight Limited and Jolie Limited are not related parties. 
D)  Voight Limited has control over Jolie Limited.

Question 13

According to IAS 24, related party disclosures are required irrespective of whether there have been related party transactions when:

Accepted Answer

A)  significant influence exists; 
B)  control exists; 
C)  economic dependence exists; 
D)  all of the above. 
A)  significant influence exists; 
B)  control exists; 
C)  economic dependence exists; 
D)  all of the above.

Question 14

XYZ Ltd has 10 000 ordinary shares on issue at 1 July 2015 which is the beginning of its reporting period. On 1 May 2016, it issued a further 2000 ordinary shares for cash. The weighted average number of shares for use in the earnings per share calculation is:

Accepted Answer

A)  10 000 shares 
B)  10 333 shares 
C)  11 000 shares 
D)  12 000 shares 
A)  10 000 shares 
B)  10 333 shares 
C)  11 000 shares 
D)  12 000 shares

Question 15

Metro Limited is a subsidiary of Matrix Limited. Which of the followings is not a related party to Metro Limited?

Accepted Answer

A)  A pension scheme that offers benefits to employees of Metro Limited. 
B)  The Managing Director of Matrix Limited. 
C)  An associate of Metro Limited. 
D)  A distributor of Metro Limited's products. 
A)  A pension scheme that offers benefits to employees of Metro Limited. 
B)  The Managing Director of Matrix Limited. 
C)  An associate of Metro Limited. 
D)  A distributor of Metro Limited's products.

Question 16

Two entities are not regarded as related parties simply because:

Accepted Answer

A)  one entity is a post- employment benefit plan for the other entity; 
B)  one entity is a subsidiary of the other entity; 
C)  a member of the key management personnel of one entity controls the other entity; 
D)  a member of the key management personnel of one entity has significant influence over the other entity. 
A)  one entity is a post- employment benefit plan for the other entity; 
B)  one entity is a subsidiary of the other entity; 
C)  a member of the key management personnel of one entity controls the other entity; 
D)  a member of the key management personnel of one entity has significant influence over the other entity.

Question 17

VicEd is a government agency that controls Science Limited. Science Limited has two subsidiaries: Bio Limited and Chem Limited. To which entities can Bio Limited apply the disclosure exemption in paragraph 25 of IAS 24?

Accepted Answer

A)  VicEd Limited only; 
B)  Science Limited only; 
C)  Science Limited and Chem Limited only; 
D)  VicEd Limited, Science Limited, and Chem Limited. 
A)  VicEd Limited only; 
B)  Science Limited only; 
C)  Science Limited and Chem Limited only; 
D)  VicEd Limited, Science Limited, and Chem Limited.

Question 18

Which of the followings are most likely to be considered as key management personnel of an entity?
 I) Chief Financial Officer
II) Admin Officer
III) Non-executive directors
IV) General Manager

Accepted Answer

A)  I, II, and III; 
B)  II, III, and IV; 
C)  I, III, and IV; 
D)  I, II, III, and IV. 
A)  I, II, and III; 
B)  II, III, and IV; 
C)  I, III, and IV; 
D)  I, II, III, and IV.

Question 19

IAS 33 applies to the computation and presentation of earnings per share by:

Accepted Answer

A)  only reporting entities whose shares are publicly traded 
B)  reporting entities whose shares are publicly traded, or of entities that are in the process of issuing ordinary shares that will be traded in public markets 
C)  only those entities that are in the process of issuing ordinary shares that will be traded in public markets 
D)  both reporting and non-reporting entities 
A)  only reporting entities whose shares are publicly traded 
B)  reporting entities whose shares are publicly traded, or of entities that are in the process of issuing ordinary shares that will be traded in public markets 
C)  only those entities that are in the process of issuing ordinary shares that will be traded in public markets 
D)  both reporting and non-reporting entities

Question 20

Maria is one of the directors in Leo Limited, which is one the subsidiaries of Aries Limited. She also has a joint control with Mimi in Virgo Limited. In this circumstance, the followings are related parties to Leo Limited, except for:

Accepted Answer

A)  Mimi; 
B)  Maria; 
C)  Aries Limited; 
D)  Virgo Limited. 
A)  Mimi; 
B)  Maria; 
C)  Aries Limited; 
D)  Virgo Limited.

Exam 15: Other Key Notes Disclosures

EPS refers to:

A company issues bonus shares for no consideration on 1 August 2014. For the reporting period ended 30 June 2015, the calculation of:

Earnings per share is calculated by comparing an entity's:

Willow Limited and Rupert Limited are the two subsidiaries of Buffy Company. Dan Sanders, one of the directors of Buffy Company, is also a director of Rupert Limited. Dan's wife, Sandra, has 10% of shareholding in Rupert Limited. Which of the followings are related parties to Willow Limited?

Aladdin is the owner and founder of Genie Limited. Aladdin's wife, Jasmine, has a controlling investment in Jafar Limited. Which of the followings describes the relationship between Genie Limited and Jafar Limited?

The contractually agreed sharing of control over an economic entity is known as:

The profit or loss that is used in the calculation of basic earnings per share is calculated as:

Jon holds an investment in Voight Limited that gives him a significant influence over the company. Jon's daughter, Angelina, also has a significant influence over another entity, Jolie Limited. What is the relationship between Voight Limited and Jolie Limited?

According to IAS 24, related party disclosures are required irrespective of whether there have been related party transactions when:

XYZ Ltd has 10 000 ordinary shares on issue at 1 July 2015 which is the beginning of its reporting period. On 1 May 2016, it issued a further 2000 ordinary shares for cash. The weighted average number of shares for use in the earnings per share calculation is:

Metro Limited is a subsidiary of Matrix Limited. Which of the followings is not a related party to Metro Limited?

Two entities are not regarded as related parties simply because:

VicEd is a government agency that controls Science Limited. Science Limited has two subsidiaries: Bio Limited and Chem Limited. To which entities can Bio Limited apply the disclosure exemption in paragraph 25 of IAS 24?

Which of the followings are most likely to be considered as key management personnel of an entity? I) Chief Financial Officer II) Admin Officer III) Non-executive directors IV) General Manager

IAS 33 applies to the computation and presentation of earnings per share by:

Maria is one of the directors in Leo Limited, which is one the subsidiaries of Aries Limited. She also has a joint control with Mimi in Virgo Limited. In this circumstance, the followings are related parties to Leo Limited, except for:

The Iasb and Its Conceptual Framework

Owners Equity: Share Capital and Reserves

Fair Value Measurement

Revenue From Contracts With Customers

Provisions, Contingent Liabilities and Contingent Assets

Financial Instruments

Share-Based Payment

Inventories

Employee Benefits

Leases

Impairment of Assets

Financial Statement Presentation

Statement of Cash Flows

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Translation of the Financial Statements of Foreign Entities

Agriculture

Associates and Joint Ventures

Joint Arrangements

Revenue From Contracts With Customers

Financial Instruments

Financial Instruments

Share-Based Payment

Exploration for and Evaluation of Mineral Resources

Filters