Question 1

An entity is able to record a provision for termination benefits when it:

Accepted Answer

A)  has a detailed formal plan 
B)  has a definite intention of terminating employment 
C)  has received Board approval for the termination benefits 
D)  can no longer withdraw the offer of the benefits 
A)  has a detailed formal plan 
B)  has a definite intention of terminating employment 
C)  has received Board approval for the termination benefits 
D)  can no longer withdraw the offer of the benefits D

Question 2

Which of the following types of employee benefits are required to be measured at their nominal value?

Accepted Answer

A)  long service leave 
B)  defined benefit post-employment benefits 
C)  accumulating non-vesting sick leave 
D)  defined contribution employment benefits 
A)  long service leave 
B)  defined benefit post-employment benefits 
C)  accumulating non-vesting sick leave 
D)  defined contribution employment benefits C

Question 3

Benefits paid to members of a defined contribution post-employment fund are based on:

Accepted Answer

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

Question 4

The offer to pay termination benefits can no longer be withdrawn when the entity has communicated to affected employees a plan of termination that meets which of the following criteria?

Accepted Answer

A)  actions required to complete the plan indicate that significant changes to the plan are unlikely 
B)  the plan identifies the location, function or job classification, the number of employees whose services are to be terminated, and the expected completion date 
C)  the plan establishes the termination benefits payable in sufficient detail to enable employees to determine the type and amount of benefits they will receive 
D)  all of the above 
A)  actions required to complete the plan indicate that significant changes to the plan are unlikely 
B)  the plan identifies the location, function or job classification, the number of employees whose services are to be terminated, and the expected completion date 
C)  the plan establishes the termination benefits payable in sufficient detail to enable employees to determine the type and amount of benefits they will receive 
D)  all of the above

Question 5

The key difference between defined benefit and defined contributions post-employment plans is that:

Accepted Answer

A)  the employee bears the risk in a defined benefit plan, whereas the employer bears the risk in a defined contribution plan 
B)  the fund bears the risk in a defined benefit plan, whereas the employee bears the risk in a defined contribution plan 
C)  the employer bears the risk in a defined benefit plan, whereas the employee bears the risk in a defined contribution plan 
D)  the employer bears the risk in a defined benefit plan, whereas the fund bears the risk in a defined contribution plan 
A)  the employee bears the risk in a defined benefit plan, whereas the employer bears the risk in a defined contribution plan 
B)  the fund bears the risk in a defined benefit plan, whereas the employee bears the risk in a defined contribution plan 
C)  the employer bears the risk in a defined benefit plan, whereas the employee bears the risk in a defined contribution plan 
D)  the employer bears the risk in a defined benefit plan, whereas the fund bears the risk in a defined contribution plan

Question 6

Actuarial gains or losses can arise from:

Accepted Answer

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

Question 7

Which if the following is NOT an example of a short-term employee benefit?

Accepted Answer

A)  wages and salaries 
B)  termination payments 
C)  bonuses and profit-sharing arrangements 
D)  short-term compensated benefits 
A)  wages and salaries 
B)  termination payments 
C)  bonuses and profit-sharing arrangements 
D)  short-term compensated benefits

Question 8

IAS 19 requires short-term employee benefits to be measured at:

Accepted Answer

A)  future value 
B)  nominal value 
C)  present value 
D)  fair value 
A)  future value 
B)  nominal value 
C)  present value 
D)  fair value

Question 9

An enterprise bargaining agreement results from an entity entering into an agreement with:

Accepted Answer

A)  its employees 
B)  the government 
C)  the relevant industry body 
D)  the relevant employee union 
A)  its employees 
B)  the government 
C)  the relevant industry body 
D)  the relevant employee union

Question 10

IAS 19 requires an entity to record a liability for long service leave:

Accepted Answer

A)  once the employee becomes presently entitled to the leave 
B)  as the employee provides service to the entity 
C)  when the leave is taken by the employee 
D)  in a consistent manner from year to year 
A)  once the employee becomes presently entitled to the leave 
B)  as the employee provides service to the entity 
C)  when the leave is taken by the employee 
D)  in a consistent manner from year to year

Question 11

Pirate Ltd employs 5 staff. Each staff member is entitled to 20 days annual leave per annum. Leave loading of 17.5% is paid when the leave is taken. At 1 July 2013 the balance in the provision for annual leave account was $20 303.
Details of each employees leave entitlement at 30 June 2014 are as follows:
 
There are 260 work days in a year. On 1 July each year all employees receive a 5% wage rise. There are no other wage rises given during the year.
The closing balance in the provision for annual leave account at 30 June 2014 is:

Accepted Answer

A)  $18 712 
B)  $19 647 
C)  $23 086 
D)  $27 221 
A)  $18 712 
B)  $19 647 
C)  $23 086 
D)  $27 221

Question 12

An increase in the present value of a defined benefit obligation resulting from employee service in the current period is referred to as:

Accepted Answer

A)  the current service cost 
B)  the past service cost 
C)  the interest cost 
D)  an actuarial gain or loss 
A)  the current service cost 
B)  the past service cost 
C)  the interest cost 
D)  an actuarial gain or loss

Question 13

Carpenter Ltd has 6 employees, who are each paid $750 per week for a 5 day working week. Each employee is entitled to 8 days accumulating non-vesting sick leave per year.
At 1 July 2013 the accumulated untaken leave was 14 days in total. During the year ended 30 June 2014 a total of 50 days sick leave was taken, of which 12 days were unpaid leave.
Of the accumulated untaken leave at 30 June 2014 it is estimated that 75% of it will be taken during the following year.
The balance of the provision for sick leave at 30 June 2014 is:

Accepted Answer

A)  $1350 
B)  $3600 
C)  $2700 
D)  NIL, as the leave is non-vesting 
A)  $1350 
B)  $3600 
C)  $2700 
D)  NIL, as the leave is non-vesting

Question 14

Which of the following obligations do NOT arise from past services provided by an employee?

Accepted Answer

A)  short-term compensated absences 
B)  termination benefits 
C)  other long-term employee benefits 
D)  post-employment benefits 
A)  short-term compensated absences 
B)  termination benefits 
C)  other long-term employee benefits 
D)  post-employment benefits

Question 15

Determining an entity's liability for long service leave requires estimation of:

Accepted Answer

A)  when the leave will be taken 
B)  projected salary levels 
C)  proportion of employees who will become entitled to the leave 
D)  all of the above. 
A)  when the leave will be taken 
B)  projected salary levels 
C)  proportion of employees who will become entitled to the leave 
D)  all of the above.

Question 16

An entity is required to recognise a liability for short-term compensated absences that are:

Accepted Answer

A)  accumulating and vesting 
B)  non-accumulating and vesting 
C)  non-accumulating and non-vesting 
D)  all of the above 
A)  accumulating and vesting 
B)  non-accumulating and vesting 
C)  non-accumulating and non-vesting 
D)  all of the above

Question 17

Which of the following do NOT fall within the definition of a termination benefit?

Accepted Answer

A)  employee resignation 
B)  voluntary redundancy accepted by an employee 
C)  termination of employment before the normal retirement date due to company insolvency 
D)  termination of employment before the normal retirement date due to poor performance 
A)  employee resignation 
B)  voluntary redundancy accepted by an employee 
C)  termination of employment before the normal retirement date due to company insolvency 
D)  termination of employment before the normal retirement date due to poor performance

Question 18

Employee benefits can be allocated to assets:

Accepted Answer

A)  only if it relates to the cost of an internally generated intangible 
B)  where the entity is certain the future economic benefits will flow to it 
C)  in accordance with the requirements of other accounting standards 
D)  where they meet the definition of an asset under the Conceptual Framework 
A)  only if it relates to the cost of an internally generated intangible 
B)  where the entity is certain the future economic benefits will flow to it 
C)  in accordance with the requirements of other accounting standards 
D)  where they meet the definition of an asset under the Conceptual Framework

Question 19

ABC Ltd employs 5 staff. Each staff member is entitled to 20 days annual leave per annum. Leave loading of 17.5% is paid when the leave is taken.
On 31 December 2013 Joan Rivers left the company and was paid out her untaken leave entitlements. Joan had 12 days leave owing at 1 July 2013 and took 4 days leave between 1 July and 31 December 2013. Her salary at the time of her departure was
$140 000.
There are 260 work days in a year. On 1 July each year all employees receive a 3% wage rise. There are no other wage rises given during the year.
The gross entitlement owing to Joan Rivers on 31 December 2013 was:

Accepted Answer

A)  $17 715 
B)  $9692 
C)  $5061 
D)  $11 388 
A)  $17 715 
B)  $9692 
C)  $5061 
D)  $11 388

Question 20

IAS 19 adopts which method to determining long service leave obligations?

Accepted Answer

A)  units of production method 
B)  the actuarial method 
C)  the bi-nominal method 
D)  projected unit credit method 
A)  units of production method 
B)  the actuarial method 
C)  the bi-nominal method 
D)  projected unit credit method

Exam 10: Employee Benefits

An entity is able to record a provision for termination benefits when it:

Which of the following types of employee benefits are required to be measured at their nominal value?

Benefits paid to members of a defined contribution post-employment fund are based on:

The offer to pay termination benefits can no longer be withdrawn when the entity has communicated to affected employees a plan of termination that meets which of the following criteria?

The key difference between defined benefit and defined contributions post-employment plans is that:

Actuarial gains or losses can arise from:

Which if the following is NOT an example of a short-term employee benefit?

IAS 19 requires short-term employee benefits to be measured at:

An enterprise bargaining agreement results from an entity entering into an agreement with:

IAS 19 requires an entity to record a liability for long service leave:

An increase in the present value of a defined benefit obligation resulting from employee service in the current period is referred to as:

Which of the following obligations do NOT arise from past services provided by an employee?

Determining an entity's liability for long service leave requires estimation of:

An entity is required to recognise a liability for short-term compensated absences that are:

Which of the following do NOT fall within the definition of a termination benefit?

Employee benefits can be allocated to assets:

IAS 19 adopts which method to determining long service leave obligations?

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Inventories

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Translation of the Financial Statements of Foreign Entities

Associates and Joint Ventures

Joint Arrangements

Filters