Question 1

When first issued, IAS 39 was:

Accepted Answer

A)  More rule-based than other AASB standards 
B)  Less rule-based than other AASB standards 
C)  Wider in scope that other AASB standards 
D)  Narrower in scope that other AASB standards 
A)  More rule-based than other AASB standards 
B)  Less rule-based than other AASB standards 
C)  Wider in scope that other AASB standards 
D)  Narrower in scope that other AASB standards

Question 2

IAS 39 Financial Instruments: Recognition and Measurement, requires that 'Held-to- maturity' investments be initially measured at:

Accepted Answer

A)  fair value; 
B)  fair value plus transaction costs; 
C)  discounted future cash outflows; 
D)  discounted future net cash flows. 
A)  fair value; 
B)  fair value plus transaction costs; 
C)  discounted future cash outflows; 
D)  discounted future net cash flows.

Question 3

When accounting for a cash flow hedge, IAS 39 Financial Instruments: Recognition and Measurement, requires that hedge ineffectiveness is:

Accepted Answer

A)  recorded in profit or loss; 
B)  separately recorded in equity; 
C)  recorded separately as a financial liability; 
D)  capitalised as a deferred asset. 
A)  recorded in profit or loss; 
B)  separately recorded in equity; 
C)  recorded separately as a financial liability; 
D)  capitalised as a deferred asset.

Question 4

Company A has convertible notes on issue. These notes are convertible to ordinary shares of the Company after 3 years. The distributions made to the note holders by Company A are classified by Company A as follows:

Accepted Answer

A)  interest expense. 
B)  dividends distributed. 
C)  a portion representing interest expense and a portion representing dividends distributed 
D)  indeterminable based on the information provided. 
A)  interest expense. 
B)  dividends distributed. 
C)  a portion representing interest expense and a portion representing dividends distributed 
D)  indeterminable based on the information provided.

Question 5

Whitnall Limited lost $150 on a hedging instrument and had a corresponding gain on the hedged item of $100. The effectiveness range for the associated transactions is:

Accepted Answer

A)  100% - 150%; 
B)  20% - 30%; 
C)  0% - 15%; 
D)  66% - 150%. 
A)  100% - 150%; 
B)  20% - 30%; 
C)  0% - 15%; 
D)  66% - 150%.

Question 6

Which of the following are regarded as financial instruments:
I Deposits held by a financial institution;
II Ordinary shares;
III Raw materials inventories;
IV Property, plant and equipment.
V Accounts receivable and accounts payable.

Accepted Answer

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

Question 7

When an entity has a legally enforceable right to set off the recognised amounts of a financial asset and financial liability and it intends to settle on a net basis, it:

Accepted Answer

A)  can write off both the asset and the liability; 
B)  may offset the financial asset and liability; 
C)  is not entitled to offset the asset and liability; 
D)  need not present the asset, the liability or the net amount in its financial statements. 
A)  can write off both the asset and the liability; 
B)  may offset the financial asset and liability; 
C)  is not entitled to offset the asset and liability; 
D)  need not present the asset, the liability or the net amount in its financial statements.

Question 8

Callas Corporation Limited buys an option that entitles it to purchase 2000 shares in Maria Limited at $5 per share at any time in the next 3 months. The derivative financial instrument in this transaction is the:

Accepted Answer

A)  shares in Callas Corporation Limited; 
B)  shares in Maria Limited; 
C)  price of the shares in Maria Limited after 3 months have elapsed; 
D)  option priced at $5. 
A)  shares in Callas Corporation Limited; 
B)  shares in Maria Limited; 
C)  price of the shares in Maria Limited after 3 months have elapsed; 
D)  option priced at $5.

Question 9

The appropriate accounting treatment for incremental costs directly attributable to an equity transaction that would otherwise have been avoided is to:

Accepted Answer

A)  deduct from equity, net of tax; 
B)  add to equity, net of tax; 
C)  expense in the period incurred; 
D)  defer as a contingent asset. 
A)  deduct from equity, net of tax; 
B)  add to equity, net of tax; 
C)  expense in the period incurred; 
D)  defer as a contingent asset.

Question 10

A financial asset classified as fair value through profit and loss (FVTPL) must be:

Accepted Answer

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

When first issued, IAS 39 was:

IAS 39 Financial Instruments: Recognition and Measurement, requires that 'Held-to- maturity' investments be initially measured at:

When accounting for a cash flow hedge, IAS 39 Financial Instruments: Recognition and Measurement, requires that hedge ineffectiveness is:

Company A has convertible notes on issue. These notes are convertible to ordinary shares of the Company after 3 years. The distributions made to the note holders by Company A are classified by Company A as follows:

Whitnall Limited lost $150 on a hedging instrument and had a corresponding gain on the hedged item of $100. The effectiveness range for the associated transactions is:

Which of the following are regarded as financial instruments: I Deposits held by a financial institution; II Ordinary shares; III Raw materials inventories; IV Property, plant and equipment. V Accounts receivable and accounts payable.

When an entity has a legally enforceable right to set off the recognised amounts of a financial asset and financial liability and it intends to settle on a net basis, it:

Callas Corporation Limited buys an option that entitles it to purchase 2000 shares in Maria Limited at $5 per share at any time in the next 3 months. The derivative financial instrument in this transaction is the:

The appropriate accounting treatment for incremental costs directly attributable to an equity transaction that would otherwise have been avoided is to:

A financial asset classified as fair value through profit and loss (FVTPL) must be:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Share-Based Payments

Inventories

Employee Benefits

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

Exam 7: Financial Instruments

When first issued, IAS 39 was:

IAS 39 Financial Instruments: Recognition and Measurement, requires that 'Held-to- maturity' investments be initially measured at:

When accounting for a cash flow hedge, IAS 39 Financial Instruments: Recognition and Measurement, requires that hedge ineffectiveness is:

Company A has convertible notes on issue. These notes are convertible to ordinary shares of the Company after 3 years. The distributions made to the note holders by Company A are classified by Company A as follows:

Whitnall Limited lost $150 on a hedging instrument and had a corresponding gain on the hedged item of $100. The effectiveness range for the associated transactions is:

Which of the following are regarded as financial instruments: I Deposits held by a financial institution; II Ordinary shares; III Raw materials inventories; IV Property, plant and equipment. V Accounts receivable and accounts payable.

When an entity has a legally enforceable right to set off the recognised amounts of a financial asset and financial liability and it intends to settle on a net basis, it:

Callas Corporation Limited buys an option that entitles it to purchase 2000 shares in Maria Limited at $5 per share at any time in the next 3 months. The derivative financial instrument in this transaction is the:

The appropriate accounting treatment for incremental costs directly attributable to an equity transaction that would otherwise have been avoided is to:

A financial asset classified as fair value through profit and loss (FVTPL) must be:

The Conceptual Framework of the Iasb

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Share-Based Payments

Inventories

Employee Benefits

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