Question 1

The Framework focuses on:

Accepted Answer

A)  privately owned business entities only. 
B)  business entities only, including private and state owned business entities. 
C)  business entities, although the concepts may be applied to other types of entities, such as not-for profit entities. 
D)  all types of entities, including business entities, government and not-for profit entities. 
A)  privately owned business entities only. 
B)  business entities only, including private and state owned business entities. 
C)  business entities, although the concepts may be applied to other types of entities, such as not-for profit entities. 
D)  all types of entities, including business entities, government and not-for profit entities.

Question 2

The four principal qualitative characteristics that make information in financial statements useful to investors identified within The Framework are:

Accepted Answer

A)  Relevance, reliability, timeliness and comparability 
B)  Timeliness, reliability, relevance and understandability 
C)  Comparability, understandability, relevance and reliability 
D)  Comparability, understandability, timeliness and reliability 
A)  Relevance, reliability, timeliness and comparability 
B)  Timeliness, reliability, relevance and understandability 
C)  Comparability, understandability, relevance and reliability 
D)  Comparability, understandability, timeliness and reliability

Question 3

The qualitative characteristics that make financial information useful for decision-making include:

Accepted Answer

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

Question 4

Which of the following statements is INCORRECT?

Accepted Answer

A)  Information about the variability of profits helps in forecasting future cash flows from an entity's existing resources. 
B)  Performance of an entity is determined solely through examination of the Statement of Profit or Loss and Other Comprehensive Income of an entity. 
C)  An entity's Statement of Cash Flows provides insight into changes in assets and liability balances during an accounting period. 
D)  The Statement of Financial Position presents information relating to economic resources, the financial structure of an entity, liquidity and solvency and capacity to adapt to changes in an entity's environment. 
A)  Information about the variability of profits helps in forecasting future cash flows from an entity's existing resources. 
B)  Performance of an entity is determined solely through examination of the Statement of Profit or Loss and Other Comprehensive Income of an entity. 
C)  An entity's Statement of Cash Flows provides insight into changes in assets and liability balances during an accounting period. 
D)  The Statement of Financial Position presents information relating to economic resources, the financial structure of an entity, liquidity and solvency and capacity to adapt to changes in an entity's environment.

Question 5

The purpose of the notes to the financial statements are to:

Accepted Answer

A)  explain any resources and obligations not recognised in the Statement of Financial Position 
B)  provide information meeting the disclosure requirements under national laws or regulations. 
C)  disclose risks and uncertainties affecting the entity. 
D)  all of the above. 
A)  explain any resources and obligations not recognised in the Statement of Financial Position 
B)  provide information meeting the disclosure requirements under national laws or regulations. 
C)  disclose risks and uncertainties affecting the entity. 
D)  all of the above.

Question 6

When recognising revenue from the rendering of services in accordance with IAS 18 Revenue

Accepted Answer

A)  Revenue arising from the rendering of services can only be recognised when all of the recognition criteria in paragraph 20 have been satisfied. 
B)  The method for recognising revenue from the rendering of services when all of the paragraph 20 recognition criteria have been met is referred to as the 'percentage-of-completion' method. 
C)  IAS 18 requires that revenue from the rendering of service be recognised on an accruals basis. 
D)  The method for recognising revenue from the rendering of services is referred to in IAS 18 as the 'cost recovery' approach. 
A)  Revenue arising from the rendering of services can only be recognised when all of the recognition criteria in paragraph 20 have been satisfied. 
B)  The method for recognising revenue from the rendering of services when all of the paragraph 20 recognition criteria have been met is referred to as the 'percentage-of-completion' method. 
C)  IAS 18 requires that revenue from the rendering of service be recognised on an accruals basis. 
D)  The method for recognising revenue from the rendering of services is referred to in IAS 18 as the 'cost recovery' approach.

Question 7

General Purpose Financial Statements:

Accepted Answer

A)  are only necessary for users who do not have the power to obtain information in addition to that contained within the General Purpose Financial Statement. 
B)  provide all the information that users may need to make economic decisions. 
C)  focus on disclosing information relevant to assessing the ability of an entity to generate future cash flows. 
D)  meet the information needs that are common to all users. 
A)  are only necessary for users who do not have the power to obtain information in addition to that contained within the General Purpose Financial Statement. 
B)  provide all the information that users may need to make economic decisions. 
C)  focus on disclosing information relevant to assessing the ability of an entity to generate future cash flows. 
D)  meet the information needs that are common to all users.

Question 8

Which category of user is most likely to be interested primarily in the Statement of Profit or Loss and Other Comprehensive Income of an entity?

Accepted Answer

A)  suppliers and trade creditors 
B)  shareholders 
C)  employees 
D)  lending institutions 
A)  suppliers and trade creditors 
B)  shareholders 
C)  employees 
D)  lending institutions

Question 9

The IASB conceptual framework for financial reporting describes the basic concepts that underlie financial statements and defines:

Accepted Answer

A)  the principles for measurement; 
B)  disclosure principles; 
C)  the elements of financial statements 
D)  accounting recognition criteria. 
A)  the principles for measurement; 
B)  disclosure principles; 
C)  the elements of financial statements 
D)  accounting recognition criteria.

Question 10

Information that is able to confirm or correct past evaluations that have been made by users of financial information is an example of information that satisfies which of the following characteristics of financial information identified in The Framework?

Accepted Answer

A)  Understandability 
B)  Relevance 
C)  Reliability 
D)  Comparability 
A)  Understandability 
B)  Relevance 
C)  Reliability 
D)  Comparability

The Framework focuses on:

The four principal qualitative characteristics that make information in financial statements useful to investors identified within The Framework are:

The qualitative characteristics that make financial information useful for decision-making include:

Which of the following statements is INCORRECT?

The purpose of the notes to the financial statements are to:

When recognising revenue from the rendering of services in accordance with IAS 18 Revenue

General Purpose Financial Statements:

Which category of user is most likely to be interested primarily in the Statement of Profit or Loss and Other Comprehensive Income of an entity?

The IASB conceptual framework for financial reporting describes the basic concepts that underlie financial statements and defines:

Information that is able to confirm or correct past evaluations that have been made by users of financial information is an example of information that satisfies which of the following characteristics of financial information identified in The Framework?

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

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 1: The Conceptual Framework of the Iasb

The Framework focuses on:

The four principal qualitative characteristics that make information in financial statements useful to investors identified within The Framework are:

The qualitative characteristics that make financial information useful for decision-making include:

Which of the following statements is INCORRECT?

The purpose of the notes to the financial statements are to:

When recognising revenue from the rendering of services in accordance with IAS 18 Revenue

General Purpose Financial Statements:

Which category of user is most likely to be interested primarily in the Statement of Profit or Loss and Other Comprehensive Income of an entity?

The IASB conceptual framework for financial reporting describes the basic concepts that underlie financial statements and defines:

Information that is able to confirm or correct past evaluations that have been made by users of financial information is an example of information that satisfies which of the following characteristics of financial information identified in The Framework?

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

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