Question 1

When an asset is sold the resulting gain or loss is:

Accepted Answer

A)  reported in other comprehensive income, normally with separate disclosure of income and the carrying amount of the asset. 
B)  reported in other comprehensive income, normally on a net basis. 
C)  reported in current period profit or loss, normally with separate disclosure of income and the carrying amount of the asset. 
D)  reported in current period profit or loss, normally on a net basis. 
A)  reported in other comprehensive income, normally with separate disclosure of income and the carrying amount of the asset. 
B)  reported in other comprehensive income, normally on a net basis. 
C)  reported in current period profit or loss, normally with separate disclosure of income and the carrying amount of the asset. 
D)  reported in current period profit or loss, normally on a net basis.

Question 2

Property, plant and equipment includes items that are:

Accepted Answer

A)  intangible. 
B)  held for resale. 
C)  expected to be used up during the current period. 
D)  held for rental to others. 
A)  intangible. 
B)  held for resale. 
C)  expected to be used up during the current period. 
D)  held for rental to others.

Question 3

For the purposes of recognising a non-current property, plant and equipment asset the acquisition date is determined as the date:

Accepted Answer

A)  the contract to exchange assets is signed. 
B)  on which the offer to acquire the asset becomes unconditional. 
C)  the consideration is paid. 
D)  on which the acquirer obtains control of the asset. 
A)  the contract to exchange assets is signed. 
B)  on which the offer to acquire the asset becomes unconditional. 
C)  the consideration is paid. 
D)  on which the acquirer obtains control of the asset.

Question 4

An entity acquired an item of plant in exchange for an item of equipment. The equipment has a carrying value of $5000 and a fair value of $6000. The journal entry to record the acquisition of the plant will show:

Accepted Answer

A)  a loss on acquisition of $1000. 
B)  proceeds on sale of equipment of $1000. 
C)  a gain on sale of $1000. 
D)  proceeds on sale of plant of $1000. 
A)  a loss on acquisition of $1000. 
B)  proceeds on sale of equipment of $1000. 
C)  a gain on sale of $1000. 
D)  proceeds on sale of plant of $1000.

Question 5

When a company recognises a depreciation credit resulting from a review of the estimated residual value of a depreciable asset, the depreciation debit should be recognised in accumulated depreciation and the depreciation credit should be recognised:

Accepted Answer

A)  in the opening balance of retained earnings. 
B)  in the depreciation expense. 
C)  directly in the depreciable asset account. 
D)  as a gain in the current period. 
A)  in the opening balance of retained earnings. 
B)  in the depreciation expense. 
C)  directly in the depreciable asset account. 
D)  as a gain in the current period.

Question 6

Troubadour Limited had an existing revaluation surplus in respect to an item of plant that had been derecognised. An appropriate journal entry to transfer the surplus to retained earnings would include:

Accepted Answer

A)  DR Gain on revaluation - OCI. 
B)  CR Asset revaluation surplus. 
C)  DR Retained earnings. 
D)  CR Retained earnings. 
A)  DR Gain on revaluation - OCI. 
B)  CR Asset revaluation surplus. 
C)  DR Retained earnings. 
D)  CR Retained earnings.

Question 7

Jackson Limited acquired a bundle of assets for a cash consideration of $200 000. The fair values of the assets on date of acquisition was as follows: building $132 000, furniture $88 000. The appropriate journal entry to record this acquisition is:

Accepted Answer

A)  DR Property, plant and equipment $200 000 CR Cash $200 000 
B)  DR Property, plant and equipment $220 000 CR Cash $220 000 
C)  DR Building $120 000 DR Furniture $ 80 000
CR Cash $200 000 
D)  DR Building $132 000 DR Furniture $ 88 000
CR Cash $220 000 
A)  DR Property, plant and equipment $200 000 CR Cash $200 000 
B)  DR Property, plant and equipment $220 000 CR Cash $220 000 
C)  DR Building $120 000 DR Furniture $ 80 000
CR Cash $200 000 
D)  DR Building $132 000 DR Furniture $ 88 000
CR Cash $220 000

Exam 5: Property, Plant and Equipment

When an asset is sold the resulting gain or loss is:

Property, plant and equipment includes items that are:

For the purposes of recognising a non-current property, plant and equipment asset the acquisition date is determined as the date:

An entity acquired an item of plant in exchange for an item of equipment. The equipment has a carrying value of $5000 and a fair value of $6000. The journal entry to record the acquisition of the plant will show:

When a company recognises a depreciation credit resulting from a review of the estimated residual value of a depreciable asset, the depreciation debit should be recognised in accumulated depreciation and the depreciation credit should be recognised:

Troubadour Limited had an existing revaluation surplus in respect to an item of plant that had been derecognised. An appropriate journal entry to transfer the surplus to retained earnings would include:

Jackson Limited acquired a bundle of assets for a cash consideration of $200 000. The fair values of the assets on date of acquisition was as follows: building $132 000, furniture $88 000. The appropriate journal entry to record this acquisition is:

Accounting Regulation and the Conceptual Framework

Application of Accounting Theory

Fair Value Measurement

Inventories

Intangible Assets

Impairment of Assets

Provisions, Contingent Liabilities and Contingent Assets

Employee Benefits

Leases

Financial Instruments

Income Taxes

Share Capital and Reserves

Share-Based Payment

Revenue

Presentation of Financial Statements

Statement of Cash Flows

Accounting Policies and Other Disclosures

Earnings Per Share

Operating Segments

Related Party Disclosures

Sustainability and Corporate Social Responsibility Reporting

Foreign Currency Transactions and Forward Exchange Contracts

Translation of Foreign Currency Financial Statements

Business Combinations

Consolidation: Controlled Entities

Consolidation: Wholly Owned Entities

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Joint Arrangements

Insolvency and Liquidation

Accounting for Mineral Resources

Agriculture

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