1.Which statement is true about current value*

a.Fair value of an asset is the price that would be received to sell an asset in an orderly transactions

b.Value in use is the present value of the cash flows expected to be derived from an asset

c.Fulfillment value is the present value of the cash expected for the payment of liability

d All of these statements are true about current value

2.The conceptual framework is intended to establish*

a.GAAP in financial reporting

b.The meaning of present fairly in accordance with GAAP

c.The objectives and concept for use in developing standards of financial accounting and reporting

d.The hierarchy of sources of GAAP

3.IFRIC Interpretations issued by IASB*

a.Are considered authoritative and must be followed

b.Cover newly identified financial reporting issues not specifically addressed

c.Cover issues with conflicting interpretations

d.All of these are true about IFRIC Interpretations

4.The standard of adequate disclosure is best described by:*

a.All information related to operating objectives must be disclosed in the financial statements

b.Information about each account balance appearing in the financial statements is included in the notes

c.Enough information should be disclosed in order that a prospective investor can make a wise decision

d.Disclosure of any facts significant enough to influence the judgement of a primary user

5.Under IFRS, the extraordinary item presentation*

a.Has not changed from current rules

b.Has been eliminated

c.Has been eliminated from the net of tax presentation

d.Has been eliminated from EPS reporting

6.A financial liability due within twelve months after a reporting period shall be classified as noncurrent*

a.When it is refinanced on a long term basis before the issue of financial statement

b.When the entity has no discretion to refinance for at least twelve months

c.When it is refinance on a long term basis after the end of reporting period

d.When it is refinanced on a long-term basis on or before the end of the reporting period

7.Which of the following criteria is not required for the results of a component of an entity to be classified as discontinued operations?*

a.Management must have entered into a sale agreement

b.The component is available for immediate sale

c.The operations and cash flows of the component shall be eliminated from the operations of the entity as a result of disposal

d.The entity shall not have any significant continuing involvement in the operations of the component after disposal

8.Enhancing qualitative characteristics of accounting information include*

a.Relevance and comparability

b.Comparability and timeliness

c.Understandability and relevance

d.Neutrality and comparability

9.An entity is permitted to depart from a particular standard if all conditions are satisfied, except:*

a.In extremely rare circumstances

b.When management concludes that compliance with the standard would be misleading

c.When the departure from the standard is necessary to achieve its fair presentation

d.When the Conceptual Framework for Financial Reporting prohibits such a departure

10.Under the financial capital concept, net income occurs when*

a.The nominal amount of net assets at year-end increased

b.The physical productive capital at year-end increased excluding equity transactions with owners

c.The nominal amount of net assets at year-end increased excluding equity transactions with owners

d.The physical productive capital at year-end increased

11.Which statement regarding trial balance is incorrect?*

a.A trial balance is a test of the equity of the debit and credit balances in the ledger

b.A trial balance is a list of all the open accounts in the ledger with their balances

c.A trial balance proves that no errors of any kind have been made in the accounts during the accounting period

d.A trial balance helps to localize errors within an identifiable time period

12.Which is an implication of the going concern assumption*

a. The historical cost principle is credible

b. Depreciation and amortization policies are justifiable and appropriate

c. The current and noncurrent classification of assets and liabilities is justifiable and significant

d. All of these are an implication of going concern

13.An entity acquired a subsidiary exclusively with a view to selling it. The subsidiary met the criteria to be classified as held for sale. At the end of the reporting period, the subsidiary has not yet been sold and six months have passed since the acquisition. How will the subsidiary be measured in the statement of financial position at the date of the first financial statements after acquisition?*

a.At fair value

b.At the lower of cost and fair value less cost of disposal

c.At carrying amount

d.In accordance with applicable IFRS

14.Which of the following is not a theoretical basis for the allocation of expense*

a.Immediate recognition

b.Systematic and rational allocation

c.Cause and effect relationship

d.Profit maximization

15.At the end of the current reporting period, an entity carried a receivable from a major customer who declared bankruptcy after the end of reporting period and before the issuance of financial statements. What should be reported at the current-year end?*

a.Disclose the fact that the customer has declared bankruptcy

b.Make a provision for the event after reporting period in the financial statements

c.Ignore the event and wait for the outcome of the bankruptcy

d.Reverse the sale pertaining to the receivable in the comparative statement for the prior period

16.Which of the following must be included as a line item in the statement of financial position*

a.Contingent asset

b.Property, plant and equipment analyzed by class

c.Share capital and reserves analyzed by class

d.Deferred tax asset

17.Rights that have the potential to produce economic benefits and correspond to an obligation of another entity include all, except:*

a.Right to receive cash

b.Right to receive goods

c.Right to exchange economic resources with another entity on favorable terms

d.Right over property, plant and equipment

18.Related parties include all of the following except:*

a. Parent, subsidiary and fellow subsidiaries

b. Associates

c. Key management personnel and close family members of such key management personnel

d. Two venturers sharing joint control over a joint venture

19.Which is not the purpose of having a Conceptual Framework*

a. To enable the accountancy profession to solve more quickly emerging practical problems

b. To provide foundation from which to build more useful financial accounting standards

c. To enhance comparability of financial statements across entities

d. To assist regulatory agencies in issuing rules and regulations for a particular industry

20.The limitations of income statement include all of the following except*

a. Items that cannot be measure reliably are not reported

b. Only actual amounts are reported in net income

c. Income measurement involves judgement

d. Income numbers are affected by the accounting method