T7

What is the purpose of a balance sheet?A . To show sources of funds and the manner in which those funds are employedB . To account for changes in cash during the accounting periodC . To show details of the nature of a company’s operating activitiesD . To reconcile the...

Which statement best describes the revalued amount of an asset?A . Its fair value at the date of revaluation less accumulated impairmentB . Its fair value at the date of revaluation less accumulated depreciationC . Its fair value, less retained earningsD . Its fair value at the date of revaluation...

Paid annual leave and paid sick leave are examples of which kind of employee benefits?A . Short-term benefitsB . Post-employment benefitsC . Termination benefitsD . Long-term benefitsView AnswerAnswer: A

Which characteristic requires a high degree of consensus among individuals on a given measurement?A . Faithful representationB . VerifiabilityC . ComparabilityD . NeutralView AnswerAnswer: B

What is one of the main purposes of the International Financial Reporting Interpretations Committee (IFRIC)?A . Provide guidance on reporting issues not specifically addressed in International Accounting Standards Board (IASB)’s standardsB . Provide advice to International Accounting Standards Board (IASB) on prioritiesC . Monitor International Accounting Standards Board (IASB)’s effectiveness,...

Why is accounting for short-term employee benefits generally a straightforward process?A . Because no actuarial assumptions are required to measure the obligation or cost and there is no possibility of any actuarial gain or lossB . Because short-term employee benefit obligations are measured on a discounted basisC . Because short-term...

One of the reasons preparers use the conceptual framework is to:A . Develop accounting policies in the absence of specific standardsB . Document a historical record of all judgmentsC . Develop alternate interpretations of specific standardsD . Encourage change to standards as Board members changeView AnswerAnswer: A

Which of the following is true of accrual accounting?A . Neither the recognition of revenue nor the recording of expense necessarily involves the receipt or payment of cashB . It rests on a primary guiding principle, which is recognitionC . The recognition of revenue involves the receipt or payment of...

Which of the following is one of the four main financial statements?A . Statement of full disclosureB . Statement of assetsC . Statement of changes in shareholders’ equityD . Statement of accrual accountingView AnswerAnswer: C

Which of the following best defines the term “equity”?A . The residual interest in the assets of the entity after deducting all its liabilitiesB . A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of...