Question 1

Which of the following is a limitation of the statement of financial position?

Accepted Answer

A) Many items that are of financial value are omitted. 
B) Judgments and estimates are used. 
C) Current fair value is not reported. 
D) All of these choices are correct. 
A) Many items that are of financial value are omitted. 
B) Judgments and estimates are used. 
C) Current fair value is not reported. 
D) All of these choices are correct.

Question 2

Pedigo Corporation reports the following information:   Pedigo's cash debt coverage is

Accepted Answer

A) 0.90. 
B) 1.50. 
C) 2.25. 
D) 4.09. 
A) 0.90. 
B) 1.50. 
C) 2.25. 
D) 4.09.

Question 3

Free cash flow is calculated as net cash provided by operating activities less

Accepted Answer

A) capital expenditures. 
B) dividends. 
C) capital expenditures and dividends. 
D) capital expenditures and depreciation. 
A) capital expenditures. 
B) dividends. 
C) capital expenditures and dividends. 
D) capital expenditures and depreciation.

Question 4

Which of the following statements is incorrect regarding notes to the financial statements?

Accepted Answer

A) IFRS requires specific note disclosures including disaggregation of inventories into classifications such as merchandise, production supplies, work in process, and finished goods. 
B) IFRS requires a maturity analysis for receivables. 
C) IFRS requires that all notes be clear, simple to understand, and non-technical in nature. 
D) All of the choices are correct regarding notes to the financial statements. 
A) IFRS requires specific note disclosures including disaggregation of inventories into classifications such as merchandise, production supplies, work in process, and finished goods. 
B) IFRS requires a maturity analysis for receivables. 
C) IFRS requires that all notes be clear, simple to understand, and non-technical in nature. 
D) All of the choices are correct regarding notes to the financial statements.

Question 5

Which of the following is a current asset?

Accepted Answer

A) Cash surrender value of a life insurance policy of which the company is the bene-ficiary. 
B) Investment in equity securities for the purpose of controlling the issuing company. 
C) Cash designated for the purchase of tangible fixed assets. 
D) Trade installment receivables normally collectible in 18 months. 
A) Cash surrender value of a life insurance policy of which the company is the bene-ficiary. 
B) Investment in equity securities for the purpose of controlling the issuing company. 
C) Cash designated for the purchase of tangible fixed assets. 
D) Trade installment receivables normally collectible in 18 months.

Question 6

For Randolph Company, the following information is available:   In Randolph's statement of financial position, intangible assets should be reported at

Accepted Answer

A) R110,000. 
B) R105,000. 
C) R390,000. 
D) R385,000. 
A) R110,000. 
B) R105,000. 
C) R390,000. 
D) R385,000.

Question 7

Under IFRS, companies may offset assets and liabilities; for example, accounts payable may be offset against cash to report net cash available for other expenses.

Accepted Answer

A) True 
 B)False

Question 8

The statement of cash flows provides answers to all of the following questions except

Accepted Answer

A) where did the cash come from during the period? 
B) what was the cash used for during the period? 
C) what is the impact of inflation on the cash balance at the end of the year? 
D) what was the change in the cash balance during the period? 
A) where did the cash come from during the period? 
B) what was the cash used for during the period? 
C) what is the impact of inflation on the cash balance at the end of the year? 
D) what was the change in the cash balance during the period?

Question 9

An asset which is expected to be converted into cash, sold, or consumed within one year of the statement date is always reported as a current asset.

Accepted Answer

A) True 
 B)False

Question 10

In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from

Accepted Answer

A) lending activities. 
B) operating activities. 
C) investing activities. 
D) financing activities. 
A) lending activities. 
B) operating activities. 
C) investing activities. 
D) financing activities.

Question 11

Which of the following is not an acceptable major asset classification?

Accepted Answer

A) Current assets 
B) Investments 
C) Property, plant, and equipment 
D) Deferred charges 
A) Current assets 
B) Investments 
C) Property, plant, and equipment 
D) Deferred charges

Question 12

Presented below are data for Bandkok Corp.   Equity at January 1, 2015 is

Accepted Answer

A) Rp1,690. 
B) Rp1,798. 
C) Rp2,932. 
D) Rp2,986. 
A) Rp1,690. 
B) Rp1,798. 
C) Rp2,932. 
D) Rp2,986.

Question 13

Significant financing and investing activities that do not affect cash are not reported in the statement of cash flows or any other place.

Accepted Answer

A) True 
 B)False

Question 14

Under IFRS a company may use the term "reserve" to include items such as retained earnings, share premium, and accumulated other comprehensive income.

Accepted Answer

A) True 
 B)False

Question 15

For Grimmett Company, the following information is available:   In Grimmett's statement of financial position, intangible assets should be reported at

Accepted Answer

A) ¥ 55,000. 
B) ¥ 75,000. 
C) ¥255,000. 
D) ¥275,000. 
A) ¥ 55,000. 
B) ¥ 75,000. 
C) ¥255,000. 
D) ¥275,000.

Question 16

Free cash flow is net income less capital expenditures and dividends.

Accepted Answer

A) True 
 B)False

Question 17

The statement of cash flows reports all of the following except

Accepted Answer

A) the net change in cash for the period. 
B) the cash effects of operations during the period. 
C) the free cash flows generated during the period. 
D) investing transactions. 
A) the net change in cash for the period. 
B) the cash effects of operations during the period. 
C) the free cash flows generated during the period. 
D) investing transactions.

Question 18

The shareholders' equity section is usually divided into how many parts?

Accepted Answer

A) 6 
B) 5 
C) 4 
D) 3 
A) 6 
B) 5 
C) 4 
D) 3

Question 19

A complete set of financial statements includes each of the following except

Accepted Answer

A) a statement of comprehensive income. 
B) a statement of changes in equity. 
C) notes. 
D) All of these answers are included. 
A) a statement of comprehensive income. 
B) a statement of changes in equity. 
C) notes. 
D) All of these answers are included.

Question 20

Harding Corporation reports the following information:   Harding should report cash provided by operating activities of

Accepted Answer

A) R$600,000. 
B) R$840,000. 
C) R$1,160,000. 
D) R$1,400,000. 
A) R$600,000. 
B) R$840,000. 
C) R$1,160,000. 
D) R$1,400,000.

Exam 5: Statement of Financial Position and Statement of Cash Flows

Which of the following is a limitation of the statement of financial position?

Pedigo Corporation reports the following information: Pedigo's cash debt coverage is

Free cash flow is calculated as net cash provided by operating activities less

Which of the following statements is incorrect regarding notes to the financial statements?

Which of the following is a current asset?

For Randolph Company, the following information is available: In Randolph's statement of financial position, intangible assets should be reported at

Under IFRS, companies may offset assets and liabilities; for example, accounts payable may be offset against cash to report net cash available for other expenses.

The statement of cash flows provides answers to all of the following questions except

An asset which is expected to be converted into cash, sold, or consumed within one year of the statement date is always reported as a current asset.

In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from

Which of the following is not an acceptable major asset classification?

Presented below are data for Bandkok Corp. Equity at January 1, 2015 is

Significant financing and investing activities that do not affect cash are not reported in the statement of cash flows or any other place.

Under IFRS a company may use the term "reserve" to include items such as retained earnings, share premium, and accumulated other comprehensive income.

For Grimmett Company, the following information is available: In Grimmett's statement of financial position, intangible assets should be reported at

Free cash flow is net income less capital expenditures and dividends.

The statement of cash flows reports all of the following except

The shareholders' equity section is usually divided into how many parts?

A complete set of financial statements includes each of the following except

Harding Corporation reports the following information: Harding should report cash provided by operating activities of

Financial Reporting and Accounting Standards

Conceptual Framework for Financial Reporting

The Accounting Information System

Income Statement and Related Information

Accounting and the Time Value of Money

Cash and Receivables

Valuation of Inventories: a Cost-Basis Approach

Inventories: Additional Valuation Issues

Acquisition and Disposition of Property, Plant, and Equipment

Depreciation, Impairments, and Depletion

Intangible Assets

Current Liabilities, Provisions, and Contingencies

Non-Current Liabilities

Equity

Dilutive Securities and Earnings Per Share

Investments

Revenue Recognition

Accounting for Income Taxes

Accounting for Pensions and Postretirement Benefits

Accounting for Leases

Accounting Changes and Error Analysis

Statement of Cash Flows

Presentation and Disclosure in Financialreporting

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