Question 1

In the case of classifying a liability as current or non-current,what approach does IAS 1 require if there is no clearly identifiable operating cycle?

Accepted Answer

A) The most common length of operating cycle for other entities in a comparable industry must be used. 
B) The operating cycle of the event that gave rise to the creation of the liability must be used as the basis for determining the liability's operating cycle. 
C) The 12-month period from the reporting date must be used. 
D) The average operating cycle length over all operations of the entity must be used. 
A) The most common length of operating cycle for other entities in a comparable industry must be used. 
B) The operating cycle of the event that gave rise to the creation of the liability must be used as the basis for determining the liability's operating cycle. 
C) The 12-month period from the reporting date must be used. 
D) The average operating cycle length over all operations of the entity must be used.

Question 2

Which of the following assets are recognised at fair value?

Accepted Answer

A) biological assets 
B) revalued property, plant equipment 
C) assets under a finance lease 
D) biological assets and revalued property, plant equipment 
A) biological assets 
B) revalued property, plant equipment 
C) assets under a finance lease 
D) biological assets and revalued property, plant equipment

Question 3

If the expected value in use of an asset is more than its market value,then it is expected that the entity will retain the asset.

Accepted Answer

A) True 
 B)False

Question 4

Discuss the approaches recommended by IAS 1 to present assets in the statement of financial position.

Accepted Answer

IAS 1 (paragraph 60)requires that,for th

Question 5

The cost of an asset will typically include the purchase price and:

Accepted Answer

A) other expenditures on material and services to generate the asset. 
B) depreciation costs of other assets used to generate the asset. 
C) salaries and wages of the Chief Executive Officer. 
D) other expenditures on material and services to generate the asset and depreciation costs of other assets used to generate the asset. 
A) other expenditures on material and services to generate the asset. 
B) depreciation costs of other assets used to generate the asset. 
C) salaries and wages of the Chief Executive Officer. 
D) other expenditures on material and services to generate the asset and depreciation costs of other assets used to generate the asset.

Question 6

IAS 1 Presentation of Financial Statements requires all current and non-current assets to be presented in the statement of financial position in the order of maturity.

Accepted Answer

A) True 
 B)False

Question 7

The effect of capitalising expenditures is to:

Accepted Answer

A) decrease current period profit, increase current period assets and decrease future period equity. 
B) increase current period profit, increase current period assets and decrease future period profit. 
C) increase current period profit, decrease current period assets and decrease future period liabilities. 
D) increase current period profit, increase current period equity and increase future period profit. 
A) decrease current period profit, increase current period assets and decrease future period equity. 
B) increase current period profit, increase current period assets and decrease future period profit. 
C) increase current period profit, decrease current period assets and decrease future period liabilities. 
D) increase current period profit, increase current period equity and increase future period profit.

Question 8

Under IAS 1 the classification of assets into current and non-current will depend on the entity's:

Accepted Answer

A) average operating cycle. 
B) current accounting period. 
C) ordinary course of business. 
D) normal operating cycle. 
A) average operating cycle. 
B) current accounting period. 
C) ordinary course of business. 
D) normal operating cycle.

Question 9

A reporting entity must have legal ownership of an asset to record it as such within its statement of financial position .

Accepted Answer

A) True 
 B)False

Question 10

The IASB Conceptual Framework allows use of a different measurement basis for similar assets as long as this is disclosed in the summary of accounting policies adopted in the notes to the accounts.

Accepted Answer

A) True 
 B)False

Question 11

Advertising expenditures are typically expensed as incurred because the future economic benefits are uncertain to occur.

Accepted Answer

A) True 
 B)False

Question 12

Bella Enterprises recorded as an asset a piece of equipment purchased for €13 000 this period.No depreciation has been recorded as yet and it has been revealed that it is not probable that the equipment will generate future economic benefits.What is the appropriate accounting entry?

Accepted Answer

A)  $$\begin{array} { | l | l | l | l | } 
\hline \mathrm { Dr } & \text { Loss on write-down of equipment } & 13000 & \
\hline \mathrm { Cr } & \text { Equipment } & & 13000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | l | r | r | } 
\hline \mathrm { Dr } & \text { Equipment } & 13000 & \
\hline \mathrm { Cr } & \text { Write-down of equipment } & & 13000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | l | r | r | } 
\hline \mathrm { Dr } & \text { Equipment expense } & 13000 & \
\hline \mathrm { Cr } & \text { Write-down of equipment } & & 13000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | l | l | l | } 
\hline \mathrm { Dr } & \text { Equipment-depreciation } & 13000 & \
\hline \mathrm { Cr } & \text { Accumulated depreciation equipment } & & 13000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | l | l | l | } 
\hline \mathrm { Dr } & \text { Loss on write-down of equipment } & 13000 & \
\hline \mathrm { Cr } & \text { Equipment } & & 13000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | l | r | r | } 
\hline \mathrm { Dr } & \text { Equipment } & 13000 & \
\hline \mathrm { Cr } & \text { Write-down of equipment } & & 13000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | c | l | r | r | } 
\hline \mathrm { Dr } & \text { Equipment expense } & 13000 & \
\hline \mathrm { Cr } & \text { Write-down of equipment } & & 13000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | l | l | l | } 
\hline \mathrm { Dr } & \text { Equipment-depreciation } & 13000 & \
\hline \mathrm { Cr } & \text { Accumulated depreciation equipment } & & 13000 \
\hline
\end{array}$$

Question 13

If an impairment loss recognised in prior periods for a revalued asset no longer exists,IAS 36 Impairment of Assets requires a reporting entity to:

Accepted Answer

A) reverse the impairment loss to increase the asset to its recoverable amount. 
B) reverse the impairment loss in profit and loss, only if the asset adopts the revaluation model. 
C) treat this as a prior period adjustment and recognise the reversal as a gain. 
D) ignore this information as previously written off assets are precluded from being reinstated. 
A) reverse the impairment loss to increase the asset to its recoverable amount. 
B) reverse the impairment loss in profit and loss, only if the asset adopts the revaluation model. 
C) treat this as a prior period adjustment and recognise the reversal as a gain. 
D) ignore this information as previously written off assets are precluded from being reinstated.

Question 14

Heritage assets have characteristics that create doubt about whether or not they satisfy the definition of an asset.These characteristics include:

Accepted Answer

A) They are not expected to generate net economic benefits. 
B) They never generate cash inflows. 
C) They are unlikely ever to be sold. 
D) They are not expected to generate net economic benefits and they are unlikely ever to be sold. 
A) They are not expected to generate net economic benefits. 
B) They never generate cash inflows. 
C) They are unlikely ever to be sold. 
D) They are not expected to generate net economic benefits and they are unlikely ever to be sold.

Question 15

According to IAS 36,a non-current asset should be:

Accepted Answer

A) revalued downwards where the net amount that is expected to be recovered through the cash inflows and outflows from its continued use and subsequent disposal exceeds its cost. 
B) written down to its replacement cost when the recoverable amount is greater than its value in use. 
C) written down to its recoverable amount when its carrying amount is greater than its recoverable amount. 
D) revalued upwards where its value in use is greater than its net realisable value. 
A) revalued downwards where the net amount that is expected to be recovered through the cash inflows and outflows from its continued use and subsequent disposal exceeds its cost. 
B) written down to its replacement cost when the recoverable amount is greater than its value in use. 
C) written down to its recoverable amount when its carrying amount is greater than its recoverable amount. 
D) revalued upwards where its value in use is greater than its net realisable value.

In the case of classifying a liability as current or non-current,what approach does IAS 1 require if there is no clearly identifiable operating cycle?

Which of the following assets are recognised at fair value?

If the expected value in use of an asset is more than its market value,then it is expected that the entity will retain the asset.

Discuss the approaches recommended by IAS 1 to present assets in the statement of financial position.

The cost of an asset will typically include the purchase price and:

IAS 1 Presentation of Financial Statements requires all current and non-current assets to be presented in the statement of financial position in the order of maturity.

The effect of capitalising expenditures is to:

Under IAS 1 the classification of assets into current and non-current will depend on the entity's:

A reporting entity must have legal ownership of an asset to record it as such within its statement of financial position .

The IASB Conceptual Framework allows use of a different measurement basis for similar assets as long as this is disclosed in the summary of accounting policies adopted in the notes to the accounts.

Advertising expenditures are typically expensed as incurred because the future economic benefits are uncertain to occur.

Bella Enterprises recorded as an asset a piece of equipment purchased for €13 000 this period.No depreciation has been recorded as yet and it has been revealed that it is not probable that the equipment will generate future economic benefits.What is the appropriate accounting entry?

If an impairment loss recognised in prior periods for a revalued asset no longer exists,IAS 36 Impairment of Assets requires a reporting entity to:

Heritage assets have characteristics that create doubt about whether or not they satisfy the definition of an asset.These characteristics include:

According to IAS 36,a non-current asset should be:

An Overview of the International External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Financial Accounting

Depreciation of Property, Plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

An Overview of Accounting for Liabilities

Accounting for Leases

Share Capital, Reserves and Share Options Employee Bonus Schemes

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Income Taxes

The Statement of Cash Flows

Events Occurring After the Reporting Date

Related-Party Disclosures

Earnings Per Share

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues III: Accounting for Indirect Ownership Interest

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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Exam 4: An Overview of Accounting for Assets

In the case of classifying a liability as current or non-current,what approach does IAS 1 require if there is no clearly identifiable operating cycle?

Which of the following assets are recognised at fair value?

If the expected value in use of an asset is more than its market value,then it is expected that the entity will retain the asset.

Discuss the approaches recommended by IAS 1 to present assets in the statement of financial position.

The cost of an asset will typically include the purchase price and:

IAS 1 Presentation of Financial Statements requires all current and non-current assets to be presented in the statement of financial position in the order of maturity.

The effect of capitalising expenditures is to:

Under IAS 1 the classification of assets into current and non-current will depend on the entity's:

A reporting entity must have legal ownership of an asset to record it as such within its statement of financial position .

The IASB Conceptual Framework allows use of a different measurement basis for similar assets as long as this is disclosed in the summary of accounting policies adopted in the notes to the accounts.

Advertising expenditures are typically expensed as incurred because the future economic benefits are uncertain to occur.

Bella Enterprises recorded as an asset a piece of equipment purchased for €13 000 this period.No depreciation has been recorded as yet and it has been revealed that it is not probable that the equipment will generate future economic benefits.What is the appropriate accounting entry?

If an impairment loss recognised in prior periods for a revalued asset no longer exists,IAS 36 Impairment of Assets requires a reporting entity to:

Heritage assets have characteristics that create doubt about whether or not they satisfy the definition of an asset.These characteristics include:

According to IAS 36,a non-current asset should be:

An Overview of the International External Reporting Environment

The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

Theories of Financial Accounting

Depreciation of Property, Plant and Equipment

Revaluations and Impairment Testing of Non-Current Assets

Inventory

Accounting for Intangibles

An Overview of Accounting for Liabilities

Accounting for Leases

Share Capital, Reserves and Share Options Employee Bonus Schemes

Accounting for Financial Instruments

Revenue Recognition Issues

The Statement of Comprehensive Income and Statement of Changes in Equity

Accounting for Income Taxes

The Statement of Cash Flows

Events Occurring After the Reporting Date

Related-Party Disclosures

Earnings Per Share

Further Consolidation Issues I: Accounting for Intragroup Transactions

Further Consolidation Issues II: Accounting for Non-Controlling Interests

Further Consolidation Issues III: Accounting for Indirect Ownership Interest

Accounting for Foreign Currency Transactions

Translating the Financial Statements of Foreign Operations

Accounting for Corporate Social Responsibility

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