Question 1

A central goal in establishing a conceptual framework of accounting will be to obtain general consensus on:

Accepted Answer

A) the scope and objectives of financial reporting. 
B) the qualitative characteristics that financial information should possess. 
C) what the elements of financial reporting are, including agreement on the characteristics and recognition criteria for assets, liabilities, income, expenses and equity. 
D) the scope and objectives of financial reporting and the qualitative characteristics that financial information should possess. 
A) the scope and objectives of financial reporting. 
B) the qualitative characteristics that financial information should possess. 
C) what the elements of financial reporting are, including agreement on the characteristics and recognition criteria for assets, liabilities, income, expenses and equity. 
D) the scope and objectives of financial reporting and the qualitative characteristics that financial information should possess.

Question 2

Bowen Pty Plc is a small proprietary company with seven directors.Four of the seven directors own 75% of the ordinary shares and the remaining shares are owned by family members of the directors.The company also has 15 trade creditors and an open line of credit with one state bank.Is Bowen Pty Plc a reporting entity and hence required to prepare general purpose financial reports?

Accepted Answer

A) Yes, because dependent users of financial reports exist. 
B) Yes, because there are trade creditors who are external users. 
C) No, because it is a small proprietary firm. 
D) No, because there are no obvious users who are unable to command the preparation of information from the entity. 
A) Yes, because dependent users of financial reports exist. 
B) Yes, because there are trade creditors who are external users. 
C) No, because it is a small proprietary firm. 
D) No, because there are no obvious users who are unable to command the preparation of information from the entity.

Question 3

Identify the appropriate qualitative characteristic employed in the following information:

Accepted Answer

A) relevance, faithful representation, consistency 
B) faithful representation, relevance, comparability 
C) faithful representation, relevance, consistency 
D) relevance, faithful representation, comparability 
A) relevance, faithful representation, consistency 
B) faithful representation, relevance, comparability 
C) faithful representation, relevance, consistency 
D) relevance, faithful representation, comparability

Question 4

Which of the following statement(s)is/are true of general purpose financial reports?

Accepted Answer

A) General purpose financial reports should be prepared by all reporting entities. 
B) General purpose financial reports are reports that comply with statements of accounting concepts and accounting standards. 
C) General purpose financial reports are intended to meet the information needs common to users who are able to command the preparation of reports. 
D) General purpose financial reports should be prepared by all reporting entities and general purpose financial reports are reports that comply with statements of accounting concepts and accounting standards. 
A) General purpose financial reports should be prepared by all reporting entities. 
B) General purpose financial reports are reports that comply with statements of accounting concepts and accounting standards. 
C) General purpose financial reports are intended to meet the information needs common to users who are able to command the preparation of reports. 
D) General purpose financial reports should be prepared by all reporting entities and general purpose financial reports are reports that comply with statements of accounting concepts and accounting standards.

Question 5

Identify which qualitative characteristic of financial reports is best described in each item below:

Accepted Answer

A) relevance, comparability, timeliness 
B) faithful representation, consistency, understandability 
C) faithful representation, comparability, timeliness 
D) relevance, understandability, comparability 
A) relevance, comparability, timeliness 
B) faithful representation, consistency, understandability 
C) faithful representation, comparability, timeliness 
D) relevance, understandability, comparability

Question 6

The Conceptual Framework suggests that the relevance characteristic outweighs the faithfully represented characteristic if the financial statement is to be rendered useful.

Accepted Answer

A) True 
 B)False

Question 7

The Conceptual Framework defines principles for a specific accounting recognition,measurement and disclosure matter.

Accepted Answer

A) True 
 B)False

Question 8

The objective of financial statements is to provide future oriented information to help investors make business decisions.

Accepted Answer

A) True 
 B)False

Question 9

In accordance with IASB Conceptual Framework which of the following transaction(s)is/are consistent with a definition of income?

Accepted Answer

A) collection of accounts receivable 
B) debt forgiveness 
C) issue of share capital 
D) collection of accounts receivable and debt forgiveness 
A) collection of accounts receivable 
B) debt forgiveness 
C) issue of share capital 
D) collection of accounts receivable and debt forgiveness

A central goal in establishing a conceptual framework of accounting will be to obtain general consensus on:

Identify the appropriate qualitative characteristic employed in the following information:

Which of the following statement(s)is/are true of general purpose financial reports?

Identify which qualitative characteristic of financial reports is best described in each item below:

The Conceptual Framework suggests that the relevance characteristic outweighs the faithfully represented characteristic if the financial statement is to be rendered useful.

The Conceptual Framework defines principles for a specific accounting recognition,measurement and disclosure matter.

The objective of financial statements is to provide future oriented information to help investors make business decisions.

In accordance with IASB Conceptual Framework which of the following transaction(s)is/are consistent with a definition of income?

An Overview of the International External Reporting Environment

Theories of Financial Accounting

An Overview of Accounting for Assets

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 2: The Conceptual Framework of Accounting and Its Relevance to Financial Reporting

A central goal in establishing a conceptual framework of accounting will be to obtain general consensus on:

Identify the appropriate qualitative characteristic employed in the following information:

Which of the following statement(s)is/are true of general purpose financial reports?

Identify which qualitative characteristic of financial reports is best described in each item below:

The Conceptual Framework suggests that the relevance characteristic outweighs the faithfully represented characteristic if the financial statement is to be rendered useful.

The Conceptual Framework defines principles for a specific accounting recognition,measurement and disclosure matter.

The objective of financial statements is to provide future oriented information to help investors make business decisions.

In accordance with IASB Conceptual Framework which of the following transaction(s)is/are consistent with a definition of income?

An Overview of the International External Reporting Environment

Theories of Financial Accounting

An Overview of Accounting for Assets

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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