Exam 4: An Overview of Accounting for Assets

In a previous period Banshee Ltd wrote-off its 'dynamic mover' equipment,but new information has shown that it is probable that the future economic benefits exceed its cost of $40 000.What is the appropriate accounting entry?

The AASB Framework allows use of 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.

When an asset's recoverable amount is less than the asset's cost,the asset's cost must be written down to recognise an impairment loss:

The class of assets that is to be valued at lower than cost or net realisable value is:

An accountant is not sure on how to recognise an asset that is purchased in excess of fair value.Which of the following action will you recommend?

Which of the following items is not considered capitalisable cost of property,plant and equipment?

Bella Enterprises recorded as an asset a piece of equipment it 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?

A reporting entity must have legal ownership of an asset to record it as such within its balance sheet:

For an asset to be recognised it is essential that it be acquired by purchase or exchange of another asset:

The treatment of repairs and additions to property,plant and equipment can be best described as:

The classification of assets into current or non-current in the balance sheet will provide useful information on the short-term solvency of the entity:

Where the entity presents current assets separately from non-current assets and current liabilities separately from non-current liabilities,AASB 101 requires items to be disclosed on the face of the balance sheet,including:

Calling Card Co Ltd has acquired a printing press from Metal Manufacturers Ltd.The deal required Calling Card Co Ltd to exchange the following assets for the printing press: The cost to install the press was $1,000 (not yet paid).What is the entry to record the purchase of the printing press?

Current generally accepted accounting practices require one approach to measurement to be applied to all classes of assets:

Under AASB 101 the classification of assets into current and non-current will depend on the entity's:

AASB 101's definition of current assets and further discussion at paragraph 59 will:

The description of 'probable' in the AASB Framework means that:

'Recognised' in relation to asset disclosure may be defined as meaning:

Where the entity presents current assets separately from non-current assets and current liabilities separately from non-current liabilities what disclosure is the entity required to make under AASB 101?

Relevance and reliability are important considerations for determining the format to use for the purposes of balance sheet presentation: