Exam 17: The Framework of Accounting

The objective of financial reporting is to provide useful information to investors,creditors and others to aid in making and evaluating decisions about the allocation of scarce resources.

Which of the following is not a condition that must be met under AASB 118 'Revenue' before revenue from the sale of goods is recorded?

Luke's Construction receives a contract to build a bridge for $6 000 000,with an estimated cost of $4 000 000.Over the three-year construction period,the costs are estimated to be $500 000 in Year 1,$3 200 000 in Year 2 and $300 000 in Year 3.How much construction revenue would be reported in Year 2 using the percentage of completion method?

The pair of general principles of reporting that often result in a trade-off are:

Which of the following is not a characteristic used to judge whether an entity is a reporting entity that should prepare general purpose financial reports?

When both the total profit on the contract and the progressive degree of completion during construction can be reliably estimated,a construction firm should record income on a long-term construction project using the:

The total contract price to build an office building is $4 200 000,with estimated costs of $2 800 000.The construction firm's costs for Year 1 were $800 000.Under the percentage of completion method,gross profit reported in Year 1 is:

Accounting standard AASB 101 requires that a summary of accounting policies should be included:

According to the IASB Framework,accounting information should meet all of the following qualitative characteristics,except:

The principle that accountants do not have to account for every last item in strict accordance with the accounting rules is known as the:

Since 2005,the main influence on Australian accounting standards is:

Build-it-Better Constructions received a contract to build a convention centre for $23 000 000.It estimated total costs to be $16 000 000 over a three-year construction period: $5 000 000 in Year 1,$7 000 000 in Year 2,and $4 000 000 in Year 3.What is the total project revenue from the convention centre?

Information is regarded as material if its omission or misstatement could influence the economic decisions made by users of financial reports.

AASB 110 refers to subsequent events that provide evidence about conditions that existed at reporting date.Such events:

Information that is free from error and bias has the quality of:

A specific exception to the use of historical cost to value assets is if the net realisable value of inventories falls below cost.In this case,the justification for the use of market value rather than cost relies on the:

Resources controlled by an entity as a result of past events that are expected to provide future economic benefits is the AASB's definition of:

Which profit recognition method is the most conservative?