Question 1

Which of these is not correct concerning measuring assets at their current cash equivalent?

Accepted Answer

A)  Shareholders would be able to satisfy themselves that the business has maintained its capacity to adapt to change 
B)  A useful measure of solvency is provided 
C)  Information is provided to creditors about asset marketability 
D)  The measurement of performance is given pre-eminence over the measurement of financial position 
A)  Shareholders would be able to satisfy themselves that the business has maintained its capacity to adapt to change 
B)  A useful measure of solvency is provided 
C)  Information is provided to creditors about asset marketability 
D)  The measurement of performance is given pre-eminence over the measurement of financial position

Question 2

Using the Framework criteria,explain why the point of sale is generally selected as the point at which income is recognised.

Accepted Answer

The point of sale is generally selected

Question 3

Assume that assets are held for use and not offered for sale and that PV = present value,MV = net market value and RC = current replacement cost.If PV > MV > RC,the deprival value of the asset is:

Accepted Answer

A)  current replacement cost 
B)  present value 
C)  net market value 
D)  cannot be determined 
A)  current replacement cost 
B)  present value 
C)  net market value 
D)  cannot be determined

Question 4

The estimated current net market value of an asset in the ordinary course of business is known as:

Accepted Answer

A)  current cash equivalent 
B)  replacement cost 
C)  opportunity cost 
D)  discounted value of future cash flows 
A)  current cash equivalent 
B)  replacement cost 
C)  opportunity cost 
D)  discounted value of future cash flows

Question 5

The Framework specifies that liabilities should be measured at:

Accepted Answer

A)  historical cost 
B)  current replacement cost 
C)  current cash equivalent 
D)  The Framework does not specify how liabilities should be measured 
A)  historical cost 
B)  current replacement cost 
C)  current cash equivalent 
D)  The Framework does not specify how liabilities should be measured

Question 6

AASB 137 'Provisions,Contingent Liabilities and Contingent Assets' requires information about contingent liabilities to be disclosed in a note to the financial statements where the probability of a future sacrifice of economic benefit is:

Accepted Answer

A)  higher than remote 
B)  above 20% 
C)  between 25% and 50% 
D)  above 50% 
A)  higher than remote 
B)  above 20% 
C)  between 25% and 50% 
D)  above 50%

Question 7

Assume a business commences operations with owners' contributions of $20 000 with which it purchases an item of inventory that it later sells for $24 000.If the replacement cost of the inventory at the date of sale is $21 000 the amount the business can distribute and still maintain the same level of operations is:

Accepted Answer

A)  $0 
B)  $3000 
C)  $4000 
D)  $1000 
A)  $0 
B)  $3000 
C)  $4000 
D)  $1000

Question 8

Measuring and reporting assets using historical cost is most relevant in satisfying:

Accepted Answer

A)  the stewardship objective of financial reporting 
B)  the decision usefulness objective of financial reporting 
C)  the objectives of relevance and reliability in financial reporting 
D)  both A and B 
A)  the stewardship objective of financial reporting 
B)  the decision usefulness objective of financial reporting 
C)  the objectives of relevance and reliability in financial reporting 
D)  both A and B

Question 9

The statement in relation to the current replacement cost of liabilities that is correct is:

Accepted Answer

A)  Current replacement cost for liabilities is the amount that could be borrowed now with a similar debt instrument against a promise to pay the interest and principal commitments of the existing liability 
B)  The current replacement cost of a liability is difficult to measure 
C)  If current replacement cost is the characteristic of assets that is measured, then, for consistency, liabilities should also be measured at current replacement cost 
D)  All the statements are correct 
A)  Current replacement cost for liabilities is the amount that could be borrowed now with a similar debt instrument against a promise to pay the interest and principal commitments of the existing liability 
B)  The current replacement cost of a liability is difficult to measure 
C)  If current replacement cost is the characteristic of assets that is measured, then, for consistency, liabilities should also be measured at current replacement cost 
D)  All the statements are correct

Which of these is not correct concerning measuring assets at their current cash equivalent?

Using the Framework criteria,explain why the point of sale is generally selected as the point at which income is recognised.

Assume that assets are held for use and not offered for sale and that PV = present value,MV = net market value and RC = current replacement cost.If PV > MV > RC,the deprival value of the asset is:

The estimated current net market value of an asset in the ordinary course of business is known as:

The Framework specifies that liabilities should be measured at:

AASB 137 'Provisions,Contingent Liabilities and Contingent Assets' requires information about contingent liabilities to be disclosed in a note to the financial statements where the probability of a future sacrifice of economic benefit is:

Measuring and reporting assets using historical cost is most relevant in satisfying:

The statement in relation to the current replacement cost of liabilities that is correct is:

Institutional Arrangements for Setting Accounting Standards in Australia

A Conceptual Framework: Scope, reporting Entity and the Objective of Financial Report

A Conceptual Framework: the Fundamentals of General Purpose Financial Reporting

The Choice of Accounting Methods

The Balance Sheet: an Overview

Accounting for Current Assets

Accounting for Property, plant and Equipment

Accounting for Company Income Tax

Accounting for Investments

Accounting for Intangible Assets

Accounting for Leases

Accounting for Employee Benefits

Accounting for Financial Instruments

Equity

The Income Statement

The Cash Flow Statement

Financial Reporting: Segment Reporting, value Added Statements, highlights Statements and Future-Oriented Financial Information

Further Financial Reporting Issues

Accounting for the Extractive Industries

Accounting for Real Estate Development and Construction Contracts

Accounting for Agricultural Activity

Accounting for Superannuation Plans

Accounting for Financial Institutions

Financial Reporting in the Public Sector

International Accounting Standards, harmonisation and Convergence

Foreign Currency Translation

Accounting for Corporate Social Responsibilities

Ethics in Accounting

Filters

Exam 4: A Conceptual Framework: Recognition and Measurement of the Elements of Financial Statements

Which of these is not correct concerning measuring assets at their current cash equivalent?

Using the Framework criteria,explain why the point of sale is generally selected as the point at which income is recognised.

Assume that assets are held for use and not offered for sale and that PV = present value,MV = net market value and RC = current replacement cost.If PV > MV > RC,the deprival value of the asset is:

The estimated current net market value of an asset in the ordinary course of business is known as:

The Framework specifies that liabilities should be measured at:

AASB 137 'Provisions,Contingent Liabilities and Contingent Assets' requires information about contingent liabilities to be disclosed in a note to the financial statements where the probability of a future sacrifice of economic benefit is:

Measuring and reporting assets using historical cost is most relevant in satisfying:

The statement in relation to the current replacement cost of liabilities that is correct is:

Institutional Arrangements for Setting Accounting Standards in Australia

A Conceptual Framework: Scope, reporting Entity and the Objective of Financial Report

A Conceptual Framework: the Fundamentals of General Purpose Financial Reporting

The Choice of Accounting Methods

The Balance Sheet: an Overview

Accounting for Current Assets

Accounting for Property, plant and Equipment

Accounting for Company Income Tax

Accounting for Investments

Accounting for Intangible Assets

Accounting for Leases

Accounting for Employee Benefits

Accounting for Financial Instruments

Equity

The Income Statement

The Cash Flow Statement

Financial Reporting: Segment Reporting, value Added Statements, highlights Statements and Future-Oriented Financial Information

Further Financial Reporting Issues

Accounting for the Extractive Industries

Accounting for Real Estate Development and Construction Contracts

Accounting for Agricultural Activity

Accounting for Superannuation Plans

Accounting for Financial Institutions

Financial Reporting in the Public Sector

International Accounting Standards, harmonisation and Convergence

Foreign Currency Translation

Accounting for Corporate Social Responsibilities

Ethics in Accounting

Filters