Question 1

If an asset's carrying amount is greater than its recoverable amount an __________ loss will need to be recognised immediately in the statement of profit or loss.

Accepted Answer

impairment

Question 2

Which of the following statements about the measurement of 'fair value' is incorrect?

Accepted Answer

A)  It is an exit value. 
B)  A liability's fair value takes into consideration the time value of money. 
C)  In an active market, as asset's fair value is observable and verifiable. 
D)  It is an entry value. 
A)  It is an exit value. 
B)  A liability's fair value takes into consideration the time value of money. 
C)  In an active market, as asset's fair value is observable and verifiable. 
D)  It is an entry value. D

Question 3

A revaluation surplus is a reserve account that arises when:

Accepted Answer

A)  an entity uses fair value rather than cost to measure its long-term assets. 
B)  an entity uses cost rather than fair value to measure its long-term assets. 
C)  management transfer funds out of retained earnings to put aside for future use. 
D)  an entity has an overseas subsidiary. 
A)  an entity uses fair value rather than cost to measure its long-term assets. 
B)  an entity uses cost rather than fair value to measure its long-term assets. 
C)  management transfer funds out of retained earnings to put aside for future use. 
D)  an entity has an overseas subsidiary. A

Question 4

An accountant is required to make choices in measuring the value of:

Accepted Answer

A)  property, plant and equipment. 
B)  development expenditure. 
C)  inventory. 
D)  all of the above. 
A)  property, plant and equipment. 
B)  development expenditure. 
C)  inventory. 
D)  all of the above.

Question 5

At acquisition date,the cost price and fair value of an asset will be fairly equivalent.However,over the life of the asset,the:

Accepted Answer

A)  fair value will always be greater than the cost price. 
B)  cost price will always be greater than the fair value. 
C)  fair value and cost price will most likely diverge. 
D)  fair value and cost price will remain fairly equivalent. 
A)  fair value will always be greater than the cost price. 
B)  cost price will always be greater than the fair value. 
C)  fair value and cost price will most likely diverge. 
D)  fair value and cost price will remain fairly equivalent.

Question 6

Blue Sea Resort Ltd acquired all the shares in Scuba Ltd for $750 000.The fair value of the assets acquired was $1 000 000 and the fair value of the liabilities assumed was $300 000.The amount of goodwill acquired by Blue Sea Resort Ltd is:

Accepted Answer

A)  $750 000 
B)  $700 000 
C)  $ 50 000 
D)  $300 000 
A)  $750 000 
B)  $700 000 
C)  $ 50 000 
D)  $300 000

Question 7

_______________ decisions are decisions relating to an entity's mix of debt and equity.

Accepted Answer

The answer of _______________ decisions are decisions relating to an...

Question 8

M.Strong purchases 500 shares of Maxwell Ltd that were listed on the stock exchange.As a result of this transaction,the total equity of Maxwell Ltd will:

Accepted Answer

A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  be greater than total assets. 
A)  increase. 
B)  decrease. 
C)  remain unchanged. 
D)  be greater than total assets.

Question 9

A company transfers $10 000 from the retained earnings account to a general reserve account.The effect of this transfer on the company's balance sheet is:

Accepted Answer

A)  total shareholders' equity will decrease. 
B)  total shareholders' equity remains unchanged. 
C)  total shareholders' equity will increase. 
D)  total shareholders' equity will decrease and assets will decrease. 
A)  total shareholders' equity will decrease. 
B)  total shareholders' equity remains unchanged. 
C)  total shareholders' equity will increase. 
D)  total shareholders' equity will decrease and assets will decrease.

Question 10

Which of the following assets is not required to be depreciated/amortised?

Accepted Answer

A)  Machinery. 
B)  Motor vehicles. 
C)  Land. 
D)  Trademarks. 
A)  Machinery. 
B)  Motor vehicles. 
C)  Land. 
D)  Trademarks.

Question 11

Which of the following would not be classified as 'cash and cash equivalents'?

Accepted Answer

A)  Accounts receivable. 
B)  Short-term deposits. 
C)  Cash at bank. 
D)  Petty cash. 
A)  Accounts receivable. 
B)  Short-term deposits. 
C)  Cash at bank. 
D)  Petty cash.

Question 12

____________ (general/special)-purpose financial statements are prepared by a reporting entity to meet the decision-making needs of its managers.

Accepted Answer

The answer of ____________ (general/special)-purpose financial statements are prepared by...

Question 13

Which of these is not a current liability?

Accepted Answer

A)  Dividend payable. 
B)  Accounts payable. 
C)  General reserve. 
D)  Accrued expenses. 
A)  Dividend payable. 
B)  Accounts payable. 
C)  General reserve. 
D)  Accrued expenses.

Question 14

Liabilities are known as ______________ claims on the assets of an entity.

Accepted Answer

The answer of Liabilities are known as ______________ claims on...

Question 15

The balance sheet usually reports the entity's financial position for both the current period and the previous period.This information is known as:

Accepted Answer

A)  comparative information. 
B)  comprehensive information. 
C)  financial reporting. 
D)  narrative information. 
A)  comparative information. 
B)  comprehensive information. 
C)  financial reporting. 
D)  narrative information.

Question 16

The amount recognised in the asset class 'investments accounted for using the equity method' represents:

Accepted Answer

A)  cost of shares acquired less share of other entity's profits. 
B)  share of other entity's profits only. 
C)  cost of shares acquired less share of other entity's profits plus dividends received from other entity. 
D)  cost of shares acquired plus share of other entity's profits less dividends received from other entity. 
A)  cost of shares acquired less share of other entity's profits. 
B)  share of other entity's profits only. 
C)  cost of shares acquired less share of other entity's profits plus dividends received from other entity. 
D)  cost of shares acquired plus share of other entity's profits less dividends received from other entity.

Question 17

When preparing a balance sheet various choices,__________,and estimations are made on behalf of the users of the financial information.

Accepted Answer

The answer of When preparing a balance sheet various choices,__________,and...

Question 18

Chrystal Gems Ltd was set up with share capital of $500 000.In year 1 a loss of $50 000 was recorded,in year 2 a profit of $175 000 and in year 3 a profit of $350 000.Also in year 3 a dividend of 5% of paid up capital was paid to shareholders and $20 000 was transferred from retained earnings to a general reserve.The retained earnings balance of Chrystal Gems Ltd at the end of year 3 was:

Accepted Answer

A)  $430 000 
B)  $475 000 
C)  $930 000 
D)  $530 000 
A)  $430 000 
B)  $475 000 
C)  $930 000 
D)  $530 000

Question 19

Office furniture was purchased for $15 000.The residual value of the furniture is $1000 and its useful life is estimated to be 7 years.The annual depreciation amount will be:

Accepted Answer

A)  $14 000 
B)  $2 000 
C)  $1 400 
D)  $1 000 
A)  $14 000 
B)  $2 000 
C)  $1 400 
D)  $1 000

Question 20

Select the asset that is not an identifiable intangible asset:

Accepted Answer

A)  brand name. 
B)  trademark. 
C)  development expenditure. 
D)  goodwill. 
A)  brand name. 
B)  trademark. 
C)  development expenditure. 
D)  goodwill.

If an asset's carrying amount is greater than its recoverable amount an __________ loss will need to be recognised immediately in the statement of profit or loss.

Which of the following statements about the measurement of 'fair value' is incorrect?

A revaluation surplus is a reserve account that arises when:

An accountant is required to make choices in measuring the value of:

At acquisition date,the cost price and fair value of an asset will be fairly equivalent.However,over the life of the asset,the:

Blue Sea Resort Ltd acquired all the shares in Scuba Ltd for $750 000.The fair value of the assets acquired was $1 000 000 and the fair value of the liabilities assumed was $300 000.The amount of goodwill acquired by Blue Sea Resort Ltd is:

_______________ decisions are decisions relating to an entity's mix of debt and equity.

M.Strong purchases 500 shares of Maxwell Ltd that were listed on the stock exchange.As a result of this transaction,the total equity of Maxwell Ltd will:

A company transfers $10 000 from the retained earnings account to a general reserve account.The effect of this transfer on the company's balance sheet is:

Which of the following assets is not required to be depreciated/amortised?

Which of the following would not be classified as 'cash and cash equivalents'?

____________ (general/special)-purpose financial statements are prepared by a reporting entity to meet the decision-making needs of its managers.

Which of these is not a current liability?

Liabilities are known as ______________ claims on the assets of an entity.

The balance sheet usually reports the entity's financial position for both the current period and the previous period.This information is known as:

The amount recognised in the asset class 'investments accounted for using the equity method' represents:

When preparing a balance sheet various choices,__________,and estimations are made on behalf of the users of the financial information.

Office furniture was purchased for $15 000.The residual value of the furniture is $1000 and its useful life is estimated to be 7 years.The annual depreciation amount will be:

Select the asset that is not an identifiable intangible asset:

Introduction to Accounting and Business Decision Making

Accounting in Society

Business Structures

Business Transactions

Statement of Profit or Loss and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Costvolumeprofit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Performance Measurement

Filters

Exam 5: Balance Sheet

If an asset's carrying amount is greater than its recoverable amount an __________ loss will need to be recognised immediately in the statement of profit or loss.

Which of the following statements about the measurement of 'fair value' is incorrect?

A revaluation surplus is a reserve account that arises when:

An accountant is required to make choices in measuring the value of:

At acquisition date,the cost price and fair value of an asset will be fairly equivalent.However,over the life of the asset,the:

Blue Sea Resort Ltd acquired all the shares in Scuba Ltd for $750 000.The fair value of the assets acquired was $1 000 000 and the fair value of the liabilities assumed was $300 000.The amount of goodwill acquired by Blue Sea Resort Ltd is:

_______________ decisions are decisions relating to an entity's mix of debt and equity.

M.Strong purchases 500 shares of Maxwell Ltd that were listed on the stock exchange.As a result of this transaction,the total equity of Maxwell Ltd will:

A company transfers $10 000 from the retained earnings account to a general reserve account.The effect of this transfer on the company's balance sheet is:

Which of the following assets is not required to be depreciated/amortised?

Which of the following would not be classified as 'cash and cash equivalents'?

____________ (general/special)-purpose financial statements are prepared by a reporting entity to meet the decision-making needs of its managers.

Which of these is not a current liability?

Liabilities are known as ______________ claims on the assets of an entity.

The balance sheet usually reports the entity's financial position for both the current period and the previous period.This information is known as:

The amount recognised in the asset class 'investments accounted for using the equity method' represents:

When preparing a balance sheet various choices,__________,and estimations are made on behalf of the users of the financial information.

Office furniture was purchased for $15 000.The residual value of the furniture is $1000 and its useful life is estimated to be 7 years.The annual depreciation amount will be:

Select the asset that is not an identifiable intangible asset:

Introduction to Accounting and Business Decision Making

Accounting in Society

Business Structures

Business Transactions

Statement of Profit or Loss and Statement of Changes in Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Budgeting

Costvolumeprofit Analysis

Costing and Pricing in an Entity

Capital Investment

Financing the Business

Performance Measurement

Filters