Question 1

Which of the following events is not a past event generating a liability?

Accepted Answer

A)  Purchase of raw materials on credit 
B)  Receipt of a bank loan 
C)  Acquisition of goods paid on delivery 
D)  Receipt of prepayment for services 
A)  Purchase of raw materials on credit 
B)  Receipt of a bank loan 
C)  Acquisition of goods paid on delivery 
D)  Receipt of prepayment for services C

Question 2

Which of the following items is not considered a fringe benefit?

Accepted Answer

A)  Vacation pay 
B)  Employer's portion of social security 
C)  Employer's share of employees' pension contributions 
D)  Employer's portion of employees' health insurance premiums 
A)  Vacation pay 
B)  Employer's portion of social security 
C)  Employer's share of employees' pension contributions 
D)  Employer's portion of employees' health insurance premiums B

Question 3

Liabilities (in the strict sense)are equivalent to:

Accepted Answer

A)  Provisions. 
B)  Accrued liabilities. 
C)  Contingent liabilities. 
D)  None of these 
A)  Provisions. 
B)  Accrued liabilities. 
C)  Contingent liabilities. 
D)  None of these D

Question 4

Who can be liability funds providers?

Accepted Answer

A)  Financial institutions 
B)  Suppliers 
C)  Tax authorities 
D)  All of these. 
A)  Financial institutions 
B)  Suppliers 
C)  Tax authorities 
D)  All of these.

Question 5

Which element(s)regarding the finance leases should be disclosed?

Accepted Answer

A)  For each class of asset,the net carrying amount at the balance sheet date. 
B)  Contingent rents recognized in income for the period. 
C)  Reconciliation between the total of future minimum lease payments at the balance sheet date,and their present value. 
D)  All of these 
A)  For each class of asset,the net carrying amount at the balance sheet date. 
B)  Contingent rents recognized in income for the period. 
C)  Reconciliation between the total of future minimum lease payments at the balance sheet date,and their present value. 
D)  All of these

Question 6

The selling price of a bond should be equal to the present value of the future cash flows the lender will receive,i.e. ,all the interest payments and the reimbursement of the principal.In this computation,which interest rate (also called discount)is used?

Accepted Answer

A)  The inflation rate 
B)  The market rate of interest at the issue date for like instruments with similar risk. 
C)  Bank rate 
D)  None of these 
A)  The inflation rate 
B)  The market rate of interest at the issue date for like instruments with similar risk. 
C)  Bank rate 
D)  None of these

Question 7

A provision is an obligation that could eventually be reversed because some degree of estimation is involved in its amount and timing.

Accepted Answer

A) True 
 B)False

Question 8

If the assumed discount rate is 6% and the stated rate is 8%,the bonds will sell:

Accepted Answer

A)  At par value. 
B)  At a discount. 
C)  At a premium. 
D)  None of these 
A)  At par value. 
B)  At a discount. 
C)  At a premium. 
D)  None of these

Question 9

What is the term used for the amount that will be given to the bondholder on the date of redemption?

Accepted Answer

A)  Principal 
B)  Face value 
C)  Maturity value 
D)  All of these. 
A)  Principal 
B)  Face value 
C)  Maturity value 
D)  All of these.

Question 10

Quasi-liabilities are obligations for which of the following?

Accepted Answer

A)  The triggering event may not come from a transaction with a third party 
B)  The timing of the obligation may not be clear 
C)  The amount may not be well defined 
D)  Any combination of the three previous answers 
A)  The triggering event may not come from a transaction with a third party 
B)  The timing of the obligation may not be clear 
C)  The amount may not be well defined 
D)  Any combination of the three previous answers

Question 11

A business's financing needs come essentially from:

Accepted Answer

A)  Growth. 
B)  The operating cycle. 
C)  Temporary imbalances in the equilibrium between the various components of the operating cycle. 
D)  A combination of the three previous factors. 
A)  Growth. 
B)  The operating cycle. 
C)  Temporary imbalances in the equilibrium between the various components of the operating cycle. 
D)  A combination of the three previous factors.

Question 12

Under IFRS 16,all leases must adopt the treatment formerly adopted for operating leases.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is not correct?

Accepted Answer

A)  A bond is a certificate allowing the division of a debt between large numbers of investors,each of whom can contribute only a small amount of the debt. 
B)  If the face value of a bond is important,it makes this lending instrument accessible to a large public. 
C)  The bond or certificate shows the evidence of the claim held by the bondholder. 
D)  In the aggregate the bond issue may represent a very large amount of borrowed funds to cover all or part of the company's financing needs. 
A)  A bond is a certificate allowing the division of a debt between large numbers of investors,each of whom can contribute only a small amount of the debt. 
B)  If the face value of a bond is important,it makes this lending instrument accessible to a large public. 
C)  The bond or certificate shows the evidence of the claim held by the bondholder. 
D)  In the aggregate the bond issue may represent a very large amount of borrowed funds to cover all or part of the company's financing needs.

Question 14

Contingent liabilities are recognized in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

What is the term used for the types of bonds which are all repaid in fine?

Accepted Answer

A)  Term bonds 
B)  Serial bonds 
C)  Maturity bonds 
D)  Installment bonds 
A)  Term bonds 
B)  Serial bonds 
C)  Maturity bonds 
D)  Installment bonds

Question 16

Which of the following statements is not correct?

Accepted Answer

A)  Employers pay salaries or wages to their employees in exchange for their labor. 
B)  Salaries are paid on a periodic basis as a fixed installment of an agreed upon total amount defined as the remuneration for the person making her or his services available to the employer for an agreed upon annual number of hours. 
C)  Salaries are dependent on the level of occupation the employer will be able to provide. 
D)  Wages refer to the payment of an amount defined by an agreed hourly rate or piecework applied to the actual number of units of labor provided during the period for which the wages are calculated. 
A)  Employers pay salaries or wages to their employees in exchange for their labor. 
B)  Salaries are paid on a periodic basis as a fixed installment of an agreed upon total amount defined as the remuneration for the person making her or his services available to the employer for an agreed upon annual number of hours. 
C)  Salaries are dependent on the level of occupation the employer will be able to provide. 
D)  Wages refer to the payment of an amount defined by an agreed hourly rate or piecework applied to the actual number of units of labor provided during the period for which the wages are calculated.

Question 17

Which of the following items is not a current liability?

Accepted Answer

A)  Notes payable 
B)  Income taxes payable 
C)  Accounts payable 
D)  Inventories 
A)  Notes payable 
B)  Income taxes payable 
C)  Accounts payable 
D)  Inventories

Question 18

Which of the following items is not part of working capital?

Accepted Answer

A)  Trade payables 
B)  Cash 
C)  Trade receivables 
D)  Accruals for employee 
A)  Trade payables 
B)  Cash 
C)  Trade receivables 
D)  Accruals for employee

Question 19

Which of the following examples does not constitute a situation in which a provision for restructuring is created?

Accepted Answer

A)  Sale or termination of a line of business. 
B)  Changes in management structure,for example,eliminating a layer of management. 
C)  Litigation with one of the major customers. 
D)  Fundamental reorganizations that have a material effect on the nature and focus of the entity's operations. 
A)  Sale or termination of a line of business. 
B)  Changes in management structure,for example,eliminating a layer of management. 
C)  Litigation with one of the major customers. 
D)  Fundamental reorganizations that have a material effect on the nature and focus of the entity's operations.

Question 20

For the IASB,a provision should be recognized when:

Accepted Answer

A)  An entity has a present obligation as a result of a past event. 
B)  It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. 
C)  A reliable estimate can be made of the amount of the obligation. 
D)  All of these. 
A)  An entity has a present obligation as a result of a past event. 
B)  It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. 
C)  A reliable estimate can be made of the amount of the obligation. 
D)  All of these.

Which of the following events is not a past event generating a liability?

Which of the following items is not considered a fringe benefit?

Liabilities (in the strict sense)are equivalent to:

Who can be liability funds providers?

Which element(s)regarding the finance leases should be disclosed?

The selling price of a bond should be equal to the present value of the future cash flows the lender will receive,i.e. ,all the interest payments and the reimbursement of the principal.In this computation,which interest rate (also called discount)is used?

A provision is an obligation that could eventually be reversed because some degree of estimation is involved in its amount and timing.

If the assumed discount rate is 6% and the stated rate is 8%,the bonds will sell:

What is the term used for the amount that will be given to the bondholder on the date of redemption?

Quasi-liabilities are obligations for which of the following?

A business's financing needs come essentially from:

Under IFRS 16,all leases must adopt the treatment formerly adopted for operating leases.

Which of the following statements is not correct?

Contingent liabilities are recognized in the balance sheet.

What is the term used for the types of bonds which are all repaid in fine?

Which of the following statements is not correct?

Which of the following items is not a current liability?

Which of the following items is not part of working capital?

Which of the following examples does not constitute a situation in which a provision for restructuring is created?

For the IASB,a provision should be recognized when:

Accounting: the Language of Business

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters

Exam 12: Liabilities and Provisions

Which of the following events is not a past event generating a liability?

Which of the following items is not considered a fringe benefit?

Liabilities (in the strict sense)are equivalent to:

Who can be liability funds providers?

Which element(s)regarding the finance leases should be disclosed?

The selling price of a bond should be equal to the present value of the future cash flows the lender will receive,i.e. ,all the interest payments and the reimbursement of the principal.In this computation,which interest rate (also called discount)is used?

A provision is an obligation that could eventually be reversed because some degree of estimation is involved in its amount and timing.

If the assumed discount rate is 6% and the stated rate is 8%,the bonds will sell:

What is the term used for the amount that will be given to the bondholder on the date of redemption?

Quasi-liabilities are obligations for which of the following?

A business's financing needs come essentially from:

Under IFRS 16,all leases must adopt the treatment formerly adopted for operating leases.

Which of the following statements is not correct?

Contingent liabilities are recognized in the balance sheet.

What is the term used for the types of bonds which are all repaid in fine?

Which of the following statements is not correct?

Which of the following items is not a current liability?

Which of the following items is not part of working capital?

Which of the following examples does not constitute a situation in which a provision for restructuring is created?

For the IASB,a provision should be recognized when:

Accounting: the Language of Business

Introduction to Financial Statements

Financial Statements: Interrelations and Construction

Accounting Principles and End-Of-Period Adjustments

Regulation of Accounting and Financial Reporting

Revenue Recognition Issues

Tangible Fixed Assets

Intangible Assets

Inventories

Financial Instruments in the Statement of Financial Position and Fair Value Accounting

Shareholders Equity

Business Combinations

Income Statement Analysis

Balance Sheet Analysis

Statement of Cash Flows Construction

Statement of Cash Flows Analysis and Earnings Quality

Ratio Analysis, financial Analysis and Beyond

Filters