Question 1

Unwarranted changes in methods of inventory valuation breach the Conceptual Framework's qualitative characteristic of c___________________.

Accepted Answer

comparability

Question 2

The statement relating to comparability that is true is:

Accepted Answer

A) It requires an entity,as far as possible,to use the same accounting method from year to year 
B) It means a company can never change an accounting method 
C) It means all firms in the same industry should use the same accounting methods 
D) It means the same depreciation method must be employed for all classes of non-current assets 
A) It requires an entity,as far as possible,to use the same accounting method from year to year 
B) It means a company can never change an accounting method 
C) It means all firms in the same industry should use the same accounting methods 
D) It means the same depreciation method must be employed for all classes of non-current assets A

Question 3

The simplification of complex transactions in external financial reports without sacrificing relevance or faithful representation promotes the qualitative characteristic of:

Accepted Answer

A) Timeliness 
B) Relevance 
C) Materiality 
D) Understandability 
A) Timeliness 
B) Relevance 
C) Materiality 
D) Understandability D

Question 4

Under IAS 20/AASB 120,Accounting for Government Grants,it is true that:

Accepted Answer

A) Government grants relating to assets are to be credited directly to equity 
B) A government grant relating to an asset may be presented as a reduction in the carrying amount of the asset concerned 
C) A government grant relating to income may be credited directly to equity or recognised as income systematically over the periods necessary to match them with the related costs 
D) Subsidies for agricultural activities are discussed in the appendix to IAS 20/AASB 120 
A) Government grants relating to assets are to be credited directly to equity 
B) A government grant relating to an asset may be presented as a reduction in the carrying amount of the asset concerned 
C) A government grant relating to income may be credited directly to equity or recognised as income systematically over the periods necessary to match them with the related costs 
D) Subsidies for agricultural activities are discussed in the appendix to IAS 20/AASB 120

Question 5

Which of these is not an aspect of the Conceptual Framework's constraint of timeliness?

Accepted Answer

A) The frequency of the reporting period, 
B) The delay in publication of the financial reports after the end of the financial period 
C) Preparing financial reports for a 12 month period 
D) Having information available in time to influence decisions 
A) The frequency of the reporting period, 
B) The delay in publication of the financial reports after the end of the financial period 
C) Preparing financial reports for a 12 month period 
D) Having information available in time to influence decisions

Question 6

Though the AASB has developed a set of accounting standards which when applied allow entities to assert that their financial statements comply with IASB standards,there are a number of ways in which Australian standards differ from international standards.How many of these are such a way?
i.The AASB has continued to issue accounting standards where no IASB equivalent exists,e.g.AASB 1031 Materiality.
ii.Some Australian standards require more information to be disclosed than the equivalent IASB standard
iii.Australian standards contain,where applicable,extra paragraphs relevant to entities in the public and not-for-profit sectors

Accepted Answer

A) 0 
B) 1 
C) 2 
D) 3 
A) 0 
B) 1 
C) 2 
D) 3

Question 7

The major reason for the existence of Generally Accepted Accounting Principles is:

Accepted Answer

A) To make accountants legally liable for errors 
B) To increase business profits 
C) To improve the standard of accounting information for decision-making 
D) To create work for accountants 
A) To make accountants legally liable for errors 
B) To increase business profits 
C) To improve the standard of accounting information for decision-making 
D) To create work for accountants

Question 8

The qualitative characteristics for financial reporting contained in the Conceptual Framework are:

Accepted Answer

A) Relevance,reliability,materiality,consistency,verifiability,understandability 
B) Understandability,timeliness,relevance,readability,timeliness,reliability 
C) Relevance,faithful representation,comparability,understandability,verifiability,timeliness 
D) Uniformity,relevance,reliability,consistency,faithful representation 
A) Relevance,reliability,materiality,consistency,verifiability,understandability 
B) Understandability,timeliness,relevance,readability,timeliness,reliability 
C) Relevance,faithful representation,comparability,understandability,verifiability,timeliness 
D) Uniformity,relevance,reliability,consistency,faithful representation

Question 9

R________________ means the process of incorporation of accounting information into the income statement and the balance sheet.

Accepted Answer

The answer of R________________ means the process of incorporation of...

Question 10

According to the Conceptual Framework information that is free from material error and bias has greater:

Accepted Answer

A) Comparability 
B) Materiality 
C) Faithful representativeness 
D) Understandability 
A) Comparability 
B) Materiality 
C) Faithful representativeness 
D) Understandability

Question 11

An a_______________ is defined in the Conceptual Framework as a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.

Accepted Answer

The answer of An a_______________ is defined in the Conceptual...

Question 12

The accounting standards dealing with income are:

Accepted Answer

A) IAS 8/AASB 108 
B) IAS 4/AASB 104 
C) IAS 24/AASB 224 
D) IAS 18/AASB 118 
A) IAS 8/AASB 108 
B) IAS 4/AASB 104 
C) IAS 24/AASB 224 
D) IAS 18/AASB 118

Question 13

As from 1 January 2005 Australia adopted i____________ accounting standards.

Accepted Answer

The answer of As from 1 January 2005 Australia adopted...

Question 14

The capital maintenance concept underlying the traditional historical cost system is maintaining intact:

Accepted Answer

A) the purchasing power of equity at the beginning of the period 
B) the current value of equity at the beginning of the period 
C) the dollar value of equity at the beginning of the period 
D) the realisable value of equity at the beginning of the period 
A) the purchasing power of equity at the beginning of the period 
B) the current value of equity at the beginning of the period 
C) the dollar value of equity at the beginning of the period 
D) the realisable value of equity at the beginning of the period

Question 15

The AASB has examined a number of different accounting measurement systems that may be used in the future as alternatives to the historical cost system.Which of these is not one of those systems?

Accepted Answer

A) General price level accounting 
B) Barter value accounting 
C) Relative current value accounting 
D) Current value accounting 
A) General price level accounting 
B) Barter value accounting 
C) Relative current value accounting 
D) Current value accounting

Question 16

The true statement about general purpose financial reports GPFRs)is:

Accepted Answer

A) The IASB's Conceptual Framework and SAC 4 have different definitions of GPFRs 
B) There is no clear definition of GPFRs in the IASB's Conceptual Framework 
C) The IASB's Conceptual Framework and SAC2 have the same definition of GPFRs 
D) Neither the IASB's conceptual Framework or SAC 2 contain a definition of GPFRs 
A) The IASB's Conceptual Framework and SAC 4 have different definitions of GPFRs 
B) There is no clear definition of GPFRs in the IASB's Conceptual Framework 
C) The IASB's Conceptual Framework and SAC2 have the same definition of GPFRs 
D) Neither the IASB's conceptual Framework or SAC 2 contain a definition of GPFRs

Question 17

The body in Australia which issues legally enforceable accounting standards that apply to companies is:

Accepted Answer

A) Australian Accounting Standards Board 
B) Australian Securities and Investments Commission 
C) Australian Securities Exchange 
D) Financial Accounting Standards Board 
A) Australian Accounting Standards Board 
B) Australian Securities and Investments Commission 
C) Australian Securities Exchange 
D) Financial Accounting Standards Board

Question 18

According to the Conceptual Framework which of these is not an essential characteristic of an asset?

Accepted Answer

A) It must have been acquired for money 
B) There must be future economic benefits 
C) The entity must have control over the future economic benefits 
D) The event giving rise to the entity's control over the resource must have occurred 
A) It must have been acquired for money 
B) There must be future economic benefits 
C) The entity must have control over the future economic benefits 
D) The event giving rise to the entity's control over the resource must have occurred

Question 19

The objective of financial reporting is to provide information useful in making economic d___________________.

Accepted Answer

The answer of The objective of financial reporting is to...

Question 20

Select the incorrect statement concerning accounting standards.

Accepted Answer

A) They improve the comparability of financial reports 
B) They only apply to companies 
C) They guide the preparation of reliable financial reports 
D) They evolve with changes in business requirements 
A) They improve the comparability of financial reports 
B) They only apply to companies 
C) They guide the preparation of reliable financial reports 
D) They evolve with changes in business requirements

Exam 17: Regulation and the Conceptual Framework

Unwarranted changes in methods of inventory valuation breach the Conceptual Framework's qualitative characteristic of c___________________.

The statement relating to comparability that is true is:

The simplification of complex transactions in external financial reports without sacrificing relevance or faithful representation promotes the qualitative characteristic of:

Under IAS 20/AASB 120,Accounting for Government Grants,it is true that:

Which of these is not an aspect of the Conceptual Framework's constraint of timeliness?

The major reason for the existence of Generally Accepted Accounting Principles is:

The qualitative characteristics for financial reporting contained in the Conceptual Framework are:

R________________ means the process of incorporation of accounting information into the income statement and the balance sheet.

According to the Conceptual Framework information that is free from material error and bias has greater:

An a_______________ is defined in the Conceptual Framework as a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.

The accounting standards dealing with income are:

As from 1 January 2005 Australia adopted i____________ accounting standards.

The capital maintenance concept underlying the traditional historical cost system is maintaining intact:

The AASB has examined a number of different accounting measurement systems that may be used in the future as alternatives to the historical cost system.Which of these is not one of those systems?

The true statement about general purpose financial reports GPFRs)is:

The body in Australia which issues legally enforceable accounting standards that apply to companies is:

According to the Conceptual Framework which of these is not an essential characteristic of an asset?

The objective of financial reporting is to provide information useful in making economic d___________________.

Select the incorrect statement concerning accounting standards.

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Retailing

Accounting for Systems

Accounting for Manufacturing

Cost Accounting Systems

Cash Management and Internal Control

Cost-Volume-Profit Analysis for Decision Making

Budgeting for Planning and Control

Performance Evaluation for Managers

Differential Analysis,profitability Analysis and Capital Budgeting

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Liabilities

Analysis and Interpretation of Financial Statements

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