Question 1

Half yearly reports are required to be prepared by:

Accepted Answer

A) small proprietary companies. 
B) disclosing entities. 
C) reporting entities. 
D) private companies. 
A) small proprietary companies. 
B) disclosing entities. 
C) reporting entities. 
D) private companies. B

Question 2

Which of the following does not involve the use of estimates by an entity in preparing its financial statements?

Accepted Answer

A) Doubtful debts expense 
B) Depreciation expense 
C) The original purchase price of an asset 
D) Employee benefit liabilities such as long-service leave 
A) Doubtful debts expense 
B) Depreciation expense 
C) The original purchase price of an asset 
D) Employee benefit liabilities such as long-service leave C

Question 3

Which of the following is not required to be disclosed in an entity's accounting policy note?

Accepted Answer

A) That the financial statements are general purpose financial statements. 
B) The measurement bases used in the preparation of the financial statements. 
C) That the financial statements have been prepared on the going concern basis. 
D) A description of the entity's key accounting policies. 
A) That the financial statements are general purpose financial statements. 
B) The measurement bases used in the preparation of the financial statements. 
C) That the financial statements have been prepared on the going concern basis. 
D) A description of the entity's key accounting policies. C

Question 4

If a mistake in applying an accounting policy is discovered in a subsequent period,that mistake must be corrected retrospectively.

Accepted Answer

A) True 
 B)False

Question 5

In determining whether an item is material,consideration must be given to:

Accepted Answer

A) its size only. 
B) both its size and nature. 
C) its nature only. 
D) none of the above. 
A) its size only. 
B) both its size and nature. 
C) its nature only. 
D) none of the above.

Question 6

The financial position of an entity as at reporting date is presented in a statement of comprehensive income.

Accepted Answer

A) True 
 B)False

Question 7

The Corporations Act allows a company the right to prepare and send a concise report to members which consists of which of the following?
I.A concise financial report drawn up in accordance with accounting standards.
II.A directors' report for the year.
III.An auditor's statement.
IV.A statement that the report is a concise report and that the full financial report and auditor's report is available if requested.

Accepted Answer

A) I,II and III only 
B) II,III and IV only 
C) III and IV only 
D) I,II,III and IV 
A) I,II and III only 
B) II,III and IV only 
C) III and IV only 
D) I,II,III and IV

Question 8

Comparative information in respect of all previous periods for all amounts reported in the financial statements must be provided.

Accepted Answer

A) True 
 B)False

Question 9

If there are difficulties in distinguishing between a change in an accounting estimate and a change in an accounting policy,the change must be treated as a change in an accounting estimate.

Accepted Answer

A) True 
 B)False

Question 10

Compliance with AASB accounting standards automatically results in meeting the Corporations Act requirements in relation to presenting a true and fair view in financial reports.

Accepted Answer

A) True 
 B)False

Question 11

Which type of financial statements is prepared for users who depend on them for information to enable them to make decisions about the allocation of scarce resources?

Accepted Answer

A) Management financial statements 
B) Short-term financial statements 
C) Specific purpose financial statements 
D) General purpose financial statements 
A) Management financial statements 
B) Short-term financial statements 
C) Specific purpose financial statements 
D) General purpose financial statements

Question 12

General purpose financial statements are prepared for users who depend on those reports for information to enable them to make decisions about the allocation of scarce resources.

Accepted Answer

A) True 
 B)False

Question 13

AASB 1048 Interpretation of Standards gives all IFRIC Interpretations the same status as AASB standards.

Accepted Answer

A) True 
 B)False

Question 14

According to AASB 108,omissions or misstatements are material if they:

Accepted Answer

A) are greater than 50% of the relevant base amount. 
B) are as a result of fraud. 
C) could influence the economic decisions that users make on the basis of the financial statements. 
D) are less than 10% of the relevant base amount. 
A) are greater than 50% of the relevant base amount. 
B) are as a result of fraud. 
C) could influence the economic decisions that users make on the basis of the financial statements. 
D) are less than 10% of the relevant base amount.

Question 15

The date at which financial statements are authorised for issue is the date on which the shareholders approve the financial statements at an annual meeting.

Accepted Answer

A) True 
 B)False

Question 16

An entity is not permitted to change its accounting policies.

Accepted Answer

A) True 
 B)False

Question 17

Adjusting events are indicative of conditions that arose after the end of the reporting period.

Accepted Answer

A) True 
 B)False

Question 18

The general information component of a Directors' Report must contain which of the following information?
I.A review of operations and the results of operations.
II.The entity's principal activities.
III.Likely future developments in the entity's operations.
IV.Whether the financial report is in accordance with the Corporations Act.

Accepted Answer

A) I,II and III only 
B) I,II and IV only 
C) II,III and IV only 
D) I,II,III and IV 
A) I,II and III only 
B) I,II and IV only 
C) II,III and IV only 
D) I,II,III and IV

Question 19

If a company is a small proprietary company,it must comply with accounting standards if directed to prepare an annual financial report by shareholders with at least:

Accepted Answer

A) 1% of the company's votes. 
B) 2% of the company's votes. 
C) 3% of the company's votes. 
D) 5% of the company's votes. 
A) 1% of the company's votes. 
B) 2% of the company's votes. 
C) 3% of the company's votes. 
D) 5% of the company's votes.

Question 20

In addition to the annual financial statements,companies have the right to choose to prepare and distribute concise financial reports to members.

Accepted Answer

A) True 
 B)False

Exam 14: Disclosure: Legal Requirements and Accounting Polices

Half yearly reports are required to be prepared by:

Which of the following does not involve the use of estimates by an entity in preparing its financial statements?

Which of the following is not required to be disclosed in an entity's accounting policy note?

If a mistake in applying an accounting policy is discovered in a subsequent period,that mistake must be corrected retrospectively.

In determining whether an item is material,consideration must be given to:

The financial position of an entity as at reporting date is presented in a statement of comprehensive income.

Comparative information in respect of all previous periods for all amounts reported in the financial statements must be provided.

If there are difficulties in distinguishing between a change in an accounting estimate and a change in an accounting policy,the change must be treated as a change in an accounting estimate.

Compliance with AASB accounting standards automatically results in meeting the Corporations Act requirements in relation to presenting a true and fair view in financial reports.

Which type of financial statements is prepared for users who depend on them for information to enable them to make decisions about the allocation of scarce resources?

General purpose financial statements are prepared for users who depend on those reports for information to enable them to make decisions about the allocation of scarce resources.

AASB 1048 Interpretation of Standards gives all IFRIC Interpretations the same status as AASB standards.

According to AASB 108,omissions or misstatements are material if they:

The date at which financial statements are authorised for issue is the date on which the shareholders approve the financial statements at an annual meeting.

An entity is not permitted to change its accounting policies.

Adjusting events are indicative of conditions that arose after the end of the reporting period.

If a company is a small proprietary company,it must comply with accounting standards if directed to prepare an annual financial report by shareholders with at least:

In addition to the annual financial statements,companies have the right to choose to prepare and distribute concise financial reports to members.

Nature and Regulation of Companies

Financing Company Operations

Company Operations

Fundamental Concepts of Corporate Governance

Fair Value Measurement

Accounting for Company Income Tax

Financial Instruments

Foreign Currency Transactions and Forward Exchange Contracts

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Impairment of Assets

Disclosure: Presentation of Financial Statements

Disclosure: Statement of Cash Flows

Disclosure: Translation of Financial Statements Into a Presentation Currency

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Investments in Joint Arrangements

Insolvency and Liquidation

Filters