Deck 19: Financial Statement Presentation

Question 1

Which of the following items, if it exists, must be presented as a line item in the statement of financial position?

A) Trade and other receivables
B) Revenue
C) Cost of sales
D) Share of profit of associates.

Answer 1

A

Question 2

Which of the following note disclosures are NOT required by AASB 101?

A) Sources of estimation uncertainty in relation to impairment of assets
B) Dividends declared after end of reporting period but before the financial statements are authorised for issue
C) the country of incorporation of the entity
D) the names and qualifications of all directors of the entity

Answer 2

D

Question 3

Included in a statement of changes in equity are the following items:
I Opening and closing balances.
II Profit or loss for the period.
III Gains or losses not recognised in the statement of profit or loss and other comprehensive income.
IV New share issues.
V Dividends paid.

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

Answer 3

D

Question 4

The primary source of information about an entity's financial position is to be found in its:

A) statement of profit or loss and other comprehensive income
B) statement of financial position
C) statement of changes in equity
D) statement of cash flows.

Question 5

According to AASB 101, a required format for the presentation of a statement of financial position is:

A) not prescribed and no guidance is provided in the standard
B) not prescribed but guidance is provided in the standard for a suitable format
C) prescribed by the standard
D) not prescribed by the standard but details are found in the Corporations Act.

Question 6

In respect to the statement of profit or loss and other comprehensive income of an entity, AASB 101 prescribes:

A) a fixed format for the presentation of items in the statement of profit or loss and other comprehensive income
B) line items that are considered to be of sufficient importance to warrant presentation
C) the presentation of line items of revenue, but not of income
D) the presentation of line items comprising total expenses, but not line items comprising total revenue.

Question 7

The following are normally presented in a statement of financial position as current items:

A) deferred tax liabilities
B) accounts payable
C) deferred tax assets
D) goodwill.

Question 8

The requirements of AASB 101 apply to the following sets of financial statements:

A) condensed financial statements
B) interim financial statements
C) general-purpose financial statements
D) special purpose financial statements.

Question 9

At reporting date for Year 1, Elpha Limited had a loan from its bankers that it expected to settle within three months. The loan term was renegotiated after reporting date and before the authorisation date of the financial statements, and the repayment date was extended by two years. For Year 1 financial statement presentation purposes this loan is classified by Elpha Limited as:

A) a non-current liability
B) a current liability
C) a contingent liability
D) an off-statement of financial position liability.

Question 10

If a liability satisfies the following criterion it will be classified as non-current:

A) due to be settled within twelve months of the balance date
B) expected to be settled in the entity's normal operating cycle
C) due to be settled more than twelve months after the statement of financial position date
D) it is held primarily for the purpose of being traded.

Question 11

An entity is required to classify its assets and liabilities as current or non-current unless it is considered more relevant and provide more reliable information to present them according to their:

A) value
B) liquidity
C) age
D) physical nature.

Question 12

Items that are dissimilar in nature must be presented separately in financial statements unless:

A) they are immaterial;
B) they are financial items in which case they can be off-set;
C) the directors approve of an aggregation of the items;
D) the auditors approval to aggregate the items is obtained.

Question 13

Where an accounting estimate has been revised materially the item is:

A) to be accounted for retrospectively;
B) not required to be recognised in the current period;
C) to be accounted prospectively;
D) to be adjusted in the comparative numbers of previous periods.

Question 14

Typically industries where operating cycles may exceed twelve months include:

A) food preparation
B) manufacturing
C) retail
D) real estate development.

Question 15

According to AASB 101, a required format for the presentation of the statement of profit or loss and other comprehensive income is:

A) prescribed by the standard
B) not prescribed and no guidance is provided in the standard for a suitable format
C) not prescribed but guidance is provided in the standard for a suitable format
D) prescribed by the standard and further details are found in the Corporations Act.

Question 16

Under AASB 101 profit or loss attributable to non-controlling interests is prescribed for presentation in:

A) an equity statement
B) a statement of financial position
C) a statement of profit or loss and other comprehensive income
D) a statement of cash flows.

Question 17

Under AASB 101 Presentation of Financial Statements, which of the following items is disclosed separately on the face of a statement of financial position?

A) Income tax expense
B) Revenue
C) Investment property
D) Profit attributable to members of the parent.

Question 18

AASB 101 requires the following items to be disclosed separately in the statement of profit or loss and other comprehensive income:
I Cost of sales.
II Revenue.
III Finance costs.
IV Share of the profit or loss from associates.
V Tax expense relating to extraordinary events.
VI Tax expense relating to ordinary activities.
VII Profit or loss.

A) I, II, VI and VII only
B) I, II, III and V only
C) II, III, IV, VI and VII only
D) I, III, V and VII only.

Question 19

Which of the following items, if it exists, does NOT have to be presented as a line item on the face of a statement of profit or loss and other comprehensive income?

A) revenue
B) closing inventory
C) profit or loss attributable to non-controlling interests
D) post-tax profit or loss of discontinued operations.

Question 20

Assets and liabilities, and income and expenses may be off-set if:

A) they are financial assets and liabilities;
B) they are in respect of borrowing and lending activities such as interest revenue and interest expense;
C) required or permitted by a standard;
D) there is no tax effect.

Question 21

In relation to 'retained earnings', AASB 101 mandates the following disclosures:
I) Any changes during the reporting period.
II) The related tax adjustments in respect to any changes during the period.
III) The beginning balance.
IV) The balance at reporting date.

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

Question 22

Which of the following is NOT an example of an adjusting event under AASB 110?

A) the settlement after reporting date but prior to the date that the financial statements are authorised for issue of a court case which had commenced prior to reporting date.
B) the sale of inventories after reporting date but prior to the date that the financial statements are authorised for issue for an amount below cost.
C) uninsured damage to a material item of machinery after reporting date but prior to the date that the financial statements are authorised for issue for an amount below cost.
D) receipt of advice after reporting date but prior to the date that the financial statements are authorised for issue that a material debtor has been placed in liquidation.

Question 23

The issuing of bonus shares in lieu of a cash dividend would be separately disclosed in an entity's

A) Statement of Financial Position
B) Statement of Comprehensive Income
C) Statement of Changes in Equity
D) Statement of Cash Flows

Question 24

Included in a statement of changes in equity are the following items:
I $\quad$ Opening and closing balances
II $\quad$ Profit or loss for the period.
III $\quad$ New share issues.
IV $\quad$ Dividends paid.

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

Question 25

The application of International Financial Reporting Standards with additional disclosure where necessary is presumed to result in financial statements that:

A) will result in a fair presentation;
B) contain only material items;
C) are free from error and misstatement;
D) are unbiased.

Question 26

Which of the following statements in relation to errors is correct?

A) Errors must be accounted for on a retrospective basis.
B) Under the "all inclusive" concept of profit, accounting errors must be recognised in profit and loss for the period.
C) All errors, regardless of their size must be corrected as soon as they are discovered.
D) Where the error is considered to be fundamental, the prior year financial statements must be recalled and reissued.

Question 27

Under AASB 101, financial statements must be prepared and presented at least:

A) annually;
B) half-yearly;
C) each three months;
D) at the end of each month of operations.

Question 28

A set of financial statement prepared in accordance with AASB 101 comprises:
I) A statement of financial position
II)A statement of profit or loss and other comprehensive income
III) A statement of cash flows.
IV) A statement of changes in equity.
V) Notes.

A) I, II, and IV;
B) I, II, III IV and V:
C) I, III and IV;
D) I, II, III and IV.

Question 29

Which of the following events occurring after the reporting date but before the financial report is authorised for issue is NOT an example of an adjusting event?

A) a decline in the market value of a listed security
B) the notification of the insolvency of a debtor
C) an event that indicates that the going concern basis of accounting may not be appropriate.
D) the sale of inventories after the reporting date for an amount below cost

Question 30

If an entity receives information after end of reporting period that one of its assets was impaired at end of reporting period by a material amount it must:

A) adjust the amounts recognised in the financial statements to reflect the impairment;
B) notify all shareholders in writing;
C) disclose the impairment in the notes but not recognise the amount in the financial statements;
D) include the impairment loss as a contingent liability.