Deck 5: Regulation of Accounting and Financial Reporting

Question 1

The IASB imposes the use of the classification by function.

Answer 1

False

Question 2

The different formats that exist for the presentation of the statement of financial position/balance sheet do not affect its generic content.

Answer 2

True

Question 3

Which of the following does IASB stand for?

A) Internationally Accepted Standards Board
B) International Accounting Standards Board
C) Internationally Adopted Standards Board
D) Internationally Acknowledged Standards Board

Answer 3

B

Question 4

Which of the following is not 'off balance sheet' information?

A) Litigation in which the firm is involved
B) Bank borrowings
C) Hypotheses used in valuing specific assets such as rate of recovery of accounts receivable
D) Hypotheses used in valuing specific liabilities such as provisions for pensions

Question 5

The profit and loss account in the UK is generally called the ____ in the USA.

A) Revenue and expense account
B) Result account
C) Income generation account
D) None of these.

Question 6

Which categories are used to classify liabilities?

A) Short term versus long term
B) Financial versus operating/trading
C) Interest-bearing versus non-interest bearing
D) All of these.

Question 7

For the statement of financial position/balance sheet,the 'single-step' format provides more detail than the 'multiple-step' format.

Question 8

An annual report includes:

A) A letter to the shareholders
B) A management report
C) Financial statements
D) All of these

Question 9

IAS 1 specifies that: 'an entity shall disclose the amount expected to be recovered or settled after more than ____ months for each asset and liability line item that combines amounts expected to be recovered or settled: (a)no more than ____ months after the reporting period,and (b)more than ____ months after the reporting period'

A) Three
B) Six
C) Twelve
D) Twenty-four

Question 10

What is the main objective of the IASB?

A) To develop,in the public interest,a single set of high quality,understandable and enforceable global accounting standards that require high quality,transparent and comparable information in financial statements and other financial reporting to help participants in the world's capital markets and other users make economic decisions.
B) To promote the use and rigorous application of those standards.
C) To bring about convergence of national accounting standards and International Accounting Standards and International Financial Reporting Standards to high quality solutions.
D) All of these.

Question 11

Which of the following is not a fixed asset?

A) Machinery and equipment
B) Inventories
C) Building
D) Land

Question 12

According to IAS 1,the purpose(s)of the notes to financial statements is (are):

A) To present information about the basis of preparation of the financial statements and the specific accounting policies used in accordance with paragraphs 117-124 [which deal with 'Disclosure of Accounting Policies'];.
B) To disclose the information required by IFRS Standards that is not presented elsewhere in the financial statements;.
C) To provide information that is not presented elsewhere in the financial statements,but is relevant to an understanding of any of them.
D) All of these.

Question 13

There are several different ways of presenting an income statement but they all provide the same bottom line.

Question 14

Which of the following is a financial liability?

A) Bank overdraft
B) Debt to tax authorities
C) Advance payment received from customers
D) Accounts payable

Question 15

The international standards now applicable are called IAS Standards or IFRS Standards.

Question 16

Which type of companies traditionally publish an annual report?

A) Listed companies
B) Small companies
C) Foreign companies
D) All companies

Question 17

The IASB has no authority to require compliance with its accounting standards.

Question 18

In 2001,the IASB replaced the IASC.What does IASC stand for?

A) International Accounting Standards Council
B) Internationally Accepted Standards Committee
C) International Accounting Standards Committee
D) Internationally Accepted Standards Council

Question 19

Accounting terminology differs from one country to another.Which terms deal with the same concept respectively in US,UK and IASB terminology?

A) Long-term/Fixed/Non-current Assets
B) Short-term/Fixed/Non-current Assets
C) Long-term/Fixed/Non-operating Assets
D) Long-term/Tangible/Non-current Assets