Deck 13: Disclosure: Presentation of Financial Statements

Question 1

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.

Answer 1

C

Question 2

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.

Answer 2

B

Question 3

AASB 101 Presentation of Financial Statements,requires the following items be disclosed separately on the face of 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.

Answer 3

C

Question 4

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 5

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 6

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 7

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.

Question 8

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

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

Question 9

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 10

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 11

At balance 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 balance 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 12

According to AASB 101 AASB 101 Presentation of Financial Statements,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 13

Which of the following statements is not correct in relation to CSR reporting?

A)Social responsibility is the responsibility of an organisation for the impacts of its decisions and activities on society and the environment,through transparent and ethical behaviour.
B)Many companies choose not to prepare CSR reports due to concerns over the effect on the branding and reputations of companies
C)Currently there are no accounting standards requiring CSR reporting by Australian companies.
D)It is likely that CSR reporting will continue to be driven by community concerns with global warming and the impact of company activities on the environment.

Question 14

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)there is a legal right of set-off and it is permitted by a standard;
D)there is no tax effect.

Question 15

Identify the components of a financial report.

Question 16

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

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

Question 17

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 18

According to AASB 101 Presentation of Financial Statements,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 19

Typically industries where operating cycles may exceed twelve months include:

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

Question 20

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 21

Explain how an entity should decide whether to disclose expenses on the basis of nature or function.

Question 22

Explain what is meant by a reclassification adjustment

Question 23

Explain the options available for the presentation of the statement of profit or loss and other comprehensive income.
a.a single statement of profit or loss and other comprehensive income with profit or loss and other comprehensive income presented in two sections.If this format is used then the two sections are to be presented together with the profit or loss section presented first followed directly by the other comprehensive income section
b.a separate statement of profit or loss immediately followed by a statement of comprehensive income.

Question 24

Identify the different classes of equity that require disclosure in the statement of changes in equity.