Deck 15: Disclosure: Presentation of Financial Statements

Question 1

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)property,plant and equipment.

Answer 1

B

Question 2

Which of the following is not required to be displayed prominently in the financial statements?

A)Whether the financial statements cover the individual entity or a group of entities.
B)The names of the company's major competitors.
C)The level of rounding used in the presentation of amounts in the financial statements.
D)The currency used in the financial statements.

Answer 2

B

Question 3

Assets and liabilities,and income and expenses are not to be offset unless:

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 an Australian accounting standard.
D)the auditors approve the offset.

Answer 3

C

Question 4

According to 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 Corporations Act.
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 5

Classes of property,plant and equipment do not include which of the following?

A)Office equipment
B)Furniture and fittings
C)Inventories
D)Land and buildings

Question 6

The requirements of AASB 101 Presentation of Financial Statements apply to which of the following sets of financial statements?

A)Condensed interim financial statements
B)All purpose financial statements
C)General purpose financial statements
D)Special purpose financial statements

Question 7

Profit or loss is the total of income less expenses:

A)including the items of other comprehensive income.
B)excluding abnormal items.
C)excluding the items of other comprehensive income.
D)excluding extraordinary items.

Question 8

Which of the following is not required to be disclosed in the statement of financial position as a line item?

A)Property,plant and equipment
B)Provisions
C)Accrued audit fees
D)Deferred tax liabilities

Question 9

According to AASB 101 Presentation in Financial Statements,there must be consistency of presentation and classification of items in the financial statements from one period to the next unless:

A)a change in presentation or classification is required by another accounting standard.
B)there has been a minor change in the entity's operations.
C)the directors approve the change in presentation or classification.
D)the auditors approve the change in presentation or classification.

Question 10

AASB 101 Presentation of Financial Statements requires disclosure of which of the following for each class of share capital?

A)Par value per share.
B)The number of shares authorised.
C)The rights,preferences and restrictions attached to that class.
D)All of the above.

Question 11

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)fair value.
B)liquidity.
C)age.
D)function.

Question 12

Which of the following statements is incorrect?

A)Current assets are those assets that are realised or consumed within an entity's operating cycle.
B)For entities with diverse operations,such as retail and banking activities,a mixed basis of presentation may be appropriate.
C)An entity's operating cycle is usually 12 months but may be longer than 12 months after the reporting period.
D)An entity is permitted to classify deferred tax assets as current assets.

Question 13

AASB 101 Presentation of Financial Statements,requires which of the following items to 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 Audit and non-audit fees
VI Total other comprehensive income
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 14

Asset,liability and equity items are summarised in the:

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

Question 15

The time between the acquisition of assets for processing and their realisation into cash or cash equivalents is known as the:

A)acquisition cycle.
B)payment cycle.
C)operating cycle.
D)realisation cycle.

Question 16

Which of the following items are disclosed on the face of a statement of financial position as line items?

A)Finance costs
B)Cost of sales
C)Interest revenue
D)Biological assets

Question 17

Which of the following items are not permitted to be disclosed as separate line items on the face of the statement of financial position?

A)Investment property
B)Cash and cash equivalents
C)Deferred tax assets
D)Share of profit of associates

Question 18

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

A)Trade and other receivables
B)Sales revenue
C)Cost of goods sold
D)Share of profit of subsidiaries

Question 19

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)prescribed by the Corporations Act.

Question 20

AASB 101 Presentation of Financial Statements requires that a financial report:

A)does not need to include the reporting period or date.
B)must include the name of the entity.
C)always be prepared as if the company is not a going concern.
D)be prepared on the cash basis of accounting.

Question 21

According to AASB 101 Presentation of Financial Statements,a complete set of financial statements only comprises a statement of financial position,statement of profit or loss and other comprehensive income and a statement of cash flows.

Question 22

AASB 101 Presentation of Financial Statements requires entities to use the current/non-current method of classifying assets and liabilities in the statement of financial position.

Question 23

Interest and other costs incurred by an entity in connection with borrowing funds are known as:

A)extraordinary costs.
B)distribution costs.
C)borrowing costs.
D)repayment costs.

Question 24

A financial report must include a statement of compliance with Australian Accounting Standards.

Question 25

A reporting entity must disclose somewhere in the financial report,which of the following items of information?
I)The legal residence and form of the entity.
II)The name and location of the stock exchange on which the entity's securities are traded.
III)The address of the registered office.
IV)The country of incorporation.

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

Question 26

Recording a trade receivables balance net of an allowance for doubtful debts is an example of offsetting.

Question 27

One of the primary objectives of the statement of financial position is to provide information about an entity's financial position including its assets,liabilities and equity.

Question 28

Which of the following is not an example of an assumption that must be disclosed under AASB 101 Presentation of Financial Statements when future-oriented estimates are necessary to measure the recoverable amount of assets?

A)Useful lives
B)Future interest rates
C)Future changes in salaries
D)Future bad debts

Question 29

Categorising expenses as distribution costs and administration expenses is an example of which classification method?

A)Nature of expense method
B)Function of expense method
C)Purpose of expense method
D)None of the above

Question 30

Current assets are those assets that are realised or consumed within an entity's operating cycle.

Question 31

The requirements of AASB 101 Presentation of Financial Statements apply to both general purpose financial statements and condensed interim financial statements.

Question 32

Which of the following statements is not correct in relation to corporate social responsibility (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)There has been a decline in the number of Australian companies presenting information on socially responsible activities.
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 33

AASB 101 Presentation of Financial Statements requires each class of share capital to be separately disclosed on the face of the statement of financial position.

Question 34

Under AASB 101 Presentation of Financial Statements,profit or loss attributable to non-controlling interests is required to be disclosed 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 35

All items of income and expense that arise during a financial period must be included in profit or loss.
e.g.changes in a revaluation surplus.These items are not included in the determination of the profit or loss that arose during a financial period.Instead,the balance of equity is directly adjusted.

Question 36

An entity must present a complete set of financial statements at least annually.

Question 37

The term 'finance costs' is synonymous with:

A)advances from lenders.
B)loans payable.
C)non-current liabilities.
D)interest expense.

Question 38

Which of the following items are included in a statement of changes in equity?
I Opening and closing balances.
II Total comprehensive income 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 39

Extraordinary items of income and expense:

A)must be disclosed in the statement of profit or loss and other comprehensive income.
B)were previously disclosed together with the entity's normal trading activities.
C)must be disclosed in the notes to the financial statements.
D)are prohibited from being disclosed either in the statement of profit or loss and other comprehensive income or in the notes.

Question 40

Which of the following items must be presented as a separate line item on the face of a statement of profit or loss and other comprehensive income?

A)Cost of sales
B)Share of profit or loss of associates and joint ventures
C)Wages and salaries expense
D)Share of profit or loss of subsidiaries

Question 41

The definition of 'social responsibility' also refers to government agencies and departments.

Question 42

The amount of dividends recognised as distributions to shareholders must be disclosed in the statement of changes in equity.

Question 43

The notes are an integral part of the financial statements.

Question 44

AASB 101 Presentation of Financial Statements requires entities to disclose within the financial statements a description of the nature of the entity's operations and principal activities.

Question 45

Auditor remuneration only includes amount paid or payable to the auditor in relation to an audit or review of the entity's financial statements.

Question 46

A statement of changes in equity provides details of the changes in an entity's net assets.

Question 47

Items of income and expense can be disclosed as extraordinary items in the notes to the financial statements.

Question 48

Revenue arises from a company's ordinary activities.

Question 49

AASB 101 Presentation of Financial Statements requires a single statement approach be adopted in the preparation of the statement of profit or loss and other comprehensive income.

Question 50

Although currently voluntary,it is likely that Corporate Social Responsibility (CSR)reporting will be regulated by the introduction of an accounting standard in the near future.