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Quiz Bee_pa1 & Toa_easy

Quiz Bee_pa1 & Toa_easy

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11/17/2013

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RFJPIA-R12
2
ND
Annual Regional Convention 2008QUIZ BEE – PA1 & TOA
EASY ROUND
1.Which ONE of the following statements best describes the term 'liability'?
A
An excess of equity over current assets
B
Resources to meet financial commitments as they fall due
C
 The residual interest in the assets of the entity after deducting all itsliabilities
D
A present obligation of the entity arising from past events
Question 1 - D
 The correct answer is "A present obligation of the entity arising from pastevents", as defined in para 49(b) of the
Framework 
.
2.
Are the following statements true or false, according to IAS1
Presentationoffinancial statements
?(1) Dividends paid should be recognised in the statement of comprehensiveincome.(2) A loss on disposal of assets should be recognised in the statement of changes in equity.
Statement (1) Statement (2)
A
False False
B
False True
C
 True False
D
 True True
Question 3 - A
A loss on disposal of assets is recognised in the statement of comprehensiveincome because IAS16
Property, plant and equipment 
does not permitotherwise (IAS1 para 88).Dividends paid are recognised in the statement of changes in equity (IAS1para 106).
3.
 The Oakes Company has a loan due for repayment in six months' time,but Oakes has the option to refinance for repayment two years later.Oakes plans to refinance this loan.In which section of its statement of financial position should this loan bepresented, according to IAS1
Presentation of financial statements
?
(select one answer)
A
Current liabilities
B
Current assets
C
Non-current liabilities
D
Non-current assets
Question 12 - C
Because Oakes both has the right to roll over the loan beyond 12 months forthe end of the reporting period and intends to roll it over, it should bepresented as a non-current liability per para 73 of IAS1.
 
4.
Which TWO of the following should be taken into account when determiningthe cost of inventories per IAS2
Inventories
?
A
Storage costs of part-finished goods
B
 Trade discounts
C
Recoverable purchase taxes
D
Administrative costs
Question 1 - A & B
 The correct answers are trade discounts (deduct these from purchase costs)and storage costs for part-finished (but not finished) goods.See IAS2 paras 11 and 16.
5.
Which ONE of the following statements best describes the carrying amount of an asset?
A
 The cost (or an amount substituted for cost) of the asset less its residualvalue
B
 The amount at which the asset is recognized in the statement of financialposition afterdeducting any accumulated depreciation and accumulated impairmentlosses
C
 The higher of the asset's net selling price and its value in use
D
 The fair value of the asset at the date of a revaluation less any subsequentaccumulatedimpairment losses
Question 3 - B
 The correct answer is "The amount … in the statement of financial position …after accumulated depreciation and … impairment losses".IAS16 para 6 defines the carrying amount.
6.
Which ONE of the following statements best describes the term'depreciation'?
A
 The systematic allocation of an asset's cost less residual value over itsuseful life
B
 The removal of an asset from an entity's statement of financial position
C
 The amount by which the recoverable amount of an asset exceeds itscarrying amount
D
 The amount by which the carrying amount of an asset exceeds itsrecoverable amount
Question 5 - A
"The systematic allocation of an asset's cost…" is the correct answer.See IAS16 para 6 for definitions.
7.
 The Mirror Company classified a non-current asset accounted for underthe cost model as held for sale on 31 December 20X6. Because no offerswere received at an acceptable price, Mirror decided on 1 July 20X7 not tosell the asset, but to continue to use it. In accordance with IFRS5
Non-current assets held for sale and discontinued operations
, the asset shouldbe measured on 1 July 20X7 at
(select one answer)
A
the lower of its carrying amount and its recoverable amount
B
the higher of its carrying amount and its recoverable amount
 
C
the lower of its carrying amount on the basis that it had never beenclassified as held for sale and its recoverable amount
D
the higher of its carrying amount on the basis that it had never beenclassified as held for sale and its recoverable amount
Question 2 - C
IFRS5 para 27 in effect requires an entity ceasing to classify an asset as heldfor sale to remeasure it as if it had never been held for sale, subject to animpairment test (the recoverable amount test) at that date.
8.
A brand name that was acquired separately should initially be recognized ,according to IAS38
Intangible assets
, at
(select one answer)
A
recoverable amount
B
either cost or fair value at the choice of the acquirer
C
fair value
D
cost
Question 5 - D
IAS38 para 24 states that an intangible asset should be recognised initially atcost.
9.
 The Naylor Company has determined that it needs to recognise animpairment loss on each of two non-current assets; plant and land. Therelevant amounts are as follows:
Plant Land
Original costCU700,000 CU1,400,000Previous revaluations Nil CU450,000Existing carrying amount CU700,000 CU1,850,000Impairment loss to be recognised in year CU200,000 CU300,000According to IAS36
Impairment of assets
, how should each of the impairmentlosses be recognised?
Plant Lan
A
In profit or loss In profit or loss
B
In profit or lossIn other comprehensive income
C
In other comprehensive incomeIn profit or loss
D
In other comprehensive incomeIn other comprehensive income
Question 9 - B
IAS36 paras 60-61 state that impairment losses on assets that have not beenrevalued are recognised in profit or loss. Impairment losses on revaluedassets are treated as a revaluation decrease.
10.
 The Snowfinch Company is closing one of its operating divisions, and theconditions for making restructuring provisions in IAS37
Provisions,contingent liabilities and contingent assets
have been met. The closurewill happen in the first quarter of the next financial year. At the currentyear end, the company has announced the formal plan publicly and iscalculating the restructuring provision. Which ONE of the following costsshould be included in the restructuringprovision?
A
Retraining staff continuing to be employed
B
Relocation costs relating to staff moving to other divisions

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