Practical Accounting 1 Reviewer

1. When an economy ceases to be hyperinflationary, an entity shall discontinue the

preparation and presentation of financial statements under a condition of
hyperinflationary economy. Thus the amount expressed in the measuring unit current at
the end of the previous reporting period shall be the
a. the present Value amount in the subsequent financial statement.
b. the carrying amount in the subsequent financial statement.
c. the fairvalue amount in the subsequent financial statement.
d. the historical Value amount in the subsequent financial statement.
2. Irrespective of whether there is any indication of impairment , an entity shall test a not
tangible asset with an indefinite useful life or an intangible asset not yet available for use
for impairment\
a. every three years\
b. annually
c. intangible assets not yet available for use, annually and not tangible assets every
three years
d. intangible assets not yet available for use, every three years and not tangible
assets Annually
3. Depreciation of an asset begins when
a. It was acquired
b. It is available for use
c. It was assembled in its location
d. When the management decides to do so.
4. the initial direct cost in a direct financing lease are added to the carrying amount of the
leased asset and this would effectively spread the initial direct cost over the lease term
and reduce the amount of
a. interest expense
b. interest income