Ll Who issues International Financial Reporting Standards? A B c D The IFRS Advisory Committee The stock exchange The government (2 marks)12 Which groups of people are most likely to be interested in the financial statements of a sole trader? 1 vom@> sew Shareholders of the company Financial analysts 1 and 2 only 2,3 and 4 only 1, 2 and 3 only (2 marks)13 Identify, by indicating the relevant box in the table below, whether each of the following statements is, true or false. A supplier of goods on credit is interested only in the statement of financial position, ie an indication of the current state of affairs. True The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions. False (2 marks)1.4 Which of the following are advantages of trading as a limited liability company? 1 Operating as a limited liability company makes raising finance easier because additional shares can be issued to raise additional cash. 2 Operating as a limited liability company is more risky than operating as a sole trader because the shareholders of a business are liable for all the debts of the business whereas the sole trader is only liable for the debts up to the amount he has invested Lonly 2 only Both 1 and 2 Neither 1 or 2 vos (2 marks)1.5 Which of the following best describes corporate governance? A Corporate governance is the system of rules and regulations surrounding financial reporting. ‘controlled. C Corporate governance is carried out by the finance department in preparing the financial ‘statements. D Corporate governance is the system by which an entity monitors its impact on the natural environment. (2 marks)1.6 Identify which of the following statements are true or false. vous “The directors of a company are ultimately responsible for the preparation of financial statements, even if the majority of the work on them is performed by the finance department. If financial statements are audited, then the responsibility for those financial statements instead falls on the auditors instead of the directors. There are generally no laws surrounding the duties of directors in managing the affairs of @ company. 2 only 2 and 3 only land 3 only (2 marks)1.7 Which ONE of the following statements correctly describes the contents of the Statement of Financial Position? A A list of ledger balances shown in debit and credit columns B__A\list of all the assets owned and all the liabilities owed by a business: C A record of income generated and expenditure incurred over a given period D A tecord of the amount of cash generated and used by a company in a given period (2 marks)1.8 Which ONE of the following statements correctly describes the contents of the Statement of Profit or Loss? A Allist of ledger balances shown in debit and credit columns B _Allist of all the assets owned and all the liabilities owed by a business C_— Arecord of income generated and expenditure incurred over a given period D _Arecord of the amount of cash generated and used by a company in a given period (2 marks)1.9 Which of the following are TRUE of partnerships? 1 The partners’ individual exposure to debt is limited. 2 Financial statements for the partnership by law must be produced and made public. 3 A Land 2 only B 2only c D Land 3 only (2 marks)1.10 Which of the following statements is/are true? vonmre 1 and 2 only 2 only 1 and 3 only (2 marks)1.11 Which of the following statements is/are true? 1 The IFRS Interpretations Committee is a forum for the IASB to consult with the outside world. 2 The IFRS Foundation produces IFRSs. The IFRS Foundation is overseen by the IASB. 3 One of the objectives of the IFRS Foundation is to bring about convergence of national accounting standards and IFRSs. Land 3 only 2 only 2 and 3 only Sow (2 marks)1.12 What is the role of the IASB? A Oversee the standard setting and regulatory process Review defective accounts c D Control the accountancy profession (2 marks)1.13 Which ONE of the following is NOT an objective of the IFRS Foundation? Through the IASB, develop a single set of globally accepted International Financial Reporting Standards (IFRSs) Promote the use and rigorous application of International Financial Reporting Standards (IFRSs) B € Ensure International Financial Reporting Standards (IFRSs) focus primarily on the needs of ‘global, multi-national organisations: (2 marks) A Bring about the convergence of national accounting standards and IFRSs1.14 Which ONE of the following statements correctly describes how International Financial Reporting Standards (IFRSs) should be used? To ensure high ethical standards are maintained by financial reporting professionals internationally To facilitate the enforcement of a single set of global financial reporting standards To prevent national bodies from developing their own financial reporting standards (2 marks)