Week 3: Theory of Accounts (Part III) BIOLOGICAL ASSETS QUIZ

Which statement is true in relation to bearer plant?

Select one:
a. All of these statements are true about bearer plant
b. The agricultural produce is usually presented as current asset unless it takes more than one year to mature
c. The bearer plant is a noncurrent asset
d. The bearer plant and the related agricultural produce

It is a market in which transactions for the asset or liability take place with sufficient regularity and volume to provide
pricing information on an ongoing basis

Select one:
a. Active market
b. Financial market
c. Global market
d. Principal market

Biological transformation results from asset changes through all of the following, except

Select one:
a. Production of agricultural produce
b. Procreation
c. Growth
d. Degeneration

If a government grant related to biological asset is conditional, the grant shall be recognized as

Select one:
a. Income when the grant has been approved
b. Income when the conditions of the grant are met
c. A deferred credit when the grant is approved.
d. A deferred credit when the conditions are met.

Agricultural produce harvested from bearer plant is measured at

Select one:
a. Fair value plus cost of disposal at the point of harvest
b. Net realizable value
c. Fair value less cost of disposal at the point of harvest
d. Fair value

Agricultural produce once harvested is measured at

Select one:
a. Net realizable value less normal profit margin
b. Fair value less cost of disposal at the point of harvest
c. Net realizable value
d. Fair value less cost of disposal
An entity had a plantation forest that is likely to be harvested and sold in 30 years. The income shall be accounted for
in which of the following?

Select one:
a. The plantation forest shall be measured every five years and the increase in value shall be shown in the
statement of comprehensive income.
b. The eventual sale proceeds shall be estimated and matched to the profit and loss account over the 30-year
period.
c. Income shall be measured annually and reported using a fair value approach that recognizes and measures
biological growth.
d. No income shall be reported annually until first harvest and sale in 30 years.

It is the management by an entity of the biological transformation and harvest of biological assets for sale or for
conversion into agricultural produce or into additional biological asset.

Select one:
a. Development activity
b. Biological activity
c. Agricultural activity
d. Economic entity

Which of the following would be classified as a product that is the result of processing after harvest?

Select one:
a. Wool
b. Cotton
c. Bananas
d. Cheese

All of the following can be considered bearer plant, except

Select one:
a. Tree in a forest plantation to be harvested and sold as log and lumber
b. Grape vine
c. Rubber tree
d. Coconut tree

Where the fair value of the biological asset cannot be determined reliably, the biological asset shall be measured at

Select one:
a. Cost less accumulated depreciation
b. Cost
c. Cost less accumulated depreciation and accumulated impairment loss
d. Net realizable value

Agricultural produce is

Select one:
a. Valued at each reporting period at fair value less cost of disposal
b. All of the choices are correct regarding agricultural produce
c. Valued at the time of harvest at the cost of production
d. The harvested product from biological asset
Where there is a ling aging or maturation process after harvest, the accounting for such products shall be dealt with
by

Select one:
a. PAS 40, Investment Property
b. PAS 2, Inventories
c. PAS 16, Property, plant and equipment
d. PAS 41, Agriculture

Agricultural activity includes all of the following, except

Select one:
a. Ocean fishing
b. Aquaculture
c. Perennial cropping
d. Raising livestock

Which of the following is unlikely to be used in fair value measurement?

Select one:
a. Quoted price of an identical asset in an active market
b. Quoted price of a similar asset in an active market
c. External independent valuation
d. The present value of the expected net cash flows from the asset

Regarding the choice of measurement basis used for valuing biological assets, IAS 41

Select one:
a. Sets out several ways of measuring fair value
b. Recommends the use of present value
c. Recommends the use of historical cost
d. Recommends the use of current cost

Biological assets

Select one:
a. Are found only in Biotech entities.
b. Must be measured at cost.
c. Do not generally have future economic benefits.
d. Are living animals or living plants and must be disclosed as a separate line item in the statement of financial
position.

Which of the following would be classified as agricultural produce?

Select one:
a. Butter
b. Tree
c. Bush
d. Apple

Which of the following in not dealt with IAS 41?

Select one:
 a. The processing of agricultural produce after harvesting
b. The initial measurement of agricultural produce
c. Government grant in respect of biological asset
d. The accounting for biological asset

Agricultural produce as it grows on bearer plant is measured at the end of each reporting period prior to harvest at

Select one:
a. Fair value less cost of disposal
b. Fair value less plus cost of disposal
c. Fair value
d. Fair value less cost of disposal at the point of harvest

Biological assets are measured at

Select one:
a. Net realizable value
b. Fair value less cost of disposal
c. Lower of cost and net realizable value
d. Cost

Animals related to recreational activities, for example, game parks and zoos, including the natural breeding of animals
in zoos, shall be accounted for under what standard?

Select one:
a. IAS 16 - Property, plant and equipment
b. IAS 41 - Agriculture
c. IAS -40 - Investment Property
d. Either IAS 41 or IAS 16

All of the following would be classified as biological asset, except

Select one:
a. Trees
b. Chickens
c. Dairy cattle
d. Eggs

Mature bearer plant is measured using

Select one:
a. Revaluation model
b. Either cost model or revaluation model
c. Either cost model or fair value model
d. Cost model

A gain or loss arising on the initial recognition of a biological asset and from a change in the fair value less cost of
disposal of a biological asset shall be included in

Select one:
a. A separate revaluation reserve
b. An appropriation reserve
 c. Other comprehensive income
d. Profit or loss for the period

Which of the following statements is true regarding agricultural produce?

Select one:
a. All of these statements are true regarding agricultural produce.
b. In all cases, an entity shall measure agricultural produce at fair value less cost of disposal at the point of
harvest
c. The fair value of agricultural produce stops at the time of harvest.
d. The prevailing view is that the fair value of agricultural produce at the point of harvest can always be
measured reliably.

Generally speaking, biological assets relating to agricultural activity shall be measured using

Select one:
a. Net realizable value
b. Historical cost less depreciation less impairment
c. Historical cost
d. A fair value approach

An unconditional government grant related to biological asset shall be recognized as

Select one:
a. Income when the grant application has been submitted
b. Income when the grant becomes receivable
c. A deferred credit when the grant becomes receivable
d. A deferred credit when the grant has been approved

Where there is a production cycle of more than one year for biological asset, IAS 41, encourages separate disclosure
of the

Select one:
a. Physical change only
b. Price change only
c. Total change in value
d. Physical change and price change

Which of the following should not be considered cost of disposal?

Select one:
a. Levy by regulatory agency
b. Transport cost
c. Transfer tax and duty
d. Commission to broker and dealer

Agricultural activity results in which of the following type of asset?

Select one:
a. Both biological asset and agricultural produce
b. Neither biological asset nor agricultural activity
c. Agricultural produce only
 d. Biological asset only

When agricultural produce is harvested, the harvest shall be accounted for as "inventory". For the purpose, cost at the
date of harvest is deemed to be

Select one:
a. Market value
b. The historical cost less accumulated impairment losses
c. The fair value less cost of disposal at the point of harvest.
d. The historical cost

A living plant with a dual use is classified as

Select one:
a. Investment property
b. Biological asset
c. Inventory
d. Bearer plant

Land that is related to agricultural activity is measured

Select one:
a. In accordance with IAS 16, Property, Plant and Equipment, or IAS 40, Investment Property
b. At fair value
c. At the resale value separate from the biological asset
d. At fair value in combination with biological asset

All of the following are classified as agricultural produce, except

Select one:
a. Sugar
b. Cotton
c. Milk
d. Wool

According to IASB, bearer plants which are used solely to grow produce over several periods should be accounted for
as

Select one:
a. Noncurrent investments
b. Biological assets without disclosure
c. Biological assets with disclosure
d. Property, plant and equipment

Which of the following information shall be disclosed in relation to agricultural activity?

Select one:
a. There is no requirement to disclose separately any gain or loss.
b. Separate disclosure of the gain or loss relating to biological asset and agricultural produce
c. The aggregate gain or loss arising on the initial recognition of biological asset and agricultural produce and
from the change in fair value less cost of disposal of biological asset
 d. The total gain or loss from biological asset, agricultural produce, and from changes in fair value less cost of
disposal of the biological asset.

A bearer plant is a living plant that

Select one:
a. Is used to bear produce for more than one period
b. Has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales
c. Is used in the production or supply of agricultural produce
d. Must possess all of these characteristics

All of the following criteria must be satisfied before a biological asset can be recognized, except

Select one:
a. The entity controls the asset as a result of past events.
b. It is probable that future economic benefits relating to the asset will flow to the entity.
c. An active market for the asset exists.
d. The fair value or cost of the asset can be measured reliably.

According to IASB, bearer animals are accounted for as

Select one:
a. Agricultural produce
b. Biological asset
c. Property, plant and equipment
d. Investment property