1.

The purpose of the Conceptual Framework is:

A. To assist the International Accounting Standards Board to develop IFRS Standards

B. To assist preparers of IFRS financial statements to develop consistent accounting

policies when no IFRS Standard applies to a particular transaction or other event, or

when a Standard allows a choice of accounting policy

C. To assist all parties to understand and interpret IFRS Standards

D. All of the above

QS 2. When developing requirements for IFRS Standards, can the International Accounting Standards
Board depart from the Conceptual Framework?

A. No

B. Yes, the Board is not required to use the Conceptual Framework when developing Standards

C. Yes, but only from aspects of the Conceptual Framework and only if doing so is needed to meet the
objective of financial reporting

QS 3. The objective of general purpose financial reporting as described in the Conceptual Framework
is to:

A. Provide information to regulators

B. Support the entity's tax return

C. Meet the information needs of an entity's stakeholders D. Provide financial information about the
reporting entity that is useful to existing and potential investors, lenders and other creditors in making
decisions relating to providing resources to the entity

QS 4. Which of the following does the Conceptual Framework identify as the primary users of general
purpose financial reports?

A. Employees, investors and trade union representatives

B. Existing and potential investors, lenders and other creditors

C. Lenders and other creditors and customers

D. Existing and potential investors, government agencies and the general public

QS 5. The fundamental qualitative characteristics of useful financial information are:

A. Comparability and relevance

B. Relevance and reliability

C. Relevance, reliability and comparability

D. Relevance and faithful representation

E. Comparability, relevance and faithful representation

QS 6. For information to be relevant, it has to possess:

A. Only predictive value

B. Only confirmative value

C. Both predictive and confirmatory value

D. Either predictive or confirmatory value, or both

QS 7. The Conceptual Framework describes prudence as:

A. The exercise of caution when making judgements under conditions of uncertainty

B. A bias towards understating assets or income and towards overstating liabilities or expenses

C. A preference towards the earlier recognition of expenses and liabilities than of income and assets

D. A mechanism for smoothing profits over time (understate profits in good years and overstate profits
in bad years) E. A form of accounting conservatism

QS 8. Which statement is included in the Conceptual Framework?

A. Relevance is a fundamental qualitative characteristic of useful financial information

B. Financial information without both relevance and faithful representation is not useful

C. Enhancing qualitative characteristics cannot make information useful if that information is irrelevant
or does not provide a faithful representation of what it purports to represent

D. All of the above

E. None of the above

QS 9. The Conceptual Framework defines an asset as:

A. A resource controlled by the entity as a result of past events and from which future economic
benefits are expected to flow to the entity
B. A present economic resource controlled by the entity as a result of past events

C. A right to receive income or reduce expenses in the future

D. None of the above

QS 10. The Conceptual Framework defines a liability as:

A. A present obligation of the entity to transfer an economic resource as a result of past events

B. A present obligation of the entity arising from past events, the settlement of which is expected to
result in an outflow from the entity of resources embodyiong economic benefits

C. An amount the entity may have to pay after the end of the reporting period

D. None of the above

QUIZ TRONG BÀI

- When there is a conflict between the Conceptual framework and an IFRS, the person preparing
the financial statements has the discretion to decide whether the Conceptual Framework or the
lFRS prevails.

• True

• False

- Which of the followings are the fundamental qualitative characteristics of financial statements?

a. Relevance

b. Understandability

c Comparability

d.Faithful representation

e.Timeliness

f. Verifiability

- Quiz: Which of the following measurement bases is not specificany defined in the Conceptual
Framework? a. Historical cost b. Current cost c. Fair value d. Realizable (settlement) value e.
Present value
2. The Conceptual Framework can override requirements in a Standard.

- FALSE
3. Revision of the Conceptual Framework will automatically lead to changes in Standards that
are inconsistent with the revised concepts.

- FALSE
4. If an IFRS Standard sets out requirements that are inconsistent with the Conceptual
Framework, preparers have to apply the Conceptual Framework for affected transactions.
- FALSE
5. Entities have to apply the revised Conceptual Framework:

A. Immediately after it is issued

B. For annual reporting periods beginning on or after 1 January 2020, with early application
permitted
C. Never - the Conceptual Framework is only used by the International Accounting Standards
Board

6. Which of the following does the Conceptual Framework identify as the primary users of
general purpose financial reports?
a. Employees, investors and trade union representatives
B. Existing and potential investors, lenders and other creditors
c. Lenders and other creditors and customers
d. Existing and potential investors, government agencies and the general public

7. Information needed to assess management's stewardship is always different from

information needed to assess the prospects for future net cash inflows to the entity.
- FALSE
8. Financial reports need to provide information useful in making decisions relating to
providing resources to the entity.  Those decisions include decisions about exercising rights to
vote on, or otherwise influence, management's actions that affect the use of the entity's
economic resources.
- TRUE

9. How does the Conceptual Framework explain the role of stewardship? 

A. Providing information needed to assess management's stewardship is identified as an

additional objective of financial reporting, equal in prominence to providing financial
information useful to users in making decisions relating to providing resources to the entity
B. Decisions relating to providing resources to the entity depend on users' assessment of the
amount, timing and uncertainty of the prospects for future net cash inflows to the entity and on
their assessment of management's stewardship
C. Providing information needed to assess stewardship is more important than providing
information needed to assess the prospects for future cash inflows to the entity
D. Financial reports are not intended to provide information needed to assess stewardship

10. The fundamental qualitative characteristics of useful financial information are:

Comparability and relevance
Relevance and reliability
Relevance, reliability and comparability
Relevance and faithful representation
Comparability, relevance and faithful representation

11. For information to be relevant, it has to possess:

Only predictive value
Only confirmative value
Both predictive and confirmatory value
Either predictive or confirmatory value, or both
12. The Conceptual Framework describes prudence as:
The exercise of caution when making judgements under conditions of uncertainty
A bias towards understating assets or income and towards overstating liabilities or expenses
A preference towards the earlier recognition of expenses and liabilities than of income and
assets
A mechanism for smoothing profits over time (understate profits in good years and overstate
profits in bad years)
A form of accounting conservatism

13.
Which statement is included in the Conceptual Framework?
Relevance is a fundamental qualitative characteristic of useful financial information
Financial information without both relevance and faithful representation is not useful
Enhancing qualitative characteristics cannot make information useful if that information is
irrelevant or does not provide a faithful representation of what it purports to represent
All of the above

14. A trade-off between the fundamental qualitative characteristics of relevance and faithful
representation may need to be made in order to meet the objective of financial reporting.
- TRUE

15. Only a legal entity can be a reporting entity.

- FALSE

16. Consolidated financial statements provide information about the assets, liabilities, equity,
income and expenses of both the parent and its subsidiaries as:
Separate reporting entities
A partnership
A single reporting entity
A legal entity

17. When a reporting entity is not a legal entity and does not comprise only legal entities all
linked by a parent-subsidiary relationship, the boundary of the reporting entity can contain
an incomplete set of economic activities if that entity provides a description of how the
boundary was determined.
- FALSE

18. What drives the determination of the boundary of a reporting entity that is not a legal
entity and does not comprise only legal entities all linked by a parent-subsidiary relationship?
Management's choice
Legal form of the reporting entity
Information needs of the primary users of the reporting entity
All of the above

19. A reporting entity can be:

A portion of an entity
A single entity
More than one entity
All of the above

20. The Conceptual Framework defines an asset as:

A resource controlled by the entity as a result of past events and from which future economic
benefits are expected to flow to the entity
A present economic resource controlled by the entity as a result of past events
A right to receive income or reduce expenses in the future
None of the above
21.  IF an entity has a legal ownership of a physical object, its asset is:

The set of rights arising from legal ownership of the physical object
The physical object
The economic benefits that may flow from the physical object
All of the above

22. For a right to meet the definition of an asset, it needs to be likely that the right will
produce economic benefits for the entity.
- FALSE

23. The Conceptual Framework defines a liability as:

A present obligation of the entity to transfer an economic resource as a result of past events
A present obligation of the entity arising from past events, the settlement of which is expected
to result in an outflow from the entity of resources embodyiong economic benefits
An amount the entity may have to pay after the end of the reporting period
None of the above

24. In explaining the meaning of the term 'obligation' in the definition of a liability,
the Conceptual Framework states:

That an obligation is a duty or responsibility that an entity has no practical ability to avoid
That an obligation can arise from a duty or responsibility conditional on a future action that the
entity itself may take, if the entity has no practical ability to avoid taking that action
That an obligation can arise from an entity’s customary practices, published policies or specific
statements, if the entity has no practical ability to avoid those practices, policies or statements
All of the above
25. The residual interest in the assets of an entity after deducting all its liabilities is:
Income
Profit or loss
Equity
Other comprehensive income

26. Recognition is the process of:

Capturing, for inclusion in the statement of financial position or the statement(s) of financial
performance, an item that meets the definition of one of the elements of the financial
statements—an asset, a liability, equity, income or expenses
Determining where an item should be presented in the financial statements
Sorting assets, liabilities, equity, income or expenses on the basis of shared characteristics
Adding together of assets, liabilities, equity, income or expenses that have shared
characteristics

27. Some items that do NOT meet the definition of an asset, a liability or equity may be
recognised in the statement of financial position.

- FALSE

28. Which factors may indicate that recognition of an item meeting the definition of an asset
or a liability may not provide relevant information?
Uncertainty about whether an asset or liability exists
Low probability of an inflow or outflow of economic benefits
Other factors
All of the above
29. A high level of measurement uncertainty associated with an asset always results in the
asset not being recognised.
- FALSE

30. What does the Conceptual Framework state about derecognition?

For an asset, derecognition normally occurs when the entity loses control of all or part of the
recognised asset
For a liability, derecognition normally occurs when the entity no longer has a present obligation
for all or part of the recognised liability
Derecognition is the removal of all or part of a recognised asset or liability from an entity's
statement of financial position
All of the above

31. Which measurement bases are categorised as current value measurement bases in
the Conceptual Framework?

Value in use
Fair value
Fulfilment value
Current cost
All of the above

32. Which of the following factors is (or are) considered in selecting a measurement basis?
Variability of cash flows of the asset or liability
How the asset or liability contributes to future cash flows, which depends in part on the nature
of an entity's business activities
The level of measurement uncertainty associated with a particular measurement basis
All of the above
33. In selecting a measurement basis for an asset or liability, it is more important to consider
the nature of the information that the measurement basis will produce in the statement(s) of
financial performance than in the statement of financial position.
FALSE

34. The Conceptual Framework identifies a preferred measurement basis for all assets and
liabilities.
FALSE

35. In principle, all income and expenses are included in the statement of profit or loss.
TRUE

36. An entity may decide to include income or expenses in other comprehensive income
when doing so would result in the statement of profit or loss providing more relevant
information, or providing a more faithful representation of the entity's performance for the
period
FALSE

37. An analysis of income and expenses recognised in the statement of profit or loss is
sufficient to understand an entity's financial performance for the period.
FALSE

38. Income and expenses included in other comprehensive income:

Are never reclassified (recycled) from other comprehensive income into the statement of profit
or loss
Are recycled into the statement of profit or loss if the International Accounting Standards Board
decides that doing so results in the statement of profit or loss providing more relevant
information, or providing a more faithful representation of the entity’s financial performance
for that period
Are always recycled into the statement of profit or loss at the end of the holding period of the
related asset or liability
40. What does the Conceptual Framework say about profit or loss?
The statement of profit or loss is the only source of information about an entity’s financial
performance for the period
In principle, all income and expenses are included in the statement of profit or loss
All income and expenses included in profit or loss arise from ordinary activities of the entity
All of the above
None of the above