An entity shall recognise revenue from a contract when: 

all of the given answers are necessary for recognition of revenue from a contract.

the customer obtains control of the goods or service.

the entity has satisfied the performance obligation.

the entity has satisfied the performance obligation and the goods or service have
been transferred to the customer.

the goods or service have been transferred to the customer.

Question 2
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Revenues may be generated by:

having a liability forgiven.

holding and disposing of inventory in the normal course of business and/or having

a liability forgiven.

holding and disposing of inventory in the normal course of business.

receiving a donation.

all of the given answers.

Question 3
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Which of the following statements is correct?

Transactions that result in an inflow of economic benefits such as the purchase of

assets can be classified as a gain.

When it is probable that total contract costs will exceed total contract revenue,
the expected loss should not be recognised as an expense until the future
economic sacrifice eventuates.

The IASB conceptual framework now divides revenues into 'income' and 'gains'.

Where the percentage-of-completion method is based on costs, costs that relate

to the contract activity generally and are not normally related to specific
contracts, such as finance costs, should be allocated across the projects currently
in progress.

When the outcome of a construction contract can be estimated reliably, contract

revenue and contract costs associated with the construction contract shall be
recognised as revenue and expenses respectively by reference to the stage of
completion of the contract activity at the reporting date.

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A statement of profit or loss and other comprehensive income that includes
revenue, other income, employee benefits and costs and motor vehicle expenses
would have been prepared using the:

none of the given answers is correct. 

narrative method.

nature of expense method.

function of expense approach.

revenues and gains approach.

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Using the cost method to calculate the percentage of completion, the formula for
the current period revenue or gross profit to be recognised is: 

costs incurred to the end of the current period divided by most recent estimate of
total costs.

costs incurred to the end of the current period divided by most recent estimate of
total costs multiplied by (total revenue or gross profit recognised in prior periods).

estimated total revenue or gross profit from the contract divided by (costs

incurred to the end of the current period multiplied by most recent estimate of
total costs) less (total revenue or gross profit recognised in prior periods).

estimated total revenue or gross profit from the contract multiplied by (costs

incurred to the end of the current period divided by most recent estimate of total
costs) less (total revenue or gross profit recognised in prior periods).

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Which of the following statements is not true? 

At the commencement of the lease term, lessees are to recognise leases as assets
and liabilities in their statements of financial position measured at the lower of the
fair value of the leased asset and the present value of minimum lease payment,
determined at the inception of the lease.

The discount rate to be used in calculating the present value of the minimum
lease payments is the interest rate implicit to the lease, or if this is not practicable
to do so, the lessor's incremental borrowing rate.

If the lease arrangement contains a bargain purchase option, it is reasonable to

assume that the risks and rewards of ownership are transferred to the lessee.

In the situation where there is an unguaranteed residual in a lease agreement, the

leased asset will be recorded in the books of the lessee at an amount less than its
fair value at the inception of the lease.

A non-cancellable lease, which transfers the risks and rewards associated with
asset ownership, can still be terminated early with the permission of the lessor.

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Which of the following statements is true? 

An owner of an asset may sell it and then lease it back from the new owner.
Where this lease meets the conditions to be classified as a finance lease, the profit
or loss on the sale of the asset recorded by the lessee should be classified as a
finance item in the statement of profit or loss and other comprehensive income in
the year of the sale.

If there is reasonable assurance at the inception of the lease that the lessee will
obtain ownership of the assets at the end of the lease term, then the leased asset
should be depreciated over the lease term

A leased asset under a finance lease should be amortised over the asset's
expected useful life if there is a bargain purchase option in the lease agreement.

A leased asset is not subject to depreciation or amortisation in the books of the

lessee.

If a lease transfers ownership of the property to the lessee, or contains a bargain

purchase option, then this is consistent with the lease being an operating lease.

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Minimum lease payments include:

unguaranteed residuals.

any rentals paid to reimburse the lessor for executory costs.

contingent rentals.

any bargain purchase option amount.

depreciation expenses

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Which of the following statements regarding the Statement of Comprehensive
Income is not true? 

Profit is a measure of financial performance and therefore may not truly reflect
the success or otherwise of an organisation.

Comprehensive income does not include dividend payments to shareholders.

All expenses from operating activities must be classified according to either their

nature or function.

Total comprehensive income for the year is profit for the year plus other items of
comprehensive income.

By focusing only on the income statement, we do not obtain a full picture of all
the gains and losses that may have occurred for an entity during the period.

Question 10
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The choice of classification between nature and function of expenses from ordinary
activities depends on:

the classification that provides information that is reliable and more relevant.

the historical evidence about the probability of the items recurring.

the type and nature of the reporting entity. 

the size of the items that would be reported under the possible classifications.

the classification that best reflects the way expenses vary directly or indirectly
with the entity's level of activity.