1. Under IFRS, property, plant and equipment are measured using the a. Revaluation model only b.

Cost model or revaluation model c. Cost model or fair value model d. Revaluation model or fair
value model 2. Which is not an essential characteristic of PPE? a. The PPE are subject to
depreciation b. The PPE are tangible assets c. The PPE are used in production or supply of goods and
services, for rental and administrative purposes d. The PPE are expected to be used over a period of
more than one year 3. The depreciable amount of an item of PPE is the a. Cost of the asset less its
residual value b. Net amount which the enterprise expects to obtain for an asset at the end of its
useful life after deducting the expected costs of disposal c. An amount of cash or cash equivalent
paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or
construction d. Amount at which an asset is recognized in the balance sheet after deducting any
accumulated depreciation and accumulated impairment losses thereon 4. Carrying amount is a. Cost
of an asset or the amount substituted for cost in the Financial Statements, less its residual value b. An
amount of cash or cash equivalent paid or the fair value of other consideration given to acquire an
asset at the time of its acquisition or construction c. Net amount which the enterprise expects to
obtain for an asset at the end of its useful life after deducting the expected costs of disposal d.
Amount at which an asset is recognized in the balance sheet after deducting any accumulated
depreciation and accumulated impairment losses 5. The cost of PPE comprises all of the following
except: a. Its purchase price, including import duties and non-refundable taxes, after deducting trade
discounts and rebates b. Cost of opening a new facility or introducing a new product or service c.
Any cost directly attributable to bringing the asset to the condition or location necessary for it to be
capable of operating in the manner intended by management d. The initial estimate of the costs of
dismantling and removing the item and restoring the site on which it is located and for which the
entity has present obligation 6. Direct attributable costs include the following except a. Cost of site
preparation, initial delivery, handling and installation b. Professional fees such as for architects and
engineers c. Estimated cost of dismantling and removing the asset and restoring the site, to the extent
that is recognized as a provision d. Initial operating losses incurred prior to an asset achieving
planned performance 7. As to land, capitalizable incidental costs do not include a. Legal fees for
establishing clean title b. Commission paid to broker c. Cost of permanent improvement such as
grading, leveling and other landscape d. Expenditure for fence, water system, side walk and paving 8.
Land improvements a. Are subject to depreciation b. Should be included in the cost of land c. Should
be deducted from the cost of land d. Should be charged as expense in the year purchased 9. A lessee
incurred costs to construct office space in a leased warehouse. The estimated useful life of the office
is ten years. The remaining term of the renewable less is fifteen years. The cost should be a. Expense
as incurred b. Capitalized as leasehold improvement and depreciated over ten years c. Capitalized as
leasehold improvements and depreciated over fifteen years d. Capitalized as leasehold improvements
and expensed in the year in which the lease expires 10. Plant assets purchased on a long term credit
contract should be accounted for at a. The total value of future payment b. The future amount of the
future payments c. The present value of the future payments d. None of these 11. . When a company
purchases land with a building on it and immediately tears down the building so that the land can be
used for the construction of a plant, the costs incurred to tear down the building should be a.
Amortized over the estimated time period between the tearing down of the building and the
completion of the plant. b. Expensed as incurred. c. Added to the cost of the plant. d. Added to the
cost of the land. 12. The principal issues in the accounting for property, plant and equipment include
which of the following? I. The recognition of the assets. II. The determination of carrying amounts
and the depreciation charges and impairment losses to be recognized in relation to assets recognized.
III. The complex computation of revaluation surplus. a. I, II b. I, III c. III d. I, II, III