1.

They are structured financial representation of the financial position of and the
transactions undertaken by an enterprise
a. financial reports 
b. annual reports
c. financial statements
d. financial plan

2. Which of the following statements is incorrect?

a. Financial statements should present fairly the financial position, performance and cash
flows of an enterprise.
b. Accounting policies are the specific principles, bases, conventions, rules and practices
adopted by an enterprise in preparing financial statements.
c. When preparing financial statements, management should assume a liquidation of an
enterprise.
d. In the absence of a specific requirements on policies, management should develop
policies to ensure that it provides relevant and reliable information.

3. Items of income and expense should be offset when, and only when
I.                    A PFRS requires or permits it
II.                   II.Gains and losses and related expenses arising from the same
or similar transactions and events are not material.
a. I only 
b. II only 
c. Either I or II
d. Neither I nor II

3. They are financial statements intended to meet the needs of users who are not in a
position to demand reports tailored to meet their information needs

a. interim financial statements

b. general-purpose financial statements
c. special-purpose financial statements
d. annual financial statements

4. XYZ Inc. decided to extend its reporting period from a year (12-month period) to a 15-
month period. Which of the following is not required under PAS in case of change in
reporting period?

a. XYZ Inc. should disclose the reason for using a longer period than a period of 12
months.
b. XYZ Inc. should change the reporting period only if other similar entities in the
geographical area in which it generally operates have done so in the current year; other
wise its financial statements would not be comparable to others.
c. XYZ Inc. should disclose that comparative amounts used in the financial statements are
not entirely comparable.
d. None of the above