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QUESTION BANKS

Question 1: According to IAS 36, carrying amount is the amount at which an asset is
recognised __________.
A. After deducting any accumulated depreciation (amortisation)
B. After deducting accumulated impairment losses, if any
C. Before deducting accumulated impairment losses, if any
D. A and B
E. A and C
Question 2: Under IFRS 3, the acquirer’s application of the recognition principle and
conditions may result in recognising some assets and liabilities that the acquiree had
not previously recognised as assets and liabilities in its financial statements.
A. True
B. False
Question 3: Closing inventory is a credit in the statement of profit or loss.
A. True
B. False
Question 4: At 30 September 20X9, Chicky’s trial balance showed a brand at cost of
$30 million, less accumulated amortisation brought forward at 1 October 20X8 of $9
million. Amortisation is based on a ten-year useful life. An impairment review on 1
April 20X9 concluded that the brand had a value in use of $12 million and a
remaining useful life of three years. However, on the same date Chicky received an
offer to purchase the brand for $15 million. What should be the carrying amount of
the brand included in Chicky’s statement of financial position as at 30 September
20X9?
A. $10m
B. $18m
C. $12.5m
D. $15m
Question 5: Which one of the following terms best describes the removal of an asset
from an entity’s statement of financial position?
A. Write-off
B. Depreciation
C. Impairment
D. Derecognition
Question 6: According to IAS 2 Inventories, which one of the following lists consists
only of items which may be included in the cost of inventories?
A.Supervisor's wages, carriage inwards, carriage outwards, raw materials
B.Raw materials, carriage inwards, costs of storage of finished goods, plant
depreciation
C.Plant depreciation, carriage inwards, raw materials, Supervisor's wages
D.Carriage outwards, raw materials, Supervisor's wages, plant depreciation
Question 7: According to IFRS 16 Leases, any initial direct costs incurred by a lessee
are added to the amount of the asset recognised in the statement of financial
position.
A. True
B. False
Question 8: Repairs and maintenance costs are normally:
A. Recorded as deferred expenses
B. Expensed in the profit or loss as incurred
C. Capitalised
Question 9: IFRS 15 allows the recognition of revenue through the duration of a
contract for services if it has been demonstrated that the performance obligation is
met over time.
A. Revenue to date divided by total contract revenue
B. Advances received to date as a percentage of the total amount receivable
C. Surveys of work performed
D. Machine hours worked to date
Question 10: Which of the following statements does more likely define the term
“restructuring”?
A. Significant change in the scope of a business undertaken by an entity
B. Significant change in the manner in which that business is conducted
C. Significant change in political and legal environment that regulates reporting
matters of an entity
D. A or B
E. All of the above
Question 11: In a period of rising prices, applying the FIFO method in measuring
cost of inventories would result in a lower gross profit figure than the AVCO method.
A. True
B. False
Question 12: In a period of rising purchase costs, FIFO usually gives a lower taxable
income than AVCO and therefore, yields a tax advantage
A. True
B. False
Question 13: According to IAS 2 Inventories, which one of the following lists consists
only of items which may be included in the cost of inventories?
A. Supervisor's wages, carriage inwards, carriage outwards, raw materials
B. Raw materials, carriage inwards, costs of storage of finished goods, plant
depreciation
C. Plant depreciation, carriage inwards, raw materials, Supervisor's wages
D. Carriage outwards, raw materials, Supervisor's wages, plant depreciation
Question 14: Can research costs be capitalized ?
A. Never
B. Yes, when the development stage is complete
C. Yes, when the development stage has begun
D. Always
Question 15: An investment property is initially measured at cost, including
transaction costs
A. True
B. False
Question 16: If right-of-use assets relate to a class of property, plant and equipment
to which the lessee applies the revaluation model in IAS 16, a lessee may elect to
apply that revaluation model to all of the right-of-use assets that relate to that class
of property, plant and equipment.
A. True
B. False
Question 17: A contingent asset should be disclosed by note if an inflow of economic
benefits is probable.
A.True
B.False
Question 18: Ooran Ltd has 400 products in inventory as at 30 November 20X1. The
product costs £15 per unit to manufacture and can be sold for £30 per unit.
However, 200 products in inventory at 30 November 20X1 have been damaged and
will require rectification work costing £15 per unit before they can be sold. Selling
costs are £1 per unit. What is the value of inventory of Ooran Ltd at 30 November
20X1?
A.£6,000
B.£5,900
C.£5,800 (200*15+200*30-200*15-200)
D.£5,700
Question 19: According to IAS 16 Property, plant and equipment, the cost includes
cash equivalents paid to acquire an asset.
A.True
B.False
Question 20: On 1 July 20X9 The Otakamiro Company handed over to a client a new
computer system of a type it has not sold before. The contract price for the supply
of the system and after-sales support for 12 months was CU800,000. Otakamiro
estimates the cost of the after-sales support at CU120,000 and it normally marks up
such costs by 50% when tendering for support contracts. Under IFRS 15 Revenue
from contracts with customers, the revenue Otakamiro should recognise in its
financial year ended 31 December 20X9 is:
A.800,000
B.710,000
C.0
D.620,000
Question 21: According to IAS 12 Income taxes, “The tax base for a machine for tax
purposes is greater than the carrying amount in the financial statements up to the
end of the reporting period. This will give rise to a deferred tax asset.”
A.True ?
B.False
Question 22: The lease payments shall be discounted using __________, if that rate
can be readily determined.
A.The lessee’s incremental borrowing rate
B.Benchmark interest rate
C.Interest rate implicit in the lease
D.Weighted average cost of capital rate
E.Internal rate of return
Question 23: Which TWO of the following must be disclosed separately, according to
IAS 12 Income taxes?
A.The amount of income tax relating to each component of other comprehensive
income
B.The amount of deductible temporary differences for which no deferred tax asset is
recognised
C.The tax bases of major items on which deferred tax has been calculated
D.Estimates of future tax rates
Question 24: Which of the following disclosures is not required by IAS 38?
A.Fair value of similar intangible assets used by its competitors.
B.Reconciliation of carrying amount at the beginning and the year-end.
C.Contractual commitments for the acquisition of intangible assets.
D.Useful lives of the intangible assets.
Question 25: Which of the following shall a lessee recognise in profit or loss after the
commencement date?
A.Interest on the lease liability
B.Variable lease payments not included in the measurement of the lease liability in
the period in which the event or condition that triggers those payments occurs
C.Net investment in the lease
D.A and B
E.B and C
Question 26: The National Company acquired 80% of The Local Company for a
consideration transferred of CU100million. Local's net assets were CU85million at the
acquisition date. Goodwill should be measured at CU32million if the non-controlling
interests are measured at its share of Local's net assets.
A.True
B.False
Question 27: On 1 April 20X1, Cake plc acquired a property for £500,000. This
property is depreciated on the straight-line basis over 25 years to its residual value
of £50,000. On 31 March 20X6, Cake plc performed an impairment review and
determined that the property had a fair value less disposal costs of £380,000 and a
value in use of £370,000. What is the impairment loss in respect of the property as
at 31 March 20X6?
A.£20,000
B.£30,000
C.£40,000
D.£12,000
Question 28: The existence of which of the following in the entity’s internal reporting
does indicate that an asset may be impaired?
A.Cash flows for acquiring the asset, or subsequent cash needs for operating or
maintaining it, that are significantly lower than those originally budgeted
B.Actual net cash flows or operating profit or loss flowing from the asset that are
significantly worse than those budgeted
C.A significant decline in budgeted net cash flows or operating profit, or a significant
increase in budgeted loss, flowing from the asset
D.A and B
E.B and C
Question 29: According to IAS 12 Income taxes, where accumulated depreciation on
an asset is greater than accumulated tax depreciation, the amount should be
classified under deductible temporary differences.
A.True
B.False
Question 30: Delphi plc had £25,000 inventories at 1 April 20X5. During 20X5, it
purchased £245,600, carriage inwards was £12,450 and carriage outwards incurred
was £23,540. Closing inventory at 31 March 20X6 was valued at £38,000. Which
amount should appear as the cost of sales in the statement of profit or loss for the
year ended at 31 March 20X6?
A.£245,050
B.£221,510
C.£268,590
D.£234,150
Question 31: Which of the following shall a lessee recognise at the commencement
date?
A.A right-of use asset
B.A lease liability
C.Deferred income
D.A and B
E.B and C
Question 32: Which one of the following is the best description of “faithful
representation” in relation to information in financial statements?
A.Inclusion of a degree of caution
B.Complete, neutral and free from error
C.Influence on the economic decisions of users
D.Comprehensibility to users
Question 33: Inventory items should be valued at the lower of cost and net
realisable value.
A.True
B.False
Question 34: The financial statements of the Farren Company for the year ended 31
December 20X8 included a provision for restructuring of £7 million. At 31 December
20X9, £2 million of the restructuring provision was no longer required. An additional
provision of £2 million was needed for legal claims against the company. Under IAS
37, £2 million of the restructuring provision no longer required is to be re-allocated
to cover the legal claims.
A.True
B.False
Question 35: Oysle Ltd is preparing its trial balance for the year ended 30 September
20X8. Total purchases in the period were £490,850. Opening inventories were valued
at £29,980 and closing inventories were valued at £28,730. Which amount should
appear as the cost of sales in the trial balance?
A.£491,200
B.£492,200
C.£491,100
D.£492,100
Question 36: Which ONE of the following statements best describes the term
'liability'?
A.An excess of equity over current assets
B.Resources to meet financial commitments as they fall due
C.The residual interest in the assets of the entity after deducting all its liabilities
D.A present obligation of the entity arising from past events
Question 37: Under IAS 36, for impairment testing, a cash-generating unit is
A.The lowest aggregation of assets that can generate independent cash inflows
B.Any unit that generates cash
C.Corporate assets
D.The highest aggregation of assets that can generate independent cash inflows
Question 38: If an investment property is held at fair value, this must be applied to
all of the entity's investment properties
A.True
B.False
Question 39: Flappy Co entered into a 4-year lease agreement on 1 January 20X5.
The agreement meets the definition of a lease in accordance with IFRS 16. An initial
payment of $160,000 was made on 1 January 20X5 followed by three annual
payments on 1 January of $150,000 each. The rate implicit in the lease is 10%.
Flappy Co incurred initial direct costs of $20,000 to set up the lease. What amount
will be charged to the statement of profit or loss in respect of this asset for the year
ended at 31 December 20X6?
A.$138,257
B.$159,290
C.$164,290
D.$175,560
Question 40: A gain or loss arising from a change in the fair value of an investment
property should be recognised in the revaluation surplus
A.True
B.False
Question 41: When allocating an impairment loss, such a loss should reduce the
carrying amount of which asset first?
AGoodwill
B.Property, plant and equipment
C.Intangible assets
D.Leases
Question 42: Candy Plc is being sued by a customer for $2 million for breach of
contract over a cancelled order. Candy Plc has obtained legal opinion that there is a
20% chance that Candy Plc will lose the case. The unrecoverable legal costs of
defending the action are estimated at $100,000. The case will not go to court until
next year. What is the amount of the provision that should be made by Candy Plc in
accordance with IAS 37 Provisions, contingent liabilities and contingent assets?
A.100,000
B.500,000
C.400,000
D.2,000,000
Question 43: The Conceptual Framework is intended to establish
A.GAAP
B.The meaning of "present fairly in accordance with GAAP"
C.The objectives and concepts for use in developing standards of financial
accounting and reporting
D.The hierarchy of sources of GAAP
Question 44: Under IAS 36, reversal of impairment loss is allowed if
A.The recoverable amount of the asset becomes higher than its carrying amount
because of the 'unwinding' of the discount.
B.The loss is related to acquired goodwill
C.Either A or B
D.Neither A nor B
Question 45: According to IAS 38 Intangible assets, expenditure during the research
phase of a project may sometimes be capitalised as an intangible asset.
A.True
B.False
Question 46: Which of the following is not an example of directly attributable costs
according to IAS 16?
A.Costs of employee benefits arising directly from the construction or acquisition of
the item of property, plant and equipment
B.Costs of site preparation
C.Costs of conducting business in a new location or with a new class of customer
D.Initial delivery and handling costs
E.Professional fees
Question 47: According to IAS 12 Income taxes, deferred tax liabilities are the
amounts of income taxes payable in future periods in respect of taxable temporary
differences.
A.True
B.False
Question 48: Panda plc has an administration building which it no longer needs. On
1 July 20X9 Panda plc entered into an agreement to lease the building out to
another company. The building cost $500,000 on 1 January 20X0 and is being
depreciated over 50 years, based on the IAS 16 cost model. Panda plc applies the
fair value model under IAS 40 Investment property and the fair value of the building
was judged to be $450,000 on 1 July 20X9. This valuation had not changed at 31
December 20X9. What is the amount of the revaluation surplus that will be
recognised in respect of the building?
A.35,000
B.45,000
C.55,000
D.65,000
Question 49: The Caspian Company leased a warehouse with adjoining land for a
period of 15 years. The land has an indefinite useful life whereas the warehouse has
a useful life of 15 years. Title to the land is not expected to pass at the end of the
lease. Under IFRS 16 Leases, in respect of which items should a right-of-use asset
and a lease liability be recognised in the financial statements of Caspian?
A.Only the warehouse
B.Both the land and the warehouse
C.Neither asset
D.Only the land
Question 50: A company sells goods with a warranty for the cost of repairs required
in the first 2 months after purchase. Past experience suggests: 88% of the goods
sold will have no defects, 7% will have minor defects, 5% will have major defects. If
minor defects were detected in all products sold, the cost of repairs will be £24,000;
if major defects were detected in all products sold, the cost would be £200,000.
What amount of provision should be made?
A.11,000
B.11,680
C.12,000
D.12,680
Question 51: The closing inventory of Jaycoon Ltd amounted to £203,000 at cost at
year end of 30 September 20X4. This total figure includes the following items: (1)
600 items which had cost £25 each. These items were found defective and remedial
work in October 20X4 cost £5 per item. They were sold in October 20X4 for £35 with
total selling expenses of £600. (2) 1,000 items which had cost £20 each and
normally sold for £30. These items were found damaged and will require rectification
work costing £10 per unit before they can be sold. Selling expenses are £1 per item.
What amount should be shown in the Jaycoon Ltd’s statement of financial position
for inventory at 30 September 20X4?
A.£199,000
B.£203,000
C.£202,000
D.£200,000
Question 52: If one or more assets are exchanged for a new asset, the new asset is
valued at:
A. Replacement cost
B. Fair value
C. Residual value
Question 53: Which of the following statements is true with regards to an
investment property?
A. An investment property generates cash flows largely independently of the other
assets held by an entity
B. The value in use of investment property is significantly higher than of owner-
occupied property
 C. An investment property unlike owner-occupied property shall not be depreciated
over its useful life
D. An investment property unlike owner-occupied property shall always be
measured at its historical cost
Question 54: An impairment loss relates to an asset that has been revalued should
be recognized in
A.Profit or Loss
B.Revaluation reserve that relates to the revalued asset
C.Opening retained profits
D.Any reserve in equity
Question 55: Under IAS 16, if the entity applies revaluation model, PPE are
revaluated:
A.Every 3-5 years
B.When fair values change, or are expected to change
C.Annually
D.As request of the competent authorities
Question 56: Under IAS 16, if a company builds an office building for its own use, it
may account for the building at historical cost less accumulated depreciation and
impairment losses, with depreciation and impairment losses recognised in profit or
loss.
A.True
B.False
Question 57: According to IFRS 15 Revenue from contracts, which TWO of the
following are indicators that a performance obligation is satisfied over time rather
than at a point in time?
A.The customer simultaneously receives and consumes the benefits as the entity
performs
B.The entity's performance creates or enhances an asset that the customer controls
as it is created or enhanced
C.The entity takes a substantial period of time to meet the performance obligation
D.The entity is entitled to stage payments as the work progresses
Question 58: According to IAS 38 Intangible assets, intangible assets cannot be
treated as having an indefinite useful life.
A.True
B.False
Question 59: At the commencement date, a lessee shall measure the lease liability at
the future value of the lease payments that are paid at that date.
A.True
B.False
Question 60: Uggy Co entered into a 4-year lease agreement on 1 January 20X5.
The agreement meets the definition of a lease in accordance with IFRS 16. An initial
payment of $150,000 was made on 1 January 20X5 followed by three annual
payments on 1 January of $110,000 each. The rate implicit in the lease is 10%.
Uggy Co incurred initial direct costs of $20,000 to set up the lease. What is the
carrying amount of the lease liability at 31 December 20X6?
A.$230,000
B.$300,909
C.$210,000
D.$110,000
Question 61: According to IAS 36, costs of disposal are:
A.Incremental costs, directly attributable to the disposal of an asset (or cash-
generating unit), plus finance costs and income tax expense
B.Incremental costs, directly attributable to the disposal of an asset, excluding
finance costs and income tax expense
C.Incremental costs, directly attributable to the disposal of an asset (or cash-
generating unit), plus finance costs, but excluding income tax expense
D.Incremental costs, directly attributable to the disposal of an asset (or cash-
generating unit), plus tax expense, but excluding finance costs
Question 62: A business received a delivery of goods on 29 June 20X6, which was
included in inventory at 30 June 20X6. The invoice for the goods was recorded in
July 20X6. What effect will this have on the business?
A.Profit for the year ended 30 June 20X6 will be overstated
B.Inventory at 30 June 20X6 will be understated
C.Profit for the year ended 30 June 20X7 will be overstated
D.Inventory at 30 June 20X7 will be understated
Question 63: According to IAS 37 Provisions, contingent liabilities and contingent
assets, an obligation as a result of the entity creating a valid expectation that it will
discharge its responsibilities is a contingent liability.
A.True
B.False
Question 64: According to the IASB Conceptual Framework, which TWO of the
following characteristics are described as fundamental qualitative characteristics that
make the information provided in financial statements useful to users?
A.Comparability
B.Understandability
C.Relevance
D.Faithful representation
Question 65: Figy Co entered into a 4-year lease agreement on 1 January 20X5. The
agreement meets the definition of a lease in accordance with IFRS 16. An initial
payment of $100,000 was made on 1 January 20X5 followed by three annual
payments on 1 January of $100,000 each. The rate implicit in the lease is 10%. Figy
Co incurred initial direct costs of $20,000 to set up the lease. What is the cost of the
right-of-use asset as at 1 January 20X5?
A.348,685
B.400,000
C.368,685
D.420,000
Question 66: Select the correct statement with regards to intragroup balances and
transactions during consolidation:
A. Intragroup balances and transactions must be eliminated
B. Intragroup balances and transactions must be eliminated to the extent of non-
controlling interest
C. Intragroup balances and transactions must be eliminated in proportion to the
percentage of effective ownership
D. Intragroup balances and transactions do not have to be eliminated
Question 67: According to IAS 2 Inventories, which TWO of the following should be
accounted for in the cost of an inventory item?
A. Trade discounts received on purchase of inventories
B. Storage costs of finished goods
C. Import duties on shipping of inventories inwards
D. Material wasted due to a machine breakdown
Question 68: Clinkque Co has developed an accounting software package. Clinkque
offers a supply and installation service for $2,000 and a separate two - year technical
support service for $800. Alternatively, it also offers a combined goods and services
contract which includes both of these elements for $2,500. Payment for the
combined contract is due one month after the date of installation. For each
combined contract sold, what is the amount of revenue which Clinkque Co Co should
recognise in respect of the supply and installation service in accordance with IFRS
15?
A. 1,600
B. 2,000
C. 1,786
D. 1,700
Question 69: Under IFRS 3, at the acquisition date, the acquirer shall __________
the identifiable assets acquired and liabilities assumed as necessary to apply other
IFRSs subsequently.
A.Revaluate or classify
B.Classify or designate
C.Dispose or transfer
D.Transfer or designate
Question 70: In a period of rising prices, applying the FIFO method in determining
cost of inventories would result in a lower cost of sales and higher closing inventory
than the AVCO method.
A. True
B. False
Question 71: Following initial recognition, investment property can be held at either
cost or fair value
A.True
B.False
Question 72: Custom duties are included in the cost of inventories.
A. True
B. False
Question 73: An entity should treat any difference between the measurement of an
IAS 16 property and the measurement of an IAS 40 Investment Property at the date
of transfer as an expense to the profit or loss
A. True
B. False
Question 74: The cost of a property interest held under a lease should be valued at:
A.Fair value ?
B.The higher of fair value and PV of minimum lease payments
C.The lower of fair value and PV of minimum lease payments
D.The present value of the minimum lease payments
Question 75: According to IAS 36, if the fair value less costs to sell cannot be
determined
A.The carrying value of the asset remains the same.
B.The asset is not impaired.
C.The net realizable value is used.
D.The recoverable amount is the value-in-use.
Question 76: A contract is, or contains, a lease if the contract conveys the right
__________ an identified asset for a period of time in exchange for consideration.
A. To use
B. To control the use of
C. To obtain economic benefits from
D. To recognise depreciation changes of
Question 77: According to IFRS 15, which one of the following criteria must be
satisfied before revenue from the sale of goods should be recognised in profit or
loss?
A.The customer has no rights to return
B.The outcome of the transaction is certain
C.A performance obligation has been met
D.The transaction price has been settled in full by the customer
Question 78: At the commencement date, a lessee shall measure the right-of-use
asset at __________.
A.Cost
B.Fair value
C.Present value
D.Value in use
Question 79: What is a benefit of having a Conceptual Framework?
A.To enable the accountancy profession to more quickly solve emerging practical
problems.
B.To provide information from which to build more useful standards.
C.To enable standard setting body to issue more useful and consistent
pronouncements over time
D.All of these.
Question 80: Which of the following is inventory classified into?
A.Raw materials
B.A house held for resale
C.Work in progress
D.Finished goods
E.All of the above
Question 81: The Framework is a reporting standard.
A.True
B.False
Question 82: Which TWO of the following are listed in the IASB Framework as
enhancing qualitative characteristics' regarding financial statements?
A.The financial statements are reliable
B.Any changes of accounting policy are neutral
C.The financial statements are prepared in a timely manner
D. The financial statements are verifiable
Question 83: The cost of goods manufactured by an entity cannot include overhead
costs.
A. True
B. False
Question 84: According to IAS 2 Inventories, maintenance expenses for an item of
equipment used in the manufacturing process should be included in the cost of
inventories.
A. True
B. False
Question 85: The Matteo Company acquired a drilling machine on 1 October 20X6 at
a cost of $25,000 and depreciated it at 25% per annum on a straight-line basis. On
1 October 20X8, $5,000 was spent on an upgrade to the machine in order to
improve its efficiency and increase the inflow of economic benefits over the
machine's remaining life. According to IAS 16 Property, plant and equipment, what
depreciation expense should be recognised in profit or loss for the year ended 30
September 20X9?
A. 6,250
B. 11,250
C. 7,500
D. 8,750
Question 86: Doogie Plc’s draft net profit for the year ended 31 December 20X4 was
£67,890 before recording the depreciation charge on a new machine. Doogie Plc
acquired this machine on 1 October 20X4 for £50,000. Doogie Plc planned to
depreciated this new machine monthly on the straight-line basis over four years to
its residual value of £2,000. What is Doogie Plc’s net profit for the year ended 31
December 20X4 after charging depreciation on the machine?
A. £70,890
B. £64,890
C. Câu trả lời thứ 3
D. £64,765
Question 87: Which ONE of the following terms best describes the amount of cash or
cash equivalents that could currently be obtained by selling an asset in an orderly
disposal?
A. Fair value
B. Realisable value
C. Residual value
D. Value in use
Question 88: IAS 36 applies to which of the following assets
A. Property, plant, and equipment and intangible assets
B. Inventories
C. Assets held for sale
D. Financial assets and property plant and equipment and intangible assets
Question 90: The Huang Company has a non-current asset which had a carrying
amount in the financial statements of $18,000 at 31 December 20X9. Its tax written
down value (the tax base) at that date was $9,000. The tax rate is 30%. In
accordance with IAS 12 Income taxes, what is the deferred tax balance in respect of
this asset at 31 December 20X9?
A. 2,700 asset
B. 2,700 liability
C.9,000 asset
D. 9,000 liability
Question 91: According to IFRS 15, Revenue from contracts with customers, an
entity should disclose which TWO of the following?
A. Advances received in cash, analysed according to each material contract
B. Total amount of contract revenue recognised in the period
C. For each material contract, the aggregate costs incurred
D. Impairment losses on receivables or other assets from contracts with customers
Question 92: An entity shall apply IFRS 16 to all leases, except leases of right-of-use
assets in a sublease.
A. True
B. False
Question 93: LIFO can be applied to measure cost of inventories.
A. True
B. False
Question 94: IFRS 3 Business Combinations outlines the accounting required when
one business combines with another, such as during an acquisition or merger. A
business combination is defined as when one or more entities (subsidiaries) gains
some control of another (the parent).
A. True
B. False
Question 95: Which one of the following is not required to be disclosed in a lessee's
financial statements in relation to its leases, to comply with the requirements of IFRS
16 Leases?
A. Interest expense on lease liabilities
B. A reconciliation between the total of future minimum lease payments and their
present value
C. Total cash outflow for leases
D. Income from sub-leasing right of use assets
Question 96: At year end, Lagon plc has the closing inventory amounted to £234,000
at cost. This total includes the following two items: (1) 500 items which had cost
£50 each and normally sold for £100 each. These items are defective and can only
be sold at 50% of their normal selling price. Selling expenses were 5% of the
proceeds. (2) 300 items which had cost £50 each. After the date of the statement of
financial position they were sold for £48 each with selling expenses of £2 each. At
what amount should total inventory be shown in the Lagon plc’s statement of
financial position at year end?
A. £231,550
B. £232,750
C. £232,800
D. £232,550
Question 97: Under the principles of IAS 16 Property, plant and equipment, which
TWO of the following should be included in the cost of an item of property, plant and
equipment?
A. Installation and assembly costs
B. Costs of training staff on the new asset
C. Apportioned general overhead costs
D. Initial delivery and handling costs
Question 98: A contingent liability is not recognised in the statement of financial
position
A. True
B. False
Question 99: Deferred tax assets are the amount of income taxes recoverable in
future periods in respect of:
A.Permanent differences
B. Taxable temporary differences
C. Deductible temporary differences
Question 100: If an asset incorporates both intangible and tangible elements, it shall
be treated under __________.
A. IAS 16 Property, Plant and Equipment
B. IAS 38 Intangible Assets
C. A or B, depending which element is more significant
D. A and B
Question 101: As at 1 January 20X1, Bougs Ltd had opening inventory of £50,000.
Total purchases for 20X1 were £350,000, carriage inwards was £400 and carriage
outwards was £250. As at 31 December 20X1, Bougs had closing inventory of
£66,000. Cost of sale incurred in 20X1 should be:
A. £344,300
B. £334,400
C. £334,650
D. £334,150
Question 102: Happy Plc vacated an office building and let it out to a third party on
30 June 20X8. The building had an original cost of $800,000 on 1 January 20X0 and
was being depreciated over 50 years. It was judged to have a fair value on 30 June
20X8 of $800,000. At the year end date of 31 December 20X8 the fair value of the
building was estimated at $1.1 million. Happy Plc uses the fair value model for
investment property. What amount will be shown in revaluation surplus at 31
December 20X8 in respect of this building?
A.0
B.136,000
C.144,000
D.444,000
Question 103: If the assets acquired are not a business, the reporting entity shall
account for the transaction or other event as __________.
A.A non-controlling interest
B.An asset acquisition
C.An adjusting event
D.A business combination
Question 104: Which of the following is NOT classified as inventory?
A.Raw materials
B.A car held for resale
C.Work in progress
D.A plant
Question 105: An entity shall account for each business combination by applying the
equity method. (true; acquisition)
A.True
B.False
Question 106: According to IAS 36, goodwill should be tested for impairment
A.Only if there is an indication of impairment.
B.Every five years
C.Annually
D.On the acquisition of a subsidiary
Question 107: In cases of conflict, the requirements of the Framework prevail over
those of the relevant IFRS.
A.True
B.False
Question 108: The Conceptual Framework should
A.Lead to uniformity of financial statements among entities within the same industry
B.Eliminate alternative accounting principles
C.Guide multi-national corporations in developing countries generally accepted
auditing standards
D.Define the basic objective, terms and concepts of accounting
Question 109: A machine has a carrying amount of $85,000 at the year end of 31
March 20X9. Its market value is $78,000 and costs of disposal are estimated at
$2,500. A new machine would cost $150,000. The company which owns the
machine expects it to produce net cash flows of $30,000 per annum for the next
three years. The company has a cost of capital of 8%. What is the impairment loss
on the machine to be recognised in the financial statements at 31 March 20X9?
A.$0
B.$7,687
C.$9,500
D.$10,500
Question 110: Under IFRS 3, the acquirer shall measure the identifiable assets
acquired and the liabilities assumed at their:
A.Acquisition-date fair values
B.Acquisition-date historical cost
C.Reporting-date net book value
D.Reporting-date present value
Question 111: The Grand Company placed an order with The Little Company for new
specialist machinery. The order was non-cancellable once signed and Grand agreed
to pay for the machinery at the time the order was signed on 1 February 20X9. Little
held the machinery to Grand's order from 1 June 20X9, the date on which it was
completed. Grand commenced using the machinery on 1 August 20X9 when Little
completed the installation process. Little had staff on standby to deal with any
operating problems until the warranty period ended on 1 November 20X9. Under
IFRS 15 Revenue from contracts with customers, Little should recognise the revenue
from the sale of this specialist machinery on:
A.1 Nov X9
B.1 Aug X9
C.1 Jun X9
D.1 Feb X9
Question 112: Contingent assets must not be recognised in financial statements
unless an inflow of economic benefits is virtually certain to arise.
A.True
B.False
Question 113: An onerous contract is a contract in which __________ of meeting the
obligations under the contract __________ the economic benefits expected to be
received under it.
A.Sunk costs; exceed
B.Unavoidable costs; exceed
C.Opportunity costs; are less than
D.Avoidable costs; are less than
Question 114: Inventory should be valued at the lowest of cost, net realisable value
and replacement cost.
A.True
B.False
Question 115: In arriving at its profit before tax for the year ended 31 December
20X9 The Ryan Company has accrued royalties receivable of CU200,000 and interest
payable of CU250,000. Both royalties and interest are dealt with on a cash basis in
tax computations. What are Ryan's net temporary differences at 31 December 20X9,
according to IAS 12 Income taxes?
A.Câu trả lời thứ 1
B.Taxable temporary differences of CU450,000
C.Taxable temporary differences of CU50,000
D.Deductible temporary differences of CU50,000
Question 115: Should the cost of maintaining an acquisitions department be included
in the consideration transferred in a business combination, according to IFRS 3
Business combinations?
A.Yes
B.No
Question 116: If the closing inventory is understated, then the current year's profit
will be understated and next year's profit will be overstated.
ATrue
B.False
Question 117: As at 1 January 20X1, Bougs Ltd had opening inventory of £50,000.
Total purchases for 20X1 were £350,000, carriage inwards was £400 and carriage
outwards was £250. As at 31 December 20X1, Bougs had closing inventory of
£66,000. Cost of sale incurred in 20X1 should be:
A.£344,300
B.£334,400
C.£334,650
D.£334,150
Question 118: Which of the following does not define an “asset”?
A.A resource that is controlled by an entity as a result of past events
B. A resource which value in use exceeds its historical cost
C.A resource from which future economic benefits are expected to flow to the entity
D.None of the above
Question 119: When an item is revalued, any accumulated depreciation at the date
of the revaluation is treated in which of the following ways:
A.Restated proportionately, with the change in the gross carrying amount of the
asset, so that the carrying amount of the asset after revaluation equals its revalued
amount.
B.Eliminated against the gross carrying amount of the asset and the net amount
restated to the revalued amount of the asset.
C.Either A or B
D.Neither A nor B
Question 120: According to IAS 36, which of the following is the best evidence of an
asset's fair value less costs to sell?
A.The carrying value of the asset
B.An asset that is traded in an active market
C.The price in a binding sale agreement
D.The disposal value of the asset in an arm’s length transaction
Question 121: According to IAS 12 Income taxes, “Development costs have been
capitalised and will be amortised, but were deducted in determining taxable profit in
the period in which they were incurred. This will give rise to a deferred tax asset.”
A.True
B.False
Question 122: On 1 April 20X1, Cake plc acquired a property for £500,000. This
property is depreciated on the straight-line basis over 25 years to its residual value
of £50,000. On 31 March 20X6, Cake plc performed an impairment review and
determined that the property had a fair value less disposal costs of £380,000 and a
value in use of £370,000. What is the impairment loss in respect of the property as
at 31 March 20X6?
A.£20,000
B.£30,000
C.£40,000
D.£12,000
Question 123: Which of the following statements is true provided that the lease
transfers ownership of the underlying asset to the lessee by the end of the lease
term?
A.The lessee shall depreciate the right-of-use asset from the commencement date to
the end of the lease term
B. The lessee shall depreciate the right-of-use asset from the commencement date
to the end of the useful life of the underlying asset
C. The lessee shall depreciate the right-of-use asset from the commencement date
to the earlier of the end of the useful life of the right-of-use asset or the end of the
lease term
D. The lessee shall depreciate the right-of-use asset from the commencement date
to the later of the end of the useful life of the right-of-use asset or the end of the
lease term
Question 124: Under IAS 40 Investment Property, companies have a choice to use
either the cost model or the fair value model. Which one of the following disclosures
should be made when the fair value model has been adopted?
A. Useful lives or depreciation rates used
B. The amount of impairment losses recognised
C. Net gains or losses from fair value adjustments
D. Depreciation methods used
Question 125: According to IAS 37 Provisions, contingent liabilities and contingent
assets, a present obligation that arises from past events but cannot be reliably
measured is a contingent liability.”
A.True
B.False
Question 126: IAS 16 applies to bearer plants but it does not apply to the produce
on bearer plants.
A.True
B.False
Question 127: Happy Plc year end is 30 September 20X4. Happy Plc commenced the
development stage of a project to produce a new pharmaceutical drug on 1 January
20X4. Expenditure of $40,000 per month was incurred until the project was
completed on 30 June 20X4 when the drug went into immediate production. The
directors became confident of the project's success on 1 March 20X4. The drug has
an estimated life span of five years; time apportionment is used by Happy Plc where
applicable. What amount will Happy Plc charge to profit or loss for development
costs, including any amortisation, for the year ended 30 September 20X4?
A.$40,000
B.$8,000
C.$88,000
D.$80,000
Question 128: Popping Ltd has a machine which cost £50,000 and has a carrying
amount of £40,000 on 1 June 20X7. This machine is depreciated at 20% per annum
using the reducing balance method. On 31 May 20X8, Popping Ltd carried out an
impairment review and has assessed that the fair value less disposal costs of the
machine was £28,400 and the value in use was £29,000. What is the impairment
loss in respect of the machine as at 31 May 20X8?
A.£18,400
B.£3,600
C.£1,000
D.£3,000
Question 129: No disclosure of a contingent liability is required if the possibility of a
transfer of economic benefits arising is remote.
A.True
B.False
Question 130: Should the fees paid to accountants to effect the combination be
included in the consideration transferred in a business combination, according to
IFRS 3 Business combinations?
A. yes
B. No
Question 131: According to IAS 16 Property, plant and equipment, the cost includes
the fair value of any non-monetary consideration given to acquire an asset.
A.True
B.False
Question 132: The closing inventory of Hooray Ltd amounted to £123,000 at cost at
year end of 30 April 20X4. This total figure includes the following items: (1) 600
items which had cost £25 each and normally sold for £40 each. These items were
sold in May 20X4 for £25. Selling expenses were £300. (2) 10 items which had been
in inventory for many years and which had been purchased for £50 each, sold in
May 20X4 for £100 each with selling expenses of £3 each. What amount should be
shown in the Hooray Ltd’s statement of financial position for inventory at 30 April
20X4?
A.£123,000
B.£122,000
C.£123,700
D.£122,700
Question 133: Which of the following items qualify as an intangible asset under IAS
38?
A. College tuition fees paid to employees who decide to enroll in an executive M.B.A
program at Harvard University while working with the company.
B. Legal costs paid to intellectual property lawyers to register a patent.
C. Advertising and promotion on the launch of a huge product.
D. Operating losses during the initial stages of the project.
Question 134: Under IAS 16, in the case of an exchange of assets, if it is impossible
to identify the fair value of the acquired asset
A.The residual value is used
B.The asset cannot be capitalized
C.The cost of the exchanged asset is used ?
D.The fair value of the exchanged asset is used with adjustments of cash received or
paid.
Question 135: According to IAS 12 Income taxes, interest expense accrued but
included in taxable profit on a cash basis should be classified under deductible
temporary differences.
A.True
B.False
Question 136: Which of the following statements do agree with IAS 36?
A.An entity shall assess at the end of each reporting period whether there is any
indication that its assets may be impaired
B.An entity shall assess at the end of each reporting period the recoverable amount
of its assets
C.An entity shall test its assets on impairment at the end of each reporting period
D.All of the above
Question 137: Which of the following may be included in the cost of finished goods
of a manufacturing company?
A.Production labour wages
B.Storage expenses for finished goods
C.Depreciation of delivery vehicles
D.Carriage outwards
Question 138: Which of the following terms does this statement define: “the amount
of cash or cash equivalents paid or the fair value of other consideration given to
acquire an asset at the time of its acquisition or construction”?
A.Cost
B.Deemed cost
C.Fair value
D.Present value
Question 139: Once recognized, intangible assets can be carried at:
A.Revalued amount less accumulated impairment.
B.Cost less accumulated impairment and less accumulated amortization.
C.Cost less accumulated impairment.
D.Cost plus a notional increase in fair value since the intangible asset is acquired.
Question 140: An entity shall not recognise a contingent liability __________.
A.Unless an entity has a present liability as a result of a past event
B.Unless it is probable that an outflow of resources embodying economic benefits
will be required to settle this liability
C.Unless a reliable estimate can be made of the amount of this liability
D.None of the above
Question 141: If the carrying amount of the right-of-use asset is reduced to zero and
there is a further reduction in the measurement of the lease liability, a lessee
__________.
A.Shall recognise any remaining amount of the remeasurement in other
comprehensive income
B.Shall recognise any remaining amount of the remeasurement in revaluation
reserve
C.Shall recognise any remaining amount of the remeasurement in profit or loss
D.Shall not recognise any remaining amount of the remeasurement
Question 142: Which of the following shall a lessee classify in the statement of cash
flows?
A.Cash payments for the principal portion of the lease liability within operating
activities
B.Cash payments for the interest portion of the lease asset
C.Short-term lease payments, payments for leases of low-value assets and variable
lease payments not included in the measurement of the lease liability within
financing activities
D.All of the above
E.None of the above
Question 143: Under IAS 40 Investment property, which one of the following
additional disclosures must be made when an entity chooses the cost model as its
accounting policy for investment property?
A.The present value of the property
B.The net realisable value of the property
C.The value in use of the property
D.The fair value of the property
Question 144: Which ONE of the following statements best describes the term 'going
concern'?
A.When current liabilities of an entity exceed current assets
B.The ability of the entity to continue in operation for the foreseeable future
C. The potential to contribute to the flow of cash and cash equivalents to the entity
D. The expenses of an entity exceed its income
Question 145: Under IASB Conceptual Framework for Financial Reporting, which one
of the following terms best describes information that influences the economic
decisions of users?
A.Relevant
B.Prospective
C.Understandable
D.Reliable
Question 146: Using the definitions in the IASB Conceptual Framework for Financial
Reporting, which two of the following are examples of 'expenses'?
A. A decrease in economic benefits during the accounting period
B. A decrease in equity arising from a distribution to equity participants
C. A reduction in income for the accounting period
D. A loss on the disposal of a non-current asset
Question 147: Using the revaluation option, can fair values be estimated, if there is
no market-based evidence?
A. Yes, if the asset is specialised and rarely sold, by using an income, or a
depreciated replacement cost approach
B. Yes, if the asset is specialised and rarely sold, by using indexation
C. No
D. Yes, if expert valuation is available
Question 148: Under IAS 36 Impairment of assets, which one of the following
statements best describes 'value in use'?
A. The amount of cash or cash equivalents that could currently be obtained by
selling an asset in an orderly o
B. The present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its ultimate disposal
C. The net amount which an entity expects to obtain for an asset at the end of its
useful life
D. The amount at which an asset could be exchanged between knowledgeable,
willing parties in an arm's length transaction
Question 149: According to IAS 40, transfer to or from investment property should
only be made when there is a change in their use
A. True
B. False
Question 150: It may be acceptable for inventories to be valued at selling price less
estimated profit margin.
A. True
B. False
Question 151: At year end, Lagon plc has 5,000 goods A costing £6 each and 3,000
goods B costing £5 each. However, 300 goods A are defective and can only be sold
at £5 each with selling expenses of £1 each. What is total inventory stated in the
Lagon plc’s statement of financial position?
A. £45,000
B. £44,700
C. £44,400
D. £44,000
Question 152: Which of the following is NOT classified as inventory?

A.
Raw materials

B.
An office building

C.
Work in progress

D. Finished goods
Question 153: Which is not a purpose of the Conceptual Framework?
A. Provide definitions of key terms and concepts
B. Provide specific guidelines for resolving situations not covered by existing
accounting standards
C. Assist accountants in selecting among alternative accounting and reporting
methods
D. Assist IASB in the standard-setting process
Question 154: Under IAS 16, using the cost model, the asset in accounted for at:
A.Cost less accumulated depreciation
B. Cost
C. Cost less accumulated depreciation and any impairment losses
D. Cost less accumulated impairment losses
Caau 155: Which of the following does define the term “provision”?
A. A deferred liability
B. A liability of uncertain timing or amount
C. A contingent liability
D. A contractual liability
Câu 156: How should import duties be dealt with when valuing inventories at the
lower of cost and net realisable value (NRV) according to IAS 2 Inventories?
A.Ignored
B.Deducted from cost
C.Deducted in arriving at NRV
D.Added to cost
Câu 157: In valuing work in progress, materials costs, labour costs and variable and
fixed production overheads must be included.
A.True
B.False
Câu 158: An investment property shall be measured initially at its __________.
A.Cost
B.Fair value
C.Deemed cost
D.Value in use
Question 159: According to IAS 38 Intangible assets, expenditure during the
development phase of a project may sometimes be capitalised as an intangible
asset.
A. True
B. False
Question 160: On 1 January 20X1, Pink Plc purchased some plant at a cost of
£33,000. It cost £800 to deliver the plant to Pink Plc’s factory and set it up, plus
£1,000 for a licence to operate it. At that time, the directors of Pink Plc planned to
depreciate the plant on the straight-line basis over 8 years to its residual value of
£2,000. On 1 January 20X3, the directors of Pink Plc decided to change the
depreciation method to reducing balance, at 40%. What is the carrying amount of
Pink Plc’s plant in its statement of financial position at 31 December 20X3?
A.£15,210
B.£15,660
C. £15,510
D. £15,960
Question 161: The financial statements of the Farren Company for the year ended
31 December 20X8 included a provision for restructuring of £7 million and an
environmental provision of £3 million. At 31 December 20X9, the environmental
provision was no longer required and £2 million of the restructuring provision was no
longer required. Under IAS 37, the environmental provision is to be written back to
profit or loss.
A.True
B.False
Question 162: According to IAS 2 Inventories, cost of factory management should be
included in the cost of inventories.
A.True
B.False
Question 163: The Junior Company leased out a freehold building for 20 years with
effect from 1 January 20X1. The economic life of the building is 40 years. As part of
the negotiations for the lease, Junior granted the tenant a rent-free period. Annual
rentals of £1.6 million are payable in advance on 1 January, commencing in 20X2.
What income should Junior recognise in profit or loss in the year ended 31
December 20X1, according to IFRS 16 Leases?
A.1.52 million
B.0
C.1.44 million
D.1.60 million
question 164: Candy Plc received an invoice on 31 March 20X9 for maintenance
work done on one of its machines. £21,000 of the cost is actually for a machine
upgrade, which will improve the machine’s efficiency. However, the accountant
charged the whole amount of the invoice to maintenance costs. This machine is
depreciated at 20% per annum on a straight-line basis, with a proportional charge in
the years of acquisition and disposal. Which amount will be understated in respect of
Candy Plc’s profit for the year ended at 30 June 20X9?
A.£16,800
B.£21,000
C.£19,950
D.£19,600
Question 165: For each business combination, one of the combining entities shall be
identified as the __________.
A.Entity that has joint control
B.Controlling entity
C.Acquirer
D.Combined entity
Question 166: According to IAS 36, value-in-use is
A.The amount at which an asset is recognized in the statement of financial position
B.The discounted present value of future cash flows arising from use of the asset
and from its disposal.
C.The higher of an asset’s fair value less cost to sell and its market value.
D.The market value.
Question 167: The Plaice Company acquired a new filing machine, the list price of
which was $49,000. The supplier allowed a trade discount of $1,700 off the list price.
On delivery, the cost of installing the machine in its desired location was $450.
According to IAS 16 Property, plant and equipment, at what cost should the filing
machine be measured in the financial statements of Plaice?
A.49,000
B.47,750
C.49,450
D.47,300
Question 168: Which of the following areas does IFRS 3 apply to?
A.The accounting for the formation of a joint arrangement in the financial
statements of the joint arrangement itself
B.The acquisition of an asset or a group of assets that does not constitute a business
C.A combination of entities or businesses under common control
D.None of the above
E.A and B
Question 169: Which of the following does not define investment property?
A.Property held to earn rentals
B.Property held for capital appreciation
C.Property used in the production or supply of goods or services
D.A and C
Question 170: The Kolpa Company purchased a building in January 20X6 for
CU150,000. The accounting depreciation charge is 5% straight-line. For tax
purposes, depreciation of 2% straight-line is deducted annually. The remaining cost
will be deducted in future periods, either as depreciation or through a deduction on
disposal. The tax rate is 25%. According to IAS 12 Income taxes, what should be the
deferred tax balance at 31 December 20X9?
A.CU3,375 deferred tax asset
B.CU3,375 deferred tax liability
C.CU4,500 deferred tax asset
D.CU4,500 deferred tax liability
Question 171: How shall a lessee measure the lease liability after the
commencement date?
A.By increasing the carrying amount to reflect interest on the lease liability
B.By reducing the carrying amount to reflect the lease payments made
C.By remeasuring the carrying amount to reflect any reassessment or lease
modifications or to reflect revised in-substance fixed lease payments
D.B and C
E.All of the above
Question 172: Flappy Co entered into a 4-year lease agreement on 1 January 20X5.
The agreement meets the definition of a lease in accordance with IFRS 16. An initial
payment of $160,000 was made on 1 January 20X5 followed by three annual
payments on 1 January of $150,000 each. The rate implicit in the lease is 10%.
Flappy Co incurred initial direct costs of $20,000 to set up the lease. Which of the
following entries could fully reflect the event at 1 January 20X5?
A.Debit right-of-use asset $553,028, Credit Lease liability $553,028
B.Debit right-of-use asset $533,028, Credit Lease liability $533,028
C.Debit right-of-use asset $553,028, Credit Lease liability $393,028, Credit Cash
$160,000
D.Debit right-of-use asset $533,028, Credit Lease liability $373,028, Credit Cash
$160,000
question 173: Which of the following shall be accounted in accordance with IAS 38?
A.Motion picture films
B.Patents and copyrights
C.Manuscripts
D.All of the above
Question 175: A company's financial statements must disclose the accounting
policies used in measuring inventories.
A. True
B. False
Question 176: According to IAS 36, an asset is impaired if:
A.Its carrying amount equals the amount to be recovered through use (or sale) of
the asset
B.If it has been damaged
C.Its carrying amount exceeds the amount to be recovered through use (or sale) of
the asset
D.The amount to be recovered through use (or sale) of the asset exceeds its
carrying amount
question 173: Trade discounts received must be deducted in measuring cost of
inventories.
A. True
B. False
Question 174: According to IAS 38 Intangible assets, intangible assets with a finite
useful life should be measured at cost and tested annually for impairment.
A.True
B.False
Question 175: A truck held for resale should be considered as a non-current asset in
the statement of financial position.
A.True
B.False
Question 176: According to IFRS 15 Revenue from contracts with customers, which
of the following factors is not taken into account when establishing the transaction
price of a contract?
A.Financing components
B.Variable consideration in contract price
C.Non-cash consideration
D.Customer credit quality
Question 177: The __________ of an asset is the estimated amount that an entity
would currently obtain from disposal of the asset, after deducting the estimated
costs of disposal, if the asset were already of the age and in the condition expected
at the end of its useful life.
A.Residual value
B.Value in use
C.Cost to sell
D.Deemed cost
Question 178: According to IAS 12 Income taxes, deferred tax assets are the
amounts of income taxes recoverable in future periods in respect of deductible
permanent differences.”
A.True
B.False
Question 179: The definition of an intangible asset comprises: (i) Identifiability; (ii)
Control over a resource; (iii) Existence of future benefits; (iv) Residual value
A.(i) and (ii)
B.(i) and (iii)
C.(i), (ii) and (iii)
D.(i), (ii), (iii) and (iv)
Question 180: Under IFRS 15 Revenue from contracts with customers, which of the
following is not given as a method that can be used to establish the stand alone
selling price of the separate performance obligations in a contract?
A.Adjusted market assessment approach
B.Simple cost approach
C.Expected cost plus a margin approach
D.Residual approach
Question 181: According to IAS 37 Provisions, contingent liabilities and contingent
assets, which two of the following best describe the sources of a legal obligation? A
legal obligation is an obligation that derives from:
A.a contract
B.an established pattern of past practice
C.a published policy
D.legislation
Question 182: According to IAS 23 Borrowings, a qualifying asset is an asset that
necessarily takes __________ to get ready for its intended use or sale.
A.A substantial period of time
B.At least 6 months
C.At least 12 months
D.No more than 12 months
Question 183: Which two of the following are examples of deferred tax assets?
A.permanent differences
B.taxable temporary differences
C.the carryforward of unused tax losses
D.deductible temporary differences
Question 184: Under IAS 23 Borrowings, which of the following cannot be a
qualifying asset?
A. Power generation facilities
B. Manufacturing plants
C. Intangible assets
D. Financial assets
Question 185: Which of the following facts would indicate that a contract's
transaction price had a financing component that would need to be accounted for
separately under IFRS 15 Revenue from contracts with customers?
A.The customer paid in advance and the timing of delivery is at the customer's
discretion
B.The credit terms are significantly longer than are normally offered to customers for
the same goods
C.The consideration, or an element of it, is variable because it is a sales-based
royalty
D.The customer has the option to delay payment by a year and the price if they
choose this option is noticeably different from the price for immediate cash payment
Question 186: According to IAS 23 – Borrowing Costs, investment income generated
from loans taken in order to finance a qualifying asset should be:
A.Shown as Investment income in the Income Statement
B.Added to borrowing costs
C.Deducted from borrowing costs
D.Added to cost of property, plant and equipment
Question 187: The Chadwick Company sells electrical goods covered by a one-year
warranty for any defects. Of sales of CU70 million for the year, the company
estimates that 3% will have major defects, 5% will have minor defects and 92% will
have no defects. The cost of repairs would be CU5 million if all the products sold had
major defects and CU3 million if all had minor defects. What amount should
Chadwick recognise as a warranty provision?
A.300,000
B.190,000
C.8,000,000
D.5,600,000
Question 188: The Kuma Company is being sued for damages. When preparing its
20X5 financial statements the directors took the view that the likelihood of any
payments having to be made to the claimant was remote. In preparing the 20X6
financial statements their view was that it was possible that such payments would
have to be made and in preparing the 20X7 statements their view was that such
payments were probable. For the 20X8 statements there was virtual certainty that
the payments would have to be made. The payments were made in the 20X8
accounting period. Under IAS 37 Provisions, contingent liabilities and contingent
assets, in which set of financial statements should a contingent liability first be
disclosed?
A.20X8
B.20X7
C.20X6
D.20X5
Question 189: According to current guidance within IAS 23 Borrowing costs, which
of the following treatments are required for borrowing costs incurred that are
directly attributable to the construction of a qualifying asset? Treatment 1: Recognise
as an expense in the period incurred; and Treatment 2: Capitalise as part of the cost
of the asset.
A.Treatment 1 only
B.Treatment 2 only
C.Either Treatment 1 or Treatment 2
D.Neither Treatment 1 nor Treatment 2
Question 190: Leclerc has borrowed CU 2.4 million to finance the building of a
factory. Construction is expected to take two years. The loan was drawn down and
incurred on 1 January 20X9 and work began on 1 March 20X9. CU 1 million of the
loan was not utilised until 1 July 20X9 so Leclerc was able to invest it until needed.
Leclerc is paying 8% on the loan and can invest surplus funds at 6%. Calculate the
borrowing costs to be capitalised for the year ended 31 December 20X9 in respect of
this project.
A.130,000
B.192,000
C.100,000
D.162,000
Question 191: The Hogbean Company is a construction company that has the
following costs on its contracts: (1) Project managers' costs; (2) Purchase of supplies
for construction wok; and (3) Payments to subcontractors. According to IFRS 15
Revenue from contracts with customers, which costs may be included within contract
costs?
A.Cost (2) and cost (3) only
B.Costs (1), (2) and (3)
C.Cost (1) and cost (3) only
D.Cost (1) and cost (2) only