Quiz Conceptual Framework WITH ANSWERS

International Financial Reporting Standards
Quiz:
Conceptual Framework
for Financial Reporting
Joint World Bank and IFRS Foundation ‘train
the trainers’ workshop hosted by the ECCB,
30 April to 4 May 2012
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Street| |London
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6XH| |UK.
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www.ifrs.org
Quiz: purpose of the Conceptual
Framework for Financial Reporting 2
Question 1: The purpose of the Conceptual

Framework for Financial Reporting is:
a. to assist the IASB in setting IFRSs?
b. to assist preparers of financial
statements in applying IFRSs?
c. to assist auditors in forming an opinion
on whether financial statements
comply with IFRSs?
d. to assist users of financial statements
in interpreting IFRS financial
statements?
e. all of the above?
© IFRS Foundation
© 2012 IFRS| Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Street6XH | UK. www.ifrs.org
| London EC4M 6XH | UK | www.ifrs.org
Quiz: purpose of the Conceptual
Framework for Financial Reporting 3
Question 1: The purpose of the Conceptual

Framework for Financial Reporting is:
a. to assist the IASB in setting IFRSs?
b. to assist preparers of financial
statements in applying IFRSs?
c. to assist auditors in forming an opinion
on whether financial statements
comply with IFRSs?
d. to assist users of financial statements
in interpreting IFRS financial
statements?
e. all of the above?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: objective of general purpose of
financial reporting 4
Question 2: The objective of general

purpose financial reporting is:
a. provide financial information about the
reporting entity that is useful to
existing and potential investors,
lenders and other creditors in making
decisions about providing resources to
the entity?
b. to inform government statistics?
c. to support the entity’s tax return?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M

d. to meet all the information needs of all
the users of an entity’s financial
statements?
e. to inform economic decision-making
by a broad range of users (including
managers, investors, creditors and
prudential regulators)?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M

a. provide financial information about the
reporting entity that is useful to existing and
potential investors, lenders and other
creditors in making decisions about
providing resources to the entity?
b. to inform government statistics?
c. to support the entity’s tax return?
d. to meet all the information needs of all the
users of an entity’s financial statements?
e. to inform economic decision-making by a
broad range of users (including managers,
investors, creditors and prudential
regulators)?
© 2012 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.ifrs.org
Quiz: objective of general purpose
Question 3: Which of the following could

most closely be associated with the
objective of financial reporting:
a. have a bias toward understating assets
and income and overstating liabilities
and expenses?
b. transparency and neutrality?
c. financial stability through
conservatism/prudence?
d. management discretion in reporting
financial information?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: objective of general purpose
Question 3: Which of the following could

most closely be associated with the
objective of financial reporting:
a. have a bias toward understating assets
and income and overstating liabilities
and expenses?
b. transparency and neutrality?
c. financial stability through
conservatism/prudence?
d. management discretion in reporting
financial information?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: fundamental qualitative
characteristics 9
Question 4: The fundamental qualitative

characteristics 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?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: fundamental qualitative
characteristics 10
Question 4: The fundamental qualitative

characteristics 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?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: qualitative characteristics 11
Question 5: verifiability means

knowledgeable and independent observers:
a. would reach complete agreement that a
depiction is a faithful representation?
b. cannot reach consensus that a
c. could reach consensus, but not
necessarily complete agreement, that a
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Question 5: verifiability means

knowledgeable and independent observers:
a. would reach complete agreement that a
b. cannot reach consensus that a
c. could reach consensus, but not
necessarily complete agreement, that a
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Question 6: which statement/s are true?

a. Relevance is a fundamental qualitative
characteristic.
b. Financial information without both
relevance and faithful representation is
not useful.
c. Financial information without both
relevance and faithful representation
cannot be made useful by being more
comparable, verifiable, timely or
understandable.
© 2012 IFRS Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.ifrs.org
Question 6: which of the statements below

are true?
d. Financial information that is relevant
and faithfully represented may still be
useful even if it does not have any of
the enhancing qualitative
characteristics
e. All of the above statements.
f. None of the above statements.
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Question 6: which of the statements below

are true?
d. Financial information that is relevant
and faithfully represented may still be
useful even if it does not have any of
the enhancing qualitative
characteristics
e. All of the above statements.
f. None of the above statements.
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: recognition 16
Question 7: Expenses are recognised in

comprehensive income (profit or OCI):
a. using the matching basis—on the basis
of a direct association between the
costs incurred and the earning of
specific items of income?
b. using the accrual basis—items are
recognised as assets, liabilities, equity,
income or expenses when they satisfy
the definitions and recognition criteria
for those items?
c. at the discretion of management?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: recognition 17
Question 7: Expenses are recognised in

comprehensive income (profit or OCI):
a. using the matching basis—on the basis
of a direct association between the
costs incurred and the earning of
specific items of income?
b. using the accrual basis—items are
recognised as assets, liabilities, equity,
income or expenses when they satisfy
the definitions and recognition criteria
for those items?
c. at the discretion of management?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: uncertain future cash flows 18
Question 8: Recognition criteria determine

when to recognise an item.
Measurement is determining the monetary
amounts at which to measure an item.
Uncertainties about the extent of future cash
flows:
a. only affect the decision about whether to
recognise?
b. only affect the estimation of the amount
at which to measure the item?
c. could affect both recognition and
measurement?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: uncertain future cash flows 19
Question 8: Recognition criteria determine

when to recognise an item.
Measurement is determining the monetary
amounts at which to measure an item.
Uncertainties about the extent of future cash
flows:
a. only affect the decision about whether to
recognise?
b. only affect the estimation of the amount
at which to measure the item?
c. could affect both recognition and
measurement?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: measurement 20
Question 9: How many measurement bases

does IFRSs specify for the measurement of
assets?
a. one—historical cost
b. one—fair value
c. two—historical cost and fair value
d. many—including historical cost, fair
value, value in use, estimated selling
price less costs to complete and sell,
etc
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: measurement 21
Question 9: How many measurement bases

does the IFRSs specify for the measurement
of assets?
a. one—historical cost
b. one—fair value
c. two—historical cost and fair value
d. many—including historical cost, fair
value, value in use, estimated selling
price less costs to complete and sell,
etc
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: status of Conceptual Framework 22
Question 10: the Conceptual Framework:

a. is an IFRS?
b. overrides all other IFRS requirements?
c. does not define standards for any
particular measurement or disclosure
issue?
d. is in the hierarchy that management must
in the absence of a specific IFRS
requirement apply in developing an
accounting policy that results in
information that is relevant?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Quiz: status of Conceptual Framework 23
Question 10: the Conceptual Framework:

a. is an IFRS?
b. overrides all other IFRS requirements?
c. does not define standards for any
particular measurement or disclosure
issue?
d. is in the hierarchy that management must
in the absence of a specific IFRS
requirement apply in developing an
accounting policy that results in
information that is relevant?
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
Questions or comments? 24
Expressions of individual views by

members of the IASB and its staff
are encouraged.
The views expressed in this

presentation are those of the
presenter.
Official positions of the IASB on

accounting matters are determined
only after extensive due process
and deliberation.
© IFRS Foundation
30 Cannon Street
| 30 |Cannon
London EC4M
25
The requirements are set out in International Financial

Reporting Standards (IFRSs), as issued by the IASB at 1
January 2012 with an effective date after 1 January 2012
but not the IFRSs they will replace.
The IFRS Foundation, the authors, the presenters and the
publishers do not accept responsibility for loss caused to
any person who acts or refrains from acting in reliance on
the material in this PowerPoint presentation, whether such
loss is caused by negligence or otherwise.
© 2011
© IFRS Foundation | 30 Cannon
IFRS Foundation | 30Street | London
Cannon StreetEC4M 6XH | EC4M
| London UK. www.ifrs.org
6XH | UK | www.ifrs.org

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Quiz Conceptual Framework WITH ANSWERS

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International Financial Reporting Standards

Question 1: The purpose of the Conceptual

Question 1: The purpose of the Conceptual

Question 2: The objective of general

Question 2: The objective of general

Question 2: The objective of general

Question 3: Which of the following could

Question 3: Which of the following could

Question 4: The fundamental qualitative

Question 4: The fundamental qualitative

Question 5: verifiability means

Question 5: verifiability means

Question 6: which statement/s are true?

Question 6: which of the statements below

Question 6: which of the statements below

Question 7: Expenses are recognised in

Question 7: Expenses are recognised in

Question 8: Recognition criteria determine

Question 8: Recognition criteria determine

Question 9: How many measurement bases

Question 9: How many measurement bases

Question 10: the Conceptual Framework:

Question 10: the Conceptual Framework:

Expressions of individual views by

The views expressed in this

Official positions of the IASB on

The requirements are set out in International Financial

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