• A conceptual framework for financial

reporting is:
1.A set of items which make up an entity's
financial statements
2.A set of regulations which govern financial
reporting
3.A set of principles which underpin financial
reporting
4.A set of financial reporting standards
• list the purposes of the framework for
following parties;
- council
- Preparers
- Auditors
- Users
• The fundamental objective of financial reporting is;
1. To provide information to managers for decision
making
2. To provide information to government in order to
impose tax on revenue
3. To provide information to auditors in order to provide
an opinion on financial statements
4. To provide information to check the compliance of
financial statements with the SLFRSs.
5. To provide information for decision making by the
stakeholders
• Which of the following is not an enhancing
qualitative characteristic of financial
information as per the CFFR?
a)Comparability
b)Verifiability
c) Understandability
d)Relevance
e)Timeliness
• A company has bought a land 8 years ago and its
fair value now is 4 times its purchase price. If the
land is revalued at its fair value, which of the
following qualitative characteristics of accounting
information does it reflects?
a) Comparability
b)Relevance
c) Reliability
d)Substance over form
e) Understandability
• State the three characteristics of a liability as
per the CFFR followed in Sri Lanka.

• State the three characteristics of an asset as

per the CFFR followed in Sri Lanka
• The elements of financial statements which
relate to financial position are:
1.Assets, liabilities and equity  
2.Income, expenses and equity  
3.Income and expenses  
4.Assets, liabilities, income and expenses
• For each item below, state the element of
financial statement in which it is recognized/
1. Retained earnings
2. Interest receivable
3. Loss on the sale of an equipment
4. Provision for warranty
• If the current cost measurement basis is used,
assets are measured at:
1.The amount which could be obtained by
selling them  
2.The amount paid to acquire them  
3.Replacement cost  
4.Present value