Financial Reporting

Which of the following best describes the purpose of disclosure notes in the financial statements?

• To provide more detail for the users of financial statements about the information in the balance sheet and statement of profit or loss

• To allow companies to present their financial results in a more favourable way by only disclosingsome things in the notes and not on the main financial statements.

• To give all the detail of all the transactions that occurred during the period because the mainfinancial statements only present a summary.

• To explain the accounting treatment adopted where management have chosen not to apply accounting standards.

In preparing a company's statement of cash flows complying with IAS 7 Statements of Cash Flows, which ONE of the following items could form part of the calculation of cash flow from financing activities?

• Dividend paid

• Issue of bonus shares

• Proceeds of sale premise

• Payment of salaries

Which ONE of the following statements correctly describes the contents of the Statement of Financial Position?

• A list of ledger balances shown in debit and credit columns

• A list of all the assets owned and all the liabilities owed by a business

• A record of income generated and expenditure incurred over a given period

• A record of the amount of cash generated and used by a company in a given period

What is the role of the IASB?

• Oversee the standard setting and regulatory process

• Formulate international financial reporting standards

• Review defective accounts

• Control the accountancy profession

Which of the following accounting concepts means that similar items should receive a similar accounting treatment?

• Going Concern

• Accrual

• Matching

• Consistency

Which term refers to the amount by which the carrying amount of an asset exceeds its recoverable amount?

• Residual value

• Depreciable amount

• Impairment loss

• Recoverable amount

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.

• Residual value

• Value in use

• Carrying value

• Depreciable value

Spare parts and servicing equipment are usually accounted for as:

• Inventory

• Separate class of fixed assets

• Expensed off to profit or loss

• Always capitalised

An expenditure which benefits only the current period is known as:

• Revenue expenditure

• Capital expenditure

• Current expenditure

• Deferred expenditure

Which of the following expenditures is a capital expenditure?

• Purchase of raw material

• Purchase of plant

• Rent

• Depreciation