BSNS115 PASS Week 2

What is the definition of an asset?

• A resource controlled by the entity, arising from a past event resulting in an inflow to the entity of resources embodying future economic benefit.

• A resource a company owns and controls do to a past event, embodying present economic benefit.

• An obligation controlled by the entity, arising from a past event resulting in an inflow to the entity of resources embodying future economic benefit.

• An obligation arising from past events, resulting in an inflow of resources embodying future economic benefits.

What is a liability?

• A past obligation arising from future events, the settlement of which will result in an outflow of resources from the entity in the form of economic benefits

• A past obligation arising from future events, the settlement of which will result in an inflow of resources to the entity in the form of economic benefits

• A present obligation arising from past events, the settlement of which will result in an outflow of resources from the entity in the form of economic benefits

• A present obligation arising from future events, the settlement of which will result in an outflow of resources from the entity in the form of economic benefits

Who uses accounting information? (You can check multiple)

• Internal Users

• External Users

• Stakeholders

• Existing Shareholders

What kind of accounting is about the preparation and presentation of financial statements to allow users to make economic decisions about the entity?

• Cost Accounting

• Financial Accounting

• Preparation Accounting

• Management Accounting?

Predominately about planning and decision making for future events, providing economic information for internal users and formulating plans and budgets describes what?

• Internal controls

• GAAP

• Financial Accounting

• Management Accounting

What are the enhancing qualitative characteristics?

• Comparability, Verifiability, Timeliness, Linkability

• Understandability, Relativity, Realistic, Timeliness

• Understandability, Comparability, Verifiability, Timeliness

• Subjectivity, Comparability, Verifiability, Relativity

Information is material if...

• Omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial reports make on the basis of those reports, which provide financial information about a specific reporting entity.

• If it is capable of making a difference in the decisions made by users. Information may be capable of making a difference in a decision even if some users choose not to take advantage of it or are already aware of it from other sources.

• it faithfully represents the substance of the phenomena that it purports to represent.

• it is complete, neutral and free from error.

Which are examples of current assets?

• Petty cash, money market funds, inventory, 2 year term deposit

• Inventory, long-term loans, debentures, 6 month term deposit

• Petty cash, money market funds, 6 month term deposit, inventory, accounts receivable

• Trade receivables, petty cash, equipment and supplies

Contingent liabilities are...

• Confirmed liabilities recorded on the balance sheet

• Unconfirmed liabilities recorded on the balance sheet

• Confirmed liabilities not recorded on the balance sheet but disclosed in the notes due to their intangible nature

• Not recorded on the balance sheet but disclosed in the notes to the financial statements whose existence confirmed on the outcome of a future event

Equity is... (You can check multiple)

• the residual interest in the assets of the entity after deducting all its liabilities

• Net assets = Assets - Liabilities

• Contributed Capital + Reserves - Retained Earnings - Distributions

• the total interest in the assets of the entity after adding all its liabilities