CFAS and FAR Quiz Bee

An onerous contract is a contract in which ________________ of meeting the obligation under the contract __________________ the economic benefits expected to be received under

• A. Avoidable costs; are less than

• B. sunk costs; exceed

• C. Opportunity costs; are less than

• D. unavoidable cost; exceed

The deferred income tax liability:

• a. Can result in a deferred income tax asset

• b. Is never recorded.

• c. Is a contingent liability

• d. Represents income tax payments that are deferred until future years because of temporary differences between GAAP rules and tax accounting rules.

How is an equity instrument defined?

• a. The instrument includes no contractual obligation to deliver cash or another financial asset.

• b. The instrument includes no contractual obligation, and the instrument will/may be settled in the issuer's own equity instrument 

• c. The instrument includes a contractual obligation, and the instrument will/may be settled in the issuer's own equity instrument 

• d. The instrument includes contractual obligation and will/may be settled in the issuer's own debt instrument  

The elements directly related to the measurement of financial position are?

•     a. Asset, liability, equity, income, and expenses

•     b. Asset and liability

•     b. Asset and revenue

•     d. Asset, liability, and equity

It is a present economics resources controlled by the entity as a result of past events

• a. expenses

• b. assets

• c. equity

• d. liabilities

 

Which statement in relation to income is true?

• a. Revenue encompasses both income and gain

• b. Income encompasses both revenue and gain

• c. Income encompasses revenue only

• d. Gain encompasses both income and revenue

What is fair value of an asset?

• a. The price that would be received to sell an asset in an orderly transaction between market participants. 

• b. The price that would be paid to transfer a liability in an orderly transaction between participants 

• c. The undiscounted value of future cash flows 

• d. The discounted value of future cash flows 

Impairment loss is reported 

• a. As direct deduction from retained earnings

• b. As a component of income from continuing operations

• c. As a change in accounting estimate

• d. As a component of discontinued operation

Which is the recoverable amount of an asset?

• a. Value in use 

• b. Fair value less cost of disposal

• c. Fair value less cost of disposal or value in use, whichever is lower 

• d. Fair value less cost of disposal or value in use, whichever is higher 

The process of identifying, measuring, recording, and communicating financial information about a company's activities so decision makers can make informed decisions 

• a. Finance 

• b. Accountancy 

• c. Accounting 

• d. Business