2022 Accounting Exam

IFRS 1 pertains to the first time adoption of International Financial Reporting Standards which also apply to changes in accounting policies made by an entity that already applies IFRS.

• True

• False

IAS 1 states that a complete set of financial statements includes statements of the financial position, profit and loss and other comprehensive income, changes in equity and cash flows

• True

• False

Under the cash basis of accounting, transactions and events are recognized when they occur

• True

• False

Fair market value of inventories is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale

• True

• False

Depreciation is the systematic allocation of the depreciable amount of an item of property, plant and equipment over its estimated useful life

• True

• False

An operating lease is a lease that transfers substantially all the risks and rewards incident to ownership of an asset

• True

• False

IFRS stands for International Financial Reporting Statements

• True

• False

IAS 7 defines cash equivalents as short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. The highly liquid investments should have maturity of three months or less

• True

• False

The losses from sale of capital assets need not be deducted from revenue in calculating net income

• True

• False

The purpose of an audit is to uncover theft and fraud so that the users of the financial statements can have a high level of assurance that all money is accounted for

• True

• False