Malaysian Conceptual Framework

     The objective of financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions. Which of the following is NOT included in the decision as prescribed by the 2018 Conceptual Framework for Financial Reporting:

• Buying, selling or holding equity and debt instruments

•       Providing or settling loans and other forms of credit.

• Exercising rights to vote on, or otherwise influence, management’s actions that affect the use of the entity’s economic resources

• Selecting the best method for maximizing the company’s earnings

     Reporting financial information imposes costs, and it is important that those costs are justified by the benefits of reporting that information.  Below are the types of costs incurred by providers of financial information EXCEPT:

• Costs of collecting financial information

• Costs of processing financial information

• Costs of interpreting financial information

•       Costs of disseminating financial information

        “Financial information may provide feedback about (confirms or changes) previous evaluations”. Based on the 2018 Conceptual Framework for Financial Reporting issued by MASB, this statement is referred to:

•        Confirmatory value.

•        Future value.

• Predictive value

• Fair value

 

     __________ is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

Faithful representation encompasses the following characteristics, EXCEPT

• Complete

• Materiality

• Neutral

• Free from error

The revised Conceptual Framework for Financial Reporting (2018) contains the

following chapters:

i The Elements of Financial Statement

ii Preparation, Presentation and Disclosure

iii Concepts of Capital and Capital Maintenance

iv Qualitative Characteristics of Relevance Financial Information

• i and ii

• i and iii

• i, ii and iii

• i,ii,iii,iv

Under this concept, profit is earned if the physical productive capacity of the entity at

the end of the period exceeds the physical productive capacity at the beginning of the

period after excluding any distributions to and contributions from owner during the

period.

The above statement best describes about ____________ concept.

• financial

• physical

• financial capital maintenance

• physical capital maintenance

If the financial information available to decision-makers in time to be capable of

influencing their decisions, it is said that it has _____________ qualitative

characteristic.

• verifiability

• understandability

• relevance

• timeliness

Among the reasons for developing an accounting framework include as follows

EXCEPT:

• to provide a basis for setting of high-quality and consistent reporting standard

• to identify a foundation for financial reporting

• to provide financial information about the reporting entity

• to serve as a reference point for resolving accounting issues and disputes

Decreases in assets, or increases in liabilities, that result in decreases in equity, other

than those relating to distributions to holders of equity claims depicts:

• Assets

• Liabilities

• Income

• Expenses