Financial Reporting Standards Quiz

What identification information does NOT need to be presented on the face of the financial statements

• Date of the end of the reporting period or the period covered by the set of financial statements or notes

• Date of preparation of the financial statements.

• The presentation currency and the level of rounding.

• Whether the financial statements are individual or group.

Dividends paid to ordinary shareholders shall be presented:

• In the statement of changes in equity as a decrease in equity.

• In the statement of other comprehensive income as a decrease in equity

• In the statement of profit or loss as other operating expense.

• In the statement of profit or loss as a financial expense

The example of a non-current asset is:

• Inventories with long production and completion times

• Deferred tax asset

• Trade receivable

• Government bond repayable in 3 months

Which of the following companies is a going concern?

• A trading company is in serious liquidity problems and a court granted an order to repay debt of CU1000000 to a creditor immediately. The company must sell its assets in order to settle this liability.

• Oil and gas company operating in Egypt has just received a court order to close the factory and stop all operations in Egypt within 1 year

• A bank suffers in the mortgage crash and a state refuses to bail it out

• State-owned company runs out of cash and is not able to repay its liabilities and salaries on time. According to applicable laws, the state must provide a low-interest loan to this company.

IAS1 permits to present expenses in the statement of profit or loss and other comprehensive income in the classification

• By function and by nature

• By segment and by operations

• By segment and by function.

• By segment and by nature.

A manufacturing company recognized a valuation provision to inventories due to their obsolescence. Does IAS1 allow offsetting inventory valuation provision against inventory balance in the statement of financial position:

• Yes, because in this case, offsetting leads to better understanding of the financial statements by their users

• No, because IAS1 states that assets and liabilities shall not be offset.

• Yes, because IAS1 specifically says that this situation is not offsetting.

• No, because IAS1 does not permit offsetting of assets and liabilities unless it is allowed by another standard

A company presented its expenses in the profit or loss as follows: cost of sales, administrative expenses, marketing expenses, distribution expenses and other expenses. This presentation is:

• By operations

• By function.

• By nature.

• By segment.

What components shall a complete set of financial statements include?

• Statement of financial position, statement of other comprehensive income, statement of changes in equity, statement of cash flows, directors report

• Statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows, accounting policies and notes.

• Statement of financial position, income statement, statement of changes in equity, statement of cash flows, accounting policies and notes, annual report

• Statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows, annual report

The example of a current liability is

• Trade payable with payment deferred beyond 1 year.

• Deferred tax liability.

• Provision for warranty repair within the second year of guarantee after sale.

• Long-term loan that became payable due to breach of covenants. The bank does NOT require immediate repayment and agrees with the original repayment schedule.

The example of a current asset is:

• Inventories with quick turnover.

• Deferred tax asset

• Trade receivable with payment deferred beyond 1 year.

• Available-for-sale financial assets.