ST WEEK 3 - AKM1 Gn 23/24

On January 1 a company have the supplies for $90, at the end of the period the supplies on hand amounted to $20. If the company follows the expense recognition assumption, what should be expensed by the company? Why?

• $90, the supplies should be expensed when the company first bought the supplies on January 1

• 
  $70, the company should expense the supplies at the end of the period according to the usage of supplies company

• $20, the company should expense the supplies at the end of the period

• The company should not make any journal entry

Valuing the assets at fair value is inconsistent with the

• Periodicity principle

• Economic entity assumption

• Historical cost principle

• Full disclosure principle

Principles of Financial Reporting, is on ... level of Conceptual Framework

• 1

• 2

• 3

• None of the above

Company B rent the building of Company A from March 1 to June 1. Company A receive the payment for rent on February 28, When will company A recognize its full revenue?

• February 28

• June 1

• March 1

• No answer is correct

IFRS stands for…

• International Financial Reporting Standards

• Interim Finance & reporting standards

• Internal Financial Reporting Standards

• International Financial Recognition Standards

The Conceptual Framework describes prudence as:

• 
  
  A preference towards the earlier recognition of expenses and liabilities than of income and assets

• A bias towards understating assets or income and towards overstating liabilities or expenses

• The exercise of caution when making judgements under conditions of uncertainty

• A form of accounting conservatism

A conceptual framework for financial reporting is..

• A set of items which make up an entity's financial statements

• A set of regulations which govern financial reporting

• A set of financial reporting standards

• A set of principles which underpin financial reporting

Expense recognition follows revenue recognition

• TRUE

• FALSE

According to the principles of accounting, when does the company recognize its expense?

• when the company have received the benefit from the transaction

• when the company pays for the expense

• when the company issued bond payable

• when the company order goods/services

Two fundamental qualities of useful information are___ and ___

• Understandability and Consistency

• Comparability and Flexibility

• Verifiability and timeliness

• Relevance and Faithful representation