CFAS REVIEWER PT.2

The presentation and disclosure requirement achieves all of the following, except

• a. An effective communication tool

• b. More relevant and faithfully represented financial information

• c. Understandability and comparability of information

• d. Financial position, financial performance and cash flows

It is the sorting of assets, liabilities, equity, income and expenses with similar characteristics.

• a. Classification

• b. Summarization

• c. Interpretation

• d. Recognition

All of the following can considered appropriate classification, except

• a. Current and noncurrent assets

• b. Current and noncurrent liabilities

• c. Ordinary shares and preference shares

• d. Offsetting asset and liability

Income and expenses are classified as

• a. Profit or loss and other comprehensive income

• b. Profit loss and retained earnings

• c. Retained earnings and other comprehensive income

• d. Ordinary and extraordinary

What is the new term to describe the income statement or statement of profit or loss together with the statement showing other comprehensive income.

• a. Income statement

• b. Statement of comprehensive income

• c. Statement of other comprehensive income

• d. Statement of financial performance

Financial capital is defined as

• a. Net assets in monetary terms.

• b. Net assets in terms of physical productive capacity.

• c. Legal capital.

• d. Share capital issued and outstanding.

The physical capital maintenance concept requires the adoption of which measurement basis?

• a. Historical cost

• b. Current cost

• c. Fair value

• d. Present value

Which concept is applied to net income and other comprehensive income?

• a. Financial capital

• b. Physical capital

• c. Legal capital

• d. Borrowed capital

Which statement regarding the term profit is true?

• a. Profit is any amount over and above that required to maintain the capital at the beginning of the period.

• b. Profit is equal to income minus expenses.

• c. Profit is the equivalent of net income under IFRS.

• d. All of these statements are true about the term profit.

Under the financial capital concept, net income occurs when

• a. The nominal amount of net assets at year-end increased.

• b. The physical productive capital at year-end increased after excluding any distributions to and contributions from owners.

• c. The nominal amount of net assets at year-end increased after excluding distributions to and contributions from owners.

• d. The physical productive capital at year-end increased.