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The Conceptual Framework deals with the qualitative characteristics of financial statements. Is this statement true or false?

• 1. True

• 1. False

The Conceptual Framework normally prevails over International Financial Reporting Standards where there is a conflict between the two. Is this statement true or false?

• True

• False

The Conceptual Framework deals with the objectives of financial statements. Is this statement true or false?

• True

• False

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

• True

• False

Is the following statement true or false, according to IAS 2 Inventories? “Cost of factory management should be included in the cost of inventories.”

• True

• False

 Profit is the residual amount that remains after expenses have been deducted from income.

• True

• False

Is the following statement true or false, according to IAS 2 Inventories? “Maintenance expenses for an item of equipment used in the manufacturing process should be included in the cost of inventories.”

• True

• False

Are the following statements regarding the term 'profit' true or false?

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

2. Profit is the residual amount that remains after expenses have been deducted from income.

• 1.False 
  2. False

• 1.False 
  2. True

• 1.True 
  2. False

• 1.True 
  2. True

Which one of the following terms best describes financial statements whose basis of accounting recognises transactions and other events when they occur?

• Accrual basis of accounting

• Cash basis of accounting

• Invoice basis of accounting

• Going concern basis of accounting

Using the definitions in the IASB Conceptual Framework for Financial Reporting, which two of the following are examples of 'expenses'?

• A decrease in economic benefits during the accounting period

• 1. A decrease in equity arising from a distribution to equity participants

• 1. A reduction in income for the accounting period

• 1. A loss on the disposal of a non-current asset