Daily sales and purchases, employee costs and general overheads comprise:

The acquisition, and disposal, of long-term assets are:

Activities that result in changes in the size (and composition) of the equity capital, and borrowings are:

For an investment to qualify as a cash equivalent, it must be:

The carrying amount of property, plant and equipment was $410 million at 31 March 2011 and $ 680 million at 31 March 2012. During the year, property with a carrying amount of $ 210 million was revalued to $290 million. The depreciation charge for the year was $115 million. There were no disposals. What amount will appear on the statement of cash flows for the year ended 31 March 2012 in respect of purchases of property, plant and equipment?

Revenue is recognised as control is passed. Which of the following BEST DESCRIBES control with respect to the revenue recognition?

Let’s say you need 100,000 to build a house in 8 months but you’re going to use general current borrowings to fund yourself rather than getting a specific loan. Your current borrowings are: 1 million of 10% loan finance and 2 million of 6% loan finance. What borrowing costs should be capitalised?

Where do you put a gain or loss on a full disposal? Income statement

In which of the following situations is the net relisable value of an item of inventory likely to be lower than its cost?

What is the value of these inventories in Alphabooks's statement of financial position?

When does amortization of an intangible asset commence?

Which one is NOT indicators of impairment of impairment under IAS 36 Impairment od Assets?

The fundamental qualitative characteristics of useful financial information are:

Because of the loss arising from operating the shops, the accountant is considering whether Lisbon is a going concern. If it was decided that Lisbon is a going concern. If it was decided that Lisbon was no longer a going concern at 31 March 20X6, which of the following is correct in accordance with the Conceptual Framework?

Lichen Ltd owns a machine that has a carrying amount of $85,000 at the year end of 31 March 20X9. Its market value is $78,000 and costs of disposal are estimated at $2,500. A new machine would cost $150,000. Lichen Ltd expects it to produce net cash flows of $30,000 per annum for the next three years. The cost of capital of Lichen Ltd is 8%. What is the impairment loss on the machine to be recognised in the financial statements at 31 March 20X9?

Which of the following is NOT classified as inventory?

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

What will be the appropriate accounting treatment to unsold goods held at the year end?

A company had CU 20 million of capitalised development expenditure at cost brought forward at 1 October 20X7 in respect of products currently in production and a new project began on the same date. The research stage of the new project lasted until 31 December 20X7 and incurred CU 1.4 million of costs. From that date the project incurred development costs of CU 800,000 per month. On 1 April 20X8 the directors became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 20X8. Capitalised development expenditure is amortised at 20% per annum using the straight line method. What amount will be charged to profit or loss for the year ended 30 September 20X8 in respect of research and development costs?

Whether the following statement is True or False in accordance with IAS 40 Investment Property?

If an investment property is held at fair value, this must be applied to all of the entity’s investment properties

Under the principles of IAS 16 – Property, Plant and Equipment, which TWO of the following should be included in the cost of an item of property, plant and equipment?

According to IAS 02 – Inventories, which of the following should be included in the cost of an inventory?

Is the following statement true or false, according to IAS 12 Income taxes? “The tax base for a machine for tax purpose is grater than the carrying amount in the financial statements up to the end of the reporting period. This will give rise to a deferred tax asset

An associate is an entity in which an investor has significant influence over the investee

Which TWO of the following indicate the presence of significant influence?

Wetherby purchase a machine on 1 July 20X7 for 500,000. It is being depreciated on a straight line basis over its expected life of ten years. Residual value is estimated at 20,000. On 1 January 20X8, following a change in legislation, Wetherby fitted a safety guard to the machine. The safety guard cost 25,000 and has a useful life of five years with no residual value. What amount will be charge to profit or loss for the year ended 31 March 20X8 in respect of depreciation on this machine?

A machine has a carrying amount of CU 85,000 at the year end of 31 March 20X9. Its market value is CU 78,000 and costs of disposal are estimated at CU2,500. A new machine would cost CU150,000. The company which owns the machine expects it to produce net cash flows of CU30,000 per annum for the next three years. The company has a cost of capital of 8%. What is the impairment loss on the machine to be recognised in the financial statements at 31 March 20X9?

Intangible assets with a finite useful life should be measured at cost and tested annually for impairment.

A company’s financial statements must NOT disclose the accounting policies used in measuring inventories

According to IAS 02 Inventories, what does inventory cost include?

Is the following statements true or false, according to IAS 38 Intangible assets? “Expenditure during the development phase of a project may sometimes be capitalised as an ntangible asset.”

Winter Co incurred the following cost:

- $86,000 developing new techniques that will be put in place shortly to raise the quantity of product made;

- $57,000 researching a new process to improve the quality of the standard product; and

- $10,000 on market research into the commercial viability of a new type of product According to IAS 38, how much should be charged as research and development expenditure in profit or loss? (Ignore amortisation)

Cloud Co obtained a 60% holding in the 100,000 $1 shares of Mist Co on 1 January 20X8. Cloud Co paid $250,000 cash immediately with an additional $400,000 payable on 1 January 20X9 and one share in Cloud Co for each two shares acquired. Cloud Co has a cost of capital of 8% and the market value of its shares on 1 January 20X8 was $2.30.

What was the total consideration paid for Cloud Co's share of Mist Co?

Under IFRS 15 Revenue from contracts with customers, which of the following is not given as a method that can be used to establish the stand alone selling price of the separate performance obligations in a contract?

Which two of the following characteristics are described as fundamental qualitative characteristics that make the information provided in financial statements useful to users?

A. Comparability

B. Understandability

C. Relevance

D. Faithful representation

Which one of the following terms best describes information that influences the economic decisions of users?

Winter Co incurred the following cost:

- $43,000 developing new techniques that will be put in place shortly to raise the quantity of product made;

- $28,500 researching a new process to improve the quality of the standard product; and

- $5,000 on market research into the commercial viability of a new type of product.

According to IAS 38, how much should be charged as research and development expenditure in profit or loss? (Ignore amortisation)

Which TWO of the following facts would indicate that a contract's transaction price had a financing component that would need to be accounted for separately under IFRS 15 Revenue from contracts with customers?

A non-current asset was bought at 1 Jan 20X1 for $4,800 and depreciated by 20% per annum using the reducing balance method. On 1 Jan 20X4, it was sold for $2,400.

What was the result of this disposal?

Is the following statements true or false, according to IAS 38 Intangible assets?

“Expenditure during the development phase of a project may sometimes be capitalised as an intangible asset.”

An entity bought a machine. The following information is available

- Cost of machine: 100,000

- Delivery costs: 1,500

- Installation costs: 5,000

- One-year maintenance contract: 9,500

At what amount should the machine be capitalized in the entity's records?

Hopewell Co sells a line of goods under a six-month warranty. Any defect arising during that period is repaired free of charge. Hopewell Co has calculated that if all the goods sold in the last six months of the year required repairs the cost would be $2 million. If all of these goods had more serious faults and had to be replaced the cost would be $6 million.

The normal pattern is that 80% of goods sold will be fault-free, 15% will require repairs and 5% will have to be replaced. What is the amount of the provision required?

The Plaice Company acquired a new filing machine, the list price of which was CU 90,000. The supplier allowed a trade discount of CU 1,700 off the list price. On delivery, the cost of installing the machine in its desired location was CU 500. According to IAS 16 Property, plant and equipment, at what cost should the filing machine be measured in the financial statements of Plaice?

According to IFRS 15, which one of the following criteria must be satisfied before revenue from the sale of goods should be recognised in profit or loss?

A business has opening inventory of £8,000 and closing inventory of £2,500. Purchases for the year were £96,800, carriage inwards was £120 and carriage outwards was £80. The figure for cost of sales is:

Cash-generating unit comprises the following assets:

Building: $700,000

Plant and equipment: $200,000

Goodwill: $90,000

Current assets: $20,000

One of the machines, carried at $40,000, is damaged and will have to be scrapped. The recoverable amount of the cash-generating unit is estimated at $750,000.

What will be the carrying amount of the building after the impairment loss has been recognised? (to the nearest $'000)

Are the following statements regarding the cost of an asset true or false, according to IAS 16 Property, plant and equipment?

1. The cost includes cash equivalents paid to acquire an asset.

2. The cost includes the fair value of any non-monetary consideration given to acquire an asset.

Which one of the following statement is true when using the FIFO method instead of the periodic weighted avaerage?

Transfer to or from investment property should only be made when there is a change in their use

Assoria Co had $20 million of capitalised development expenditure at cost brought forward at 1 October 20X7 in respect of products currently in production and a new project began on the same date.

The research stage of the new project lasted until 31 December 20X7 and incurred $1.4 million of costs. From that date the project incurred development costs of $800,000 per month. On 1 April 20X8 the directors of Assoria Co became confident that the project would be successful and yield a profit well in excess of costs. The project was still in development at 30 September 20X8. Capitalised development expenditure is amortised at 20% per annum using the straight-line method.

What amount will be charged to profit or loss for the year ended 30 September 20X8 in respect of research and development costs?

According to current guidance within IAS 23 Borrowing costs, which of the following treatments are required for borrowing costs incurred that are directly attributable to the construction of a qualifying asset?

The net assets of Winter Co., a cash generating unit (CGU), are:

Property, plant and equipment: 300,000

Allocated goodwill: 50,000

Product patent: 20,000

Net current asset: 30,000

After a recession, Winter Co. has a recoverable amount of only $300,000. What would be value of the CGU's property, plant and equipment after the allocation of the impairment loss

Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible permanent differences

Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences

Wetherby Co purchased a machine on 1 July 20X7 for $500,000. It is being depreciated on a straight-line basis over its useful life of ten years. Residual value is estimated at $20,000. On 1 January 20X8, following a change in legislation, Wetherby Co fitted a safety guard to the machine. The safety guard cost $25,000 and has a useful life of five years with no residual value.

What amount will be charged to profit or loss for the year ended 31 March 20X8 in respect of depreciation on this machine?

An investment property is initially measured at cost, including transaction costs.

Cash-generating unit comprises the following assets:

Building: $700,000

Plant and equipment: $200,000

Goodwill: $90,000

Current assets: $20,000

One of the machines, carried at $40,000, is damaged and will have to be scrapped. The recoverable amount of the cash-generating unit is estimated at $750,000.

What will be the carrying amount of the building after the impairment loss has been recognised? (to the nearest $'000)

IFRS 15 allows the recognition of revenue through the duration of a contract for services if it has been demonstrated that the performance obligation is met over time.

Which two of the following methods for determining the stage of completion of a contract involving the rendering of services are specifically referred to in IFRS 15 Revenue from contracts with customers, as being acceptable?

Which of the following facts would indicate that a contract's transaction price had a financing component that would need to be accounted for separately under IFRS 15 Revenue from contracts with customers?

According to IFRS 15 – Revenue from Contracts with Customers, which one of the following criteria must be satisfied before revenue from the sale of goods should be recognised in profit or loss?

According to IAS 23 – Borrowing Costs, investment income generated from loans taken in order to finance a qualifying asset should be:

Which of the following would be recognised as an investment property under IAS 40 Investment Property in the consolidated financial statements of Build Co?

Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences.

Following initial recognition, investment property can be held at either cost or fair value

Where accumulated depreciation on an asset is greater than accumulated tax depreciation, the amount should be classified under deductible temporary differences

IAS 36 Impairment of Assets contains a number of examples of internal and external events which may indicate the impairment of an asset. In accordance with IAS 36, which of the following would definitely NOT be an indicator of the potential impairment of an asset (or group of assets)?

Geek Co is developing a new product and expects to be able to capitalise the costs. Which of the following would disallow the capitalisation of the costs?

Fido Feed Ltd has the following loans in place throughout the year ended 31 December 20X8 which constitute its general borrowings for the period.

10% bank loan: $ 140m

8% bank loan: $ 200m

On 1 July 20X8 $50 million was drawn down for construction of a qualifying asset which was completed during 20X9. What amount should be capitalised as borrowing costs at 31 December 20X8 in respect of this asset?

Under IAS 36 Impairment of assets which one of the following statements best describes 'value in use'?

Which TWO of the following are examples of deferred tax assets?

Deferred tax assets are the amount of income taxes recoverable in future periods in respect of:

A company's trial balance shows a debit balance of $2.1 million brought forward on current tax and a credit balance of $5.4 million on deferred tax. The tax charge for the current year is estimated at $16.2 million and the carrying amounts of net assets are $13 million in excess of their tax base.

The income tax rate is 30%

What amount will be shown as income tax in the statement of profit or loss for the year?

X Co. had the following bank loans outstanding during the whole of 20X8

10% loan repayable 20X9: $15m

11.5% loan repayable 20X9: $28m

The Co. began construction of a qualifying asset on 1Apr 20X8 and withdrew funds of $6m on that date to fund construction. On 1 August 20X8 an additional $2m waw withdrawn for the same purpose. Calculate the borrowing cost should be capitalized

Because of the loss arising from operating the shops, the accountant is considering whether Lisbon is a going concern. If it was decided that Lisbon was no longer a going concern at 31 March 20X6, which of the following is correct in accordance with the Conceptual Framework?

Transfer from investment property to an IAS 16, property must be made at either FV or Cost of the investment property at the date of the transfer

A gain or loss arising from a change in the fair value of an investment property should be recognised in the revaluation surplus.

Interest expense accrued but included in taxable profit on a cash basis should be classified under deductible temporary differences