In December, 2022, $595 return on goods to a supplier, had been incorrectly recorded in the sale returns as $295. How did the error affect the profit for the entity?

Whichof the following is not a "qualifying asset" under IAS23 - Borrowing Costs?

Intangible asset with infinite useful life must be amortized

This qualitative characteristic requires at least two item

Capitalised development expenditure must be amortized over a period not exceeding 5 years

Under IAS23Borrowings, which of the following cannot be qualifying asset? A Power generation facilities B Manufacturing plants C Intangible assets D Financial assets E Investment properties

This enhancing quality refers to a financial information that is classified, characterized and presented clearly, and concisely

The Conceptual Framework deals with the objectives of financial statements

Information becomes more useful if it can be compared with similar information about other entities and with similar information about the entity for another period or another date

According to IAS23 - Borrowing Costs, Investment Income generated from loans taken in order to finance a qualifying asset should be:

Accorsing to IAS28 Investments in Associates and Joint ventures, which one of the following statements best describes the term 'significant influence'?

Which of the following statements about users of accounting information is incorrect?

Under this accounting principle, a business is not expected to end its operations in the foreseeable future

Spring Cospent $5,000 on a patent for the new technique on 31 March 20X7. The company capitalized it as an intangible asset in the FSs.Spring Coexpected to use the patent for 5 years.According to IAS38, which one of the following journal entries is correct to record the amount of the parent amortized for the year ended 31 March 20X8?

Theusefulness of information is assessedin terms of its...

Recordingassets at their acquisition cost (entry value),rather than at their net selling price (exit value), is in line with the principle of

Whena constructing office is almost complete, the only remaining work is to install furniture, should the entity continuecapitalising the borrowing costs

If an entity wishes to change from a cost model to fair value under IAS40 - Investment Property, when may it do so?

Under this concept, the life of the business is divided into series of reporting periods

Capitalisation is suspended if the delays in the development of an asset are

Which of the following is not a condition to commence capitalisation of borrowing costs?

Acompany had a provision of $10,000 in its FSsfor the year ended 31 March 2021 in respect of a legal claim. In July2022 the claim was settled at a cost of $13,000.What is the expense in respect of the legal claim included in the company's statement of profit or loss

Acompany has CU20 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 Dec 20X7 and incurred CU1.4 million of costs. From that date the project would be successful and yield a profit well in excess of costs. Theproject was still in development at 30 Sep 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 30Sep 20X8 in respect of research and development costs?

Aparent leases an office building to a subsidiary. In which FSswill the property appear as investment property?

TheOakesCompany has a loan due for repayment in six months time, but Oakeshas the option to refinance for repayment two years later. Oakes plans to refinance this loan. In which section of its statement of financial position should this loan be presented, according to IAS1 Presentation of FSs?

Acompany issued 50,000 equity shares of $1 each at a premium of $0.5 per share. The cash received was correctly recorded but the full amount was credited to the share capital account. Which of the following journals corrects this error?

Abusiness buys a machine on 1 Jan2019 for $10,000 and depreciates it at 10%per annum straight line. At the end of 2020 the machine's remaining useful life is reassessed at six years remaining and it is now believed that the machine has a residual value of $500.What is the depreciation charge for the thirds year of the machine's use?

Should the following cost be included in the consideration transferred in a business combination, according to IFRS3 Business combinations? Fees paid to accountants to affect the combination

In a normal CGUimpairment - what gets impaired first?

PacquiresSfor the following amounts: 1) Cash400; 2)Future payment of 1,000 in 2 years time (discount rate 10%);3)Apossible future payment of 1,000 if S’sprofits increase by 10%each year (FVof this is 400). How much is the investment in S(the consideration figure in the goodwill calculation)? 1

Do you provide for an obligated future cost?

Wehave decided to build a new cowshed for our students. We've bought the land but not got any planning permission. Is this an InvestmentProperty?

You buy an asset at the start of the year with the following costs: 1)PurchasePrice 1,000 2) Legal fees 500 3)Admin costs in negotiating the fee 100 4) Future dismantling cost of 200 in 3 years time Discount rate is 10%How much is the cost of the assetat the start of the year?

Is a footballer's contract an intangible asset?

Whichis the 4th step in revenue recognition process?

Adelivery Vanof ABCplc has damagedbadly due to an accident in highway. Thecost of repair will be $700.What type of expenditure is it?

How shall an entity recognise borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset?

Do you provide for next years losses under a contract?

s this an Investment Property? Achic, sleek, cutting edge technology building used for training accountants but no longer required as students just made the place a bit cluttered and smelly - so we have decided to sell it?

Whena constructing office is almost complete; the only remaining work is to install furniture, should the entity continue capitalising the borrowing costs?

. Whichof the following would NOTbe classified as an associate? An entity where you...

If goodwill is calculated using FVmethod where is the impairment shown in your workings?

If information is complex should it be included in the accounts?

With regard to the definition of revenue given by IFRS15,which of the following statements is true?

An underprovision of tax in the previous year is shown in this years trial balance as

An overprovision of tax in the previous year is shown in this years trial balance as

Acontract performed but not paid would be

Which would lead to more comparable financial statements between companies..?

Which would lead to more consistent accounting standards?

Whendoes an impairment occur?

If the agreed date of payment by a customer is later than the date on which goods or services are transferred to that customer, part of the consideration should always be treated as finance income (not revenue).

Themaximum maturity of a cash equivalent is:

Control means rights to the variability of returns and also..

Thestatement of financial position of Pinto at 31 March 2017 showed property, plant and equipment with a carrying amount of $1,860,000. At 31 March 2018 it had increased to $2,880,000. During the year to 31 March 2018 plant with a carrying amount of $240,000 was sold at a loss of $90,000, depreciation of $280,000 was charged and $100,000 was added to the revaluation surplus in respect of property, plant and equipment. What amount should appear under ‘investing activities’ in the statement of cash flows of Pinto for the year ended 31 March 2018 as cash paid to acquire property, plant and equipment?

Acompany has a legal obligation to remove an asset after it has finished with it in 8 years time. How is this dealt with in the accounts

Asub has 100 net assets book value and a contingent liability with no book value but a 10 fair value At acquisition what is the value of the sub for the goodwill calculation?

Asub has 100 net assets book value and a contingent liability with no book value but a 10 fair value At acquisition what is the value of the sub for the goodwill calculation?

Whichis an indicator of impairment

Your company owns 40%of another company - is that company your subsidiary?

Thepurpose of the Conceptual Framework is to assist in determining the treatment of items NOTcovered by IFRS.Is this statement true or false?

How do you deal with contingent consideration? Usethe FV B UseFVonly if probable

Acompany bought an asset for 2,000 (10 year useful life) After 5 years it is impaired to 800.What is the double entry? Dr Asset/CrP/L 200 B Dr Asset/CrP/L 800 Dr P/L / CrAsset 200 D Dr P/L / CrAsset 800

Contract assets and receivables shall be accounted for in accordancewith _____

Whichof the following is NOTan intangible asset?

Acash flow statement provides information that enables users to evaluate the changes in:

Which of the following statements about research and development expenditure are correct according to IAS38 Intangible Assets? (Two options)

John& Cosold an item of used machinery at $5000.Whatwill be the effect on financial statements?

s the screen of the device you're using right now - a cash CGU?

What are the limitations to Faithful Representation? (two options)

Whatis the minimum requirement for the number of parts of an asset that should be identified?

If an IFRSdisagreeswith the conceptual framework - then what should be followed?

A30%Associate - carrying value in the SFP= 1,000.Therecoverable amount of the associateis 2,000. Has there been an impairment?

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:

Foran investment to qualify asa cash equivalent, it must be:

Thecarrying 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. Thedepreciation 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?

Revenueis recognised as control is passed.Whichof the following BESTDESCRIBES 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?

. In which of the following situations is the net relisable value of an item of inventory likely to be lower than its cost? A. The production cost of the item has been falling B. The selling price of the item has been rising C. The item is becoming obsolete D. Demand for the item is increasing

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:

8. 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?

12.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? A. Purchase costs and conversion costs B. Purchase costs, net of trade volume rebates, conversion costs, other costs to bring inventory to its present condition and location and selling costs C. Purchase costs, net of trade volume rebates conversion costs and other costs to bring inventory to its present condition and location D. Purchase costs, conversion costs, other costs to bring inventory to its present condition and location and storage costs

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)

4. 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?

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.

.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?

3. 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

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? A.Revenue to date divided by total contract revenue B. Advances received to date as a percentage of the total amount receivable C. Surveys of work performed D. Machine hours worked to date

11. 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? A.The customer paid in advance and the timing of delivery is at the customer’s discretion B. The credit terms are significantly longer than are normally offered to customers for the same goods C. The consideration, or an element of it, is variable because it is a sales-based royalty D. The customer has the option to delay payment by a year and the price if they choose this option is noticeably different from the price for immediate cash payment

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: A. Capitalized to cost of property, plant and equipment B. Deducted from borrowing costs C. Added to borrowing costs D. Shown as Investment Income in the Income Statement

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

15. 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)? A.An unexpected fall in the market value of one or more assets B. Adverse changes in the economic performance of one or more assets C. A significant change in the technological environment in which an asset is employed making its software effectively obsolete D. The carrying amount of an entity's net assets being below the entity's market capitalization

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? A

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:

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?

26. 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.

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

What type of goodwill is shown in the SFP as an asset?

Expense accrued and had been included in taxable profit resulted in deffered tax liability.

Where accumulated depreciation on an asset is less than accumulated tax depreciation, deferred tax asset incurs.

Which of the following is within the scope of IAS 37 Provisions, contingent liabilities and contingent assets?

33. AAC Company buys the recording rights to a famous singer's original song for $10,000. According to the agreement, the singer allows the company to record her songs for 5 years. During the first 6 months of the contract, the singer was sick and could not record. The company had to pay $1,500 for studio costs even if the singer could not record and $1,000 for advertising costs for the singer. What is the initial cost of the above intangible asset?

Which of the following should be a provision be recognized under IAS 37 Provisions, contingent liabilities and contingent assets?

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

Where accumulated depreciation on an asset is less than accumulated tax depreciation, the amount should be classified under taxable temporary differences.

Which of the following should be a provision under IAS 37 Provisions, contingent liabilities and contingent assets?

. Which of the following is NOT within the scope of IAS 37 Provisions, contingent liabilities and contingent assets?