ques 200-300

M Co sets up his demolition business from scratch on 1 January 20X0. Which items should be represented as capital expenditure?

• • Writes off a damaged machine

• • Rents office premises

• Pays wages

• Buys a warehouse

Financial statements include a statement of financial position, a statement of comprehensive income and a statement of changes in equity. According to the Preface to international financial reporting standards, which TWO of the following are also included within the financial statements?

• • A statement of cash flows

• Accounting policies

• An auditor's report

• • A directors' report

  
  

As regards the relationship between IFRSs and the Framework for the preparation and presentation of financial statements, are the following statements true or false?

(1) The Framework is a reporting standard.

(2) In cases of conflict, the requirements of the Framework prevail over those of the relevant IFRS.

• False False

• False True

• True False

• True True

Which TWO of the following are listed in the IASB Framework as 'underlying assumptions' regarding financial statements?

• • The financial statements are reliable

• • Any changes of accounting policy are neutral

• The financial statements are prepared under the accrual basis

• •  accrual basis

  • The entity can be viewed as a going concern

Which TWO of the following statements concerning the provisions of the IASB Framework are correct?

• • The Framework provides that transactions must be accounted for in accordance with their legal form

• • Primary responsibility for the preparation and presentation of the financial statements of the entity rests with management

• • Financial statements must not exclude complex matters in order to achieve understandability

• • Where any conflict arises between the Framework and an IAS, the requirements of the Framework prevail

Câu 322

Which of the following statements about the IASB Framework are correct?

(1) The Framework deals with the qualitative characteristics of financial statements.

(2) The Framework normally prevails over International Accounting Standards where there is a conflict between the two.

(3) The Framework deals with the objectives of financial statements.

• • All of them

• Statement (1) and Statement (3) only

• • Statement (2) and Statement (3) only

• • Statement (1) and Statement (2) only

Which TWO of the following are roles of the International Accounting Standards Committee Foundation?

• • Issuing International Financial Reporting Standards

• Determining the basis of funding the standard-setting process

• • Reviewing broad strategic issues affecting accounting standards

• • Reviewing broad strategic issues affecting accounting standards

Which TWO of the following are parts of the 'due process' of the IASB in issuing a new International Financial Reporting Standard?

• Establishing an advisory committee to give advice

• • Reviewing compliance and enforcement procedures

• Issuing an interpretation as authoritative interim guidance

• • Developing and publishing a discussion document for public comment

Which TWO of the following should be taken into account when determining the cost of inventories per IAS2 Inventories?

• • Storage costs of part-finished goods

• • Trade discounts

• Recoverable purchase taxes

• Administrative costs

According to the IASB Framework, which TWO of the following characteristics are described as principal qualitative characteristics that make the information provided in financial statements useful to users?

• • Going concern

• Relevance

• Accrual

• • Understandability