50-100

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

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

• • A reduction in income for the accounting period

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

According to IAS 12 Income taxes, deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible permanent differences.”

• True
• False

In a period of rising purchase costs, FIFO usually gives a lower taxable income than AVCO and therefore, yields a tax advantage

• True
• False

A truck held for resale should be considered as a non-current asset in the statement of financial position.

• True
• False

Candy Plc received an invoice on 31 March 20X9 for maintenance work done on one of its machines. £21,000 of the cost is actually for a machine upgrade, which will improve the machine’s efficiency. However, the accountant charged the whole amount of the invoice to maintenance costs. This machine is depreciated at 20% per annum on a straight-line basis, with a proportional charge in the years of acquisition and disposal. Which amount will be understated in respect of Candy Plc’s profit for the year ended at 30 June 20X9?

• £16,800
• £21,000
• £19,950
• £19,600

According to IAS 36, an asset is impaired if:

• Its carrying amount equals the amount to be recovered through use (or sale) of the asset
• If it has been damaged
• Its carrying amount exceeds the amount to be recovered through use (or sale) of the asset
• The amount to be recovered through use (or sale) of the asset exceeds its carrying amount

Which of the following is NOT classified as inventory?

• Raw materials
• An office building
• Work in progress
• Finished goods

A contingent liability is not recognised in the statement of financial position

• True
• False

According to IAS 36, carrying amount is the amount at which an asset is recognised __________.

• After deducting any accumulated depreciation (amortization)
• After deducting accumulated impairment losses, if any
• Before deducting accumulated impairment losses, if any
• A and B
• A and C

A contract is, or contains, a lease if the contract conveys the right __________ an identified asset for a period of time in exchange for consideration.

• To use
• To control the use of
• To obtain economic benefits from
• To recognise depreciation changes of