Financial Reporting Quiz (Business Reporting):
Ques. Error includes
(a) Mathematical mistakes
(b) Mistakes in applying accounting policies
(c) Oversights of misinterpretation of facts
(d) All of these
Ques. __ is the process of determining the monetary amounts at which the elements of financial statements are recognized and carried in the financial statements.
(a) Recognition
(b) Addition
(c) Measurement
(d) Carrying
Ques. In selecting an accounting policy, we should review ____
(a) The standard only
(b) The interpretation only
(c) Framework only
(d) All of these
Ques. Borrowing cost do not include
(a) Interest on debentures
(b) Incremental administrative fees for raising loans
(c) Dividend declared to equity shareholders
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Ques. An item of property , plant and equipment that qualifies for recognition as an asset shall be measured at
(a) Cost
(b) Market price
(c) Replacement value
(d) Opportunity cost
Ques. An entity shall cease capitalizing borrowing cost when
(a) Expenditure on the asset is being incurred
(b) Borrowing cost are being incurred
(c) The asset is materially ready for its intended use
Ques. __ is the residual interest in the asset of an entity after deducting all liabilities
(a) Capital
(b) Net Asset
(c) Depreciation
(d) Equity
Ques. A __ is the liability of uncertain timing and uncertain amount.
(a) Provision
(b) Reserve
(c) Current liability
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Ques. ………..are employee benefits that are payable after the completion of employment
(a) Retirement benefits
(b) Post employee benefits
(c) Share based payments
Ques. Finance leases are accounted for in a similar manner to:
(a) Cash transaction
(b) Credit transaction
(c) Lease back transaction
(d) Long forgiveness
Ques. Property, Plant and Equipment are defined as:
(a) Tangible assets held for sale in the ordinary course of business
(b) Tangible assets held to earn rental or for capital appreciation or both
(c) Tangible assets used in the process of production or supply of goods or services or for rental to others
Ques. Which of the following is not an example of a potential ordinary share?
(a) Standard preference share
(b) Convertible preference share
(c) Stock warrant
(d) Convertible debt
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Ques. Two entities are not necessarily related parties if:
(a) One entity has significant influence over the other.
(b) One entity has control over the other.
(c) The entities share joint control over a third entity
(d) One entity has joint control over the other.
Ques. Adjustment of the carrying amount of an asset or liability or the consumption of an asset is defined as
(a) A change in the accounting estimate
(b) Accounting policies
(c) Misstatements
(d) Error
Ques. In a land lease, if title does not pass at the end of a lease to the lessee, it is normally treated as ‘Finance lease’.
(a) Statement is true
(b) Statement is false
(c) Statement is not relevant
Ques. The cost of intangible asset at initial recognition is measured at its fair value when
(a) It is internally generated
(b) It is acquired as a part of business combination
(c) It is acquired by way of a Government grant
(d) Both (b) and (c)
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Ques. Cash payments to acquire the entity’s own shares (ie, treasury shares) are:
(a) Cash outflows from operating activities
(b) Cash outflows from investing activities
(c) Cash outflows from financing activities
Ques. When after the end of the reporting period an event occurs that is indicative of conditions that arose after the end of the reporting period:
(a) The entity discloses the nature and effect of the event in the financial statements.
(b) The entity adjusts the related amounts recognised in the financial statements.
(c) Both of the above statements are true.
Ques. Consumable stores are
(a) Inventories
(b) Property, Plant and Equipment
(c) Investment Property
(d) Intangible Asset
Ques. A property developer must classify properties that it hold for sale in the ordinary course of business as
(a) Inventories
(b) Property, Plant and Equipment
(c) Financial Assets
(d) Investment property
Ques. Adjusting events are those that:
(a) Provide evidence of conditions that existed at the end of the reporting period
(b) Are indicative of conditions that arose after the end of the reporting period
(c) Are favourable or unfavourable, and indicative of conditions that arose after the end of the reporting period
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Ques. Theoretical ex-rights price (‘TERP’) is calculated when there is a:
(a) Bonus issue
(b) Right issue
(c) Stock split
Ques. …..are resources controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.
(a) Assets
(b) Income
(c) Liability
(d) Current assets
Ques. A biological asset used in agricultural activity whose fair value is readily determinable without undue cost or effort is accounted for using:
(a) The fair value model.
(b) The cost model or the fair value model (an accounting policy choice).
(c) The cost model.
Ques. Original cost at which asset or liability is acquired is known as ..
(a) Carrying amount
(d) Replacement cost
(c) Historical cost
(d) Purchase price
Ques. What is conceptual framework for accounting?
(a) A set of rules and regulations
(b) A set of financial statements
(c) Components of financial statements
(d) A set of principles underpinning financial reporting
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Ques. Which of the following is not a minimum item on the face of the statement of comprehensive income?
(a) Revenue
(b) Finance cost
(c) Deferred tax
(d) Profit or Loss
Ques. Which of the following is not a requirement for current liabilities?
(a) Expected to be settled in entity’s operating cycle
(b) Held primarily for trading
(c) Expected to be settled within 12 months from the reporting period
(d) Entity holds an unconditional right to defer settlement for over 12 months after reporting period
Ques. Useful life of an intangible asset with finite useful life is reviewed at …
(a) Every year
(b) At the end of the useful life
(c) In case any changes in accounting estimated
Ques. Liquidation of a major customer after the end of the period end is….
(a) Adjusting events
(b) Non adjusting event
(c) Error
(d) Changes in estimate
Ques. Activities that result in changes in the size and composition of equity capital and borrowing of an entity are called
(a) Operating activity
(b) Investment activity
(c) Income producing activity
(d) Financing activity
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Ques. Principal revenue producing activity of an entity is called…
(a) Operating activity
(b) Financing Activity
(c) Investment activity
Ques. A…………. is an operating segment or results from the aggregation of two or more operating segments that meets quantitative thresholds.
(a) Joint Venture
(b) Associates
(c) Reportable segment
Ques. ……….is the amount of income taxes payable on the taxable profit for a period, in accordance with rules established by the tax authorities
(a) Tax expense
(b) Tax base
(c) Deferred tax
(d) Current tax
Ques. Consideration which varies upon certain future events which may or may not occur is called….
(a) Variable consideration
(b) Future consideration
(c) Agreed price
Ques. An intangible asset is identified when
(a) It is separable
(b) It arises from contractual or other legal rights, regardless whether those rights are transferable or separable from the entity
(c) Either (a) or (b)
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Ques. A statement showing information on increase or decrease in net asset or wealth of an entity is called…
(a) Statement of financial position
(b) Statement of comprehensive income
(c) Cash flow statement
(d) Statement of Changes in equity
Ques. Operating lease is :
(a) Short term agreement
(b) Long term agreement
(c) Medium term agreement
Ques. An entity assesses inventories for impairment
(a) Only when there are external indicators that, an impairment has occurred
(b) At each reporting date
(c) Only when there are internal indicators that an impairment has occurred
Ques. Profit is :
(a) Total revenue – Implicit cost
(b) Total revenue – Explicit
(c) Total revenue – Explicit and Implicit cost
(d) None of the above
