Practice Questions For Conceptual Framework
Practice Questions For Conceptual Framework
Practice Questions For Conceptual Framework
6. Which of the following does not appear in the statement of retained earnings?
a. Net loss
b. Prior period error
c. Preference share dividend
d. Other comprehensive income
7. Which of the following does not appear in the statement of retained earnings?
a. Net income
b. Prior period adjustment
c. Discontinued operation
d. Dividend declared
10. Which of the following information is not specifically a required disclosure of PAS 1?
a. Name of the reporting entity or other means of identification, and any change in that
information from the previous year.
b. Names of major shareholders of the entity.
c. Level of rounding used in presenting the financial statements.
d. Whether the financial statements cover the individual entity or a group of entities.
14. Which of the following must be included in the statement of financial position?
a. Contingent asset
b. Property, plant and equipment analyzed by class
c. Share capital and reserves analyzed by class
d. Deferred tax
15. Which of the following must be included on the face of the statement of financial position?
a. Investment property
b. Number of shares authorized
c. Contingent liability
d. Shares in an entity owned by that entity
16. The components financial statements include all of the following, except
a. Statement of financial position c. Statement of cash flows
b. Statement of comprehensive income d. Statement of retained earnings
17. A third statement of financial position at the beginning of the earliest comparative period is
required
a. When an entity applies an accounting policy retrospectively.
b. When an entity makes a restrospective restatement of items in the financial statements.
c. When an entity reclassifies items in the financial statements.
d. In all of the above cases.
18. The statement of financial position provides a basis for all of the following, except
a. Computing rate of return.
b. Evaluating the capital structure of the entity.
c. Determining the increase in cash due to operations.
d. Assessing the liquidity and financial flexibility of the entity.
19. Immaterial amounts of similar nature and function shall be grouped or condensed as one
line item in the financial statements.
a. Aggregation c. Offsetting
b. Accounting policy d. Comparability
21. The effects of transaction and other events are recognized when they occur, recorded in the
accounting records and reported in the financial statements of the periods to which they relate.
a. Going concern c. Time period
b. Entity d. Accrual basis
22. Which of the following reports is not a component of the financial statements?
a. Statement of financial position c. Director’s reports
b. Statement of changes in equity d. Notes to the financial statements
30. Accrued revenue would normally appear in the balance sheet under
a. Noncurrent assets
b. Current liabilities
c. Noncurrent liabilities
d. Current assets
32. Which statement is correct concerning presentation of information on the face of the
statement of financial position?
I. Additional line items, headings and subtotals shall be presented on the face of the statement
of financial position when such presentation is relevant to an understanding of the entity’s financial
position.
II. The standard does not prescribe the order or format in which items are to be presented.
a. I only c. Both I and II
b. II only d. Neither I nor II
34. When an entity’s normal operating cycle is not clearly identifiable, it is assumed to be
a. Twelve months c. Three months
b. Six months d. Twenty-four months
35. A liability shall be classified as current when it satisfies any of the following criteria
(choose the incorrect one)
a. It is expected to be settled in the entity’s normal operating cycle.
b. It is held primarily for the purpose of being traded.
c. It is due to be settled within twelve months after the statement of financial position date.
d. It is expected to be paid for in cash
36. An asset shall be classified as current when it satisfies any of the following criteria, except
a. The entity expects to realize or intends to sell or consume the asset within the operating
cycle.
b. The entity expects to realize the asset within twelve months from the statement of financial
position date.
c. It is a restricted cash or cash equivalent asset
d. It is held primarily for the purpose of trading
37. Which obligations are classified as current liabilities even if they are due to be settled after
more than twelve months from the statement of financial position date?
a. Trade payables and accruals from employee and other operating cost.
b. Current portion of noncurrent financial liabilities.
c. Bank overdrafts
d. Dividend payable
38. Investment securities held for the purpose of retiring bonds payable should be classified as
a. Current assets c. Deferred bond liability
b. Noncurrent assets d. Intangible assets
39. Which one of the following is not required to be presented as minimum information on the
face of the statement of financial position?
a. Investment property c. Biological assets
b. Investments accounted under the equity method d. Contingent liability