Highly Qualified CPA Professionals

A. Which one of the following is a key component of the definition of an asset?

1. An entity owns the asset
2. An entity controls the asset
3. An event will occur in the future
4. An outflow of future economic benefits is expected

B. When determining whether an item of financial information is material, an entity should consider

1. quantitative thresholds
2. the size of the item only
3. the nature of the item only
4. the size and nature of the item

C. Which of the following is NOT true of the Conceptual Framework?

1. Used by the standard setting bodies to develop accounting standards
2. Used by auditors to help form an opinion on compliance with IFRS
3. Used by preparers of financial reports when issues arise that are not directly covered by a standard
4. Sates the measurement basis for specific transactions or events

D. A Ltd holds a parcel of B Ltd redeemable 4% cumulative preference shares which are unlisted. The value of the shares was measured using the market price of C Ltd preference shares which are listed, redeemable, cumulative 3% preference shares and have a very similar maturity date to the B Ltd preference shares. According to IFRS 13 which level of inputs was used to measure the fair value of the preference shares?

1. Level 1
2. Level 2
3. Level 3
4. Level 4

E. Why are some accounting standards prescribing technical requirements that are inconsistent with the Conceptual Framework’s principles?

1. Accounting standards are occasionally required to depart from some principles and theory to reflect commercial reality and to overcome the limitation of the framework
2. Consistency is the technical requirements of the accounting standards is often judgemental
3. The Conceptual Framework provides principles and theory that are inconsistent, hence the inconsistency in the accounting standards
4. Accounting standards are developed based on social philosophies and scientific research

F. Which of the following statements concerning the International Accounting Standards Board is true?

1. It develops and ultimately issues International Financial Reporting Standards
2. It develops and issues International Accounting Standards
3. It develops and issues IFRIC Interpretations
4. It can dictate the preparation and presentation of financial statements of an entity