Intermediate Accounting 3 Theories

A complete set of financial statements includes all of the following components, except

Statement of Financial Position

Statement of Changes in Equity

Notes to Financial Statements

Environmental reports and value added statements (correct)

What is the objective of financial statements?

To provide financial position, financial performance and changes in financial position useful to a wide range of users (correct)

To prepare a statement of financial position and statement of comprehensive income

To present relevant, reliable, comparable, and understandable information

To prepare financial statements in accordance with all applicable standards

The primary responsibility for the preparation of the financial statements is reposed in

Management of the entity (correct)

Internal auditor

External auditor

Controller

The major financial statements include all of the following, except

Statement of Retained Earnings Signup and view all the answers

The major financial statements include all of the following except

Statement of Changes in Financial Position Signup and view all the answers

When an entity changed the reporting period longer or shorter than one year, an entity shall disclose all of the following except:

The fact that similar entities in the geographical area in which the entity operates have done so Signup and view all the answers

Which of the following is not a component of the financial statements?

Report of Board of Directors Signup and view all the answers

What is NOT included in a complete set of financial statements?

Statement of retained earnings Signup and view all the answers

What is the primary responsibility for the preparation of financial statements?

Accountants Signup and view all the answers

Which of the following is INCLUDED in a complete set of financial statements?

A statement of changes in equity Signup and view all the answers

Which of the following is INCLUDED within the financial statements?

A statement of retained earnings Signup and view all the answers

An entity shall clearly identify each financial statement and display all of the following, EXCEPT

Names of major shareholders of the entity Signup and view all the answers

Which statement is INCORRECT concerning fair presentation of financial statements?

An entity whose financial statements comply with PFRS shall not make an explicit and unreserved statement of such compliance in notes Signup and view all the answers

Financial statements MUST be prepared at least

Annually Signup and view all the answers

Which of the following cannot be considered fair presentation of financial statements?

To rectify inappropriate accounting policies either by the disclosure of the accounting policies used or by notes or by explanatory information Signup and view all the answers

The effects of transaction and other events on economic resources and claims are depicted in the periods in which those effects occur even if the resulting cash receipts and payments occur in a different period

Accrual Accounting Signup and view all the answers

Which statement indicates a going concern?

None of these would indicate going concern Signup and view all the answers

An entity is permitted to depart from a particular standard if all of the following conditions are satisfied, EXCEPT

When the Conceptual Framework for Financial Statement Reporting prohibits such a departure Signup and view all the answers

Technically, offsetting in financial statements is accomplished when:

Gain or loss from disposal of noncurrent asset is reported by deducting from the proceeds the carrying amount of the asset and the related disposal cost Signup and view all the answers

The presentation and classification of items in the financial statements shall be retained from one accounting period to the next

Consistency of Presentation Signup and view all the answers

A third statement of financial position as at the beginning of the earliest comparative period presented is required

Under all of these circumstances Signup and view all the answers

The overall objective of the financial reporting is to provide information

That is useful for decision making Signup and view all the answers

The primary focus of financial reporting has been on meeting the needs of which of the following groups?

Existing potential investors, lenders, and other creditors Signup and view all the answers

The primary objective of financial reporting is to provide useful information to

Capital providers Signup and view all the answers

Which group is NOT among the external users for whom financial statements are prepared?

All of these are external users of financial statements Signup and view all the answers

Which of the following is an INTERNAL user of financial information?

Board of Directors Signup and view all the answers

These users require information on risk and return provided by their investment

Investors Signup and view all the answers

These users are interested in information about the profitability and stability of the entity in order to assess the ability of entity to provide remuneration, retirement benefits, and employment opportunities

Employees Signup and view all the answers

These users are interested in information that enables them to assess whether their loans, the related interest thereon, and other amounts owing to them will be paid when due

Lenders and other creditors Signup and view all the answers

Darwin Company provided the following information at year end: Cash 1,500,000 Accounts Receivable 3,200,000 Inventory, including inventory expected in the ordinary course of operations to be sold beyond 12 months amounting to 700,000 1,000,000 Financial asset held for trading 300,000 Equity investment at FVOCI 800,000 Investment in Associate 2,500,000 Equipment held for sale 2,000,000 Deferred tax asset 150,000

What amount should be reported as total current assets at year end?

8,000,000 Signup and view all the answers

When there is much variability, the operating cycle is measured at

Twelve months Signup and view all the answers

The operating cycle of an entity

Is the time between the acquisition of materials entering into a process and their realization of cash Signup and view all the answers

The entity shall classify an asset as current under all of the following conditions, except

The asset is cash or cash equivalent that is restricted to settle a liability for more than twelve months after the reporting period Signup and view all the answers

An entity shall classify a liability as current when under all of the following conditions except

The entity has the right at the end of reporting period to defer settlement of the liability for at least twelve months after the reporting period Signup and view all the answers