Financial Reporting and IFRS Quiz

<p>Comparative information (D)</p> Signup and view all the answers

<p>German GAAP (HGB) (A)</p> Signup and view all the answers

<p>Last-In, First-Out (LIFO) (D)</p> Signup and view all the answers

<p>The cost of abnormal wastage of materials and labor (B)</p> Signup and view all the answers

<p>2013 Other comprehensive income £30,000, 2014 Negative other comprehensive income £30,000, Expense £40,000 (D)</p> Signup and view all the answers

<p>£35,200 (C)</p> Signup and view all the answers

<p>Fair Value Model (A)</p> Signup and view all the answers

<p>It enhances the ability to compare financial data across different time periods and entities. (B)</p> Signup and view all the answers

<p>To offer a set of fundamental principles that serve as the foundation for financial reporting. (A)</p> Signup and view all the answers

<p>Relevance and faithful representation. (D)</p> Signup and view all the answers

<p>Assets, liabilities, and equity. (B)</p> Signup and view all the answers

<p>A management commentary. (B)</p> Signup and view all the answers

<p>The statement of profit or loss and other comprehensive income. (A)</p> Signup and view all the answers

<p>A machine purchased for use in the production process over multiple accounting periods. (A)</p> Signup and view all the answers

<p>The amount at which the item is recognized in the financial statements after deducting accumulated depreciation and impairment losses. (C)</p> Signup and view all the answers

<p>Fair value through profit and loss (D)</p> Signup and view all the answers

<p>The business model test and the cash flow characteristics test (A)</p> Signup and view all the answers

<p>Goodwill is not separable. (B)</p> Signup and view all the answers

<p>Research expenditure should always be written off as an expense, but development expenditure may be capitalised, if it meets certain conditions. (C)</p> Signup and view all the answers

<p>Expenditure on advertising and promotion never gives rise to the acquisition of an intangible asset. (A)</p> Signup and view all the answers

<p>Comparing costs incurred to date with estimated total costs. (B)</p> Signup and view all the answers

<p>Expected profits are spread over the period of the contract, but expected losses are accounted in full when they become probable. (D)</p> Signup and view all the answers

<p>The present value of the minimum lease payments approximates the asset's fair value. (A)</p> Signup and view all the answers

<p>If legal title to the land transfers to the lessee by the end of the lease term. (A)</p> Signup and view all the answers

<p>The payments are recognized as an expense on the income statement. (C)</p> Signup and view all the answers

<p>The lower of the fair value of the leased asset and the present value of the minimum lease payments. (A)</p> Signup and view all the answers

<p>Only if legal title to the item has not been transferred to the lessee. (D)</p> Signup and view all the answers

<p>There is an active market for this type of intangible asset. (B)</p> Signup and view all the answers

<p>To match the amortization expense with the pattern in which the asset is consumed. (B)</p> Signup and view all the answers

<p>An asset representing the future economic benefits from assets acquired that are not individually identified and separately recognized. (A)</p> Signup and view all the answers

<p>At cost less any accumulated impairment losses. (B)</p> Signup and view all the answers

<p>The amount by which an asset's carrying amount is greater than its recoverable amount. (B)</p> Signup and view all the answers

<p>The asset becomes temporarily idle due to a production slowdown. (A)</p> Signup and view all the answers

<p>False (A)</p> Signup and view all the answers

Accounting systems that follow specific rules and guidelines strictly.

Accounting systems that focus on broader principles and concepts rather than strict rules.

Key attributes of financial information: relevance and faithful representation.

Components that represent financial position: assets, liabilities, and equity.

The primary statement showing a company's performance: statement of profit or loss and other comprehensive income.

Long-term assets used in business operations, excluding items for resale.

The value at which an asset is recognized in financial statements, usually after depreciation.

An accounting model where land's value is updated based on market conditions.

PPE is initially measured at cost.

In subsequent periods, PPE can be measured using cost or fair value models.

Inventories are assets held for sale or in production for sale.

The cost of abnormal wastage cannot be included in inventories.

FIFO assumes the items sold are those acquired most recently.

Include legislation, accounting standards, and stock exchange regulations.

Entities must generally adhere to all IFRS standards unless compliance would mislead.

Investors and lenders are the main users of general purpose financial reports.

Standards issued by the International Accounting Standards Board are called IFRS (International Financial Reporting Standards).

Fair presentation, accrual basis, and consistency are key principles, similar to timeliness and going concern.

According to IFRS 9, equity instruments are usually valued at fair value through profit and loss, or other comprehensive income.

If a debt instrument passes the tests, it must be measured at amortised cost.

Goodwill is not considered an intangible asset due to its lack of separability and uncertain future benefits.

Research expenditure should be expensed, while development costs may be capitalised if conditions are met.

Expenditure on advertising and promotion never leads to the acquisition of an intangible asset.

A method requiring annual revaluation, fair value assessment by a professional, and an active market.

The amortisation method should reflect the asset's usage pattern or spread costs evenly over its life.

Goodwill arises from assets acquired in a merger that are not individually identified.

Post-acquisition, goodwill is measured at cost less accumulated impairment losses.

An impairment loss is the amount when carrying value exceeds recoverable amount.

An unexpected decline in market value is an external sign of impairment.

A previously recognized impairment loss related to goodwill can be reversed if evidence supports it.

An active market must exist for an intangible asset to use the revaluation model.

The estimated selling price of inventory minus any costs to sell.

Measured by comparing incurred costs to estimated total costs in a construction contract.

Spread over the contract period, losses accounted for as soon as probable.

Leases transferring significant risks and rewards of ownership to the lessee.

Leases where the lessor retains risks and rewards, payments treated as expenses.

At lease commencement, measured at the lower of fair value or present value of lease payments.

Shows leased item as an asset while legal title is retained.

A contract that creates a financial asset for one party and a financial liability for another.