18 Questions
Which accounting principle requires financial statements to be prepared assuming the entity will continue in operation for the foreseeable future?
Going Concern Principle
What is the primary reason for disclosing the fact that financial statements are not prepared on a going concern basis?
To inform stakeholders about uncertainties regarding the entity's future operations
How are transactions and events recognized in financial statements under the Accrual Basis principle?
When they occur, regardless of cash flow timing
Which factor determines whether an item is considered material in financial reporting?
Size of the item relative to others
What does 'Offsetting' refer to in financial reporting?
Presenting a net figure by combining related financial amounts
How frequently should an entity present a complete set of financial statements according to general reporting standards?
At least annually
What is the main objective of fair presentation in financial statements?
To faithfully represent the effects of transactions
Which of the following is NOT a requirement for fair presentation?
Providing irrelevant information in financial statements
When is an entity allowed to depart from a standard according to the text?
When departing from the standard enhances fair presentation
What should an entity disclose if it departs from a standard?
That management has concluded the financial statements are fairly presented
Which of the following is NOT a responsibility of an entity regarding financial statements?
Hiding important financial data from users
What is one of the key aspects an entity must ensure for fair presentation?
Selecting and applying accounting policies according to PFRS
What does an entity need to disclose when changing its reporting period?
The reasons for using a shorter or longer period
When is a Third Statement of Financial Position required for an entity?
When an entity makes retrospective restatement of items in the financial statements
What is the purpose of presenting comparative figures in financial statements?
To provide information on changes over time
What does the principle of consistency require in accounting?
Applying accounting methods and practices on a uniform basis from period to period
When should an entity present three statements of financial position?
At the end of the current period, previous period, and beginning of the earliest comparative period
What should an entity do if a change will result in information that is faithfully represented and more relevant to users?
Make such change even if it alters the uniform application of accounting methods and practices
Test your knowledge of financial reporting requirements related to changes in reporting periods and the presentation of comparative information in financial statements. Includes information on disclosure requirements and the presentation of comparative figures.
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